What's Keeping Yahoo From an Effective Turnaround?

First, I’ll talk a bit about the search marketing battleground because it's perceived that that is where Yahoo! (YHOO) is getting its head handed to them by Google (GOOG).

I believe Yahoo’s Panama advertising platform has made good but slow progress since its launch a couple of months ago. While I was tempted to jump on the Yahoo wagon when Panama was finally launched (with a sigh of relief), the disappointment and negative comments from both advertisers and publishers on the DigitalPoint forums caused me to be very skeptical of Panama at the time. Advertisers reported having a hard time even getting their ads onto the new platform and even when they did, their ads would appear on the wrong type of sites, causing them to waste precious ad budgets. Advertisers are now excited about the improvements and seeing better click-through-rates (thus more effective ads for their money) than Google’s AdWords. However, there are still complaints about drastically mis-targeted ads, such as ads meant for the U.S. being seen and clicked from other countries. The Panama staff still seems to be too small, leading to bad customer service, lost accounts, and inefficiencies due to fragmented departments.

I am not writing off Yahoo as Google’s competitor in search advertising. Advertisers will go to whoever can help them have a successful ad campaign, and will likely use both Yahoo and Google to reach more people. Yahoo’s problem seems to be just bad execution on the Panama plan, which makes you wonder how serious they are about their business because Panama’s supposed to be the flagship revenue driver. Basic problems like platform glitches and customer service, which should be a priority of any business, shouldn’t take months to address. I would expect Terry Semel to be better at such management and business principles, but we’ll see how Jerry Yang does. Yahoo still has the more visitors than Google, despite Google’s search dominance, so Yahoo’s Panama could see a significant turnaround by starting with the simple things.

Yahoo! - Now What Do We Do?

As for Yahoo the company, this story is sounding like Ford’s (F) story before they brought in Alan Mulally. The first thing you notice on the Yahoo frontpage is it’s a hodgepodge of random sites under the Yahoo name, making Yahoo look more like a Proctor & Gamble (PG) than a leading tech company. Whoever is running Yahoo should follow Alan Mulally’s game plan at Ford to streamline operations and get some company focus. Yahoo is already a “conglomerate” of random sites that I believe have no real value to the company. Yahoo Autos, for example, is indistinguishable to the consumer as far as usefulness and customer loyalty goes. Also, there is no need for Yahoo Personals now that everyone connects on Facebook and Myspace. They don’t necessarily have to sell or remove these sites, but they should either fix them up so each site has an independent identity capable of taking business from competitors. Instead of having everything under the Yahoo name, which causes all the individual Yahoo sites to be cluttered together, the sites might perform better if they were given their own brand identity the same way Lexus is the upscale Toyota (TM) but isn’t usually associated with Toyota.

The other problem with Yahoo seems to be no teamwork or corporate cohesiveness. As shown by the various Yahoo sites operating independently, there are no synergies that a corporation of businesses should have. If the whole isn’t greater than the parts, why have all these sites under the Yahoo name in the first place? Actually, I believe Yahoo is sitting on a ton of web-technology assets and does not need to buy a Facebook or spend more on R&D. As someone who’s played with web design for over 10 years (but never very good at it), I feel Yahoo has developed tons of useful web tools to help web designers and the web evolve. For instance, Yahoo has great API’s (Application Programming Interface) to allow cool user interfaces like drag-and-drop photos on Yahoo’s flickr photo service. Just as Alan Mullaly got different Ford brands to start using the same parts and suppliers for efficiency and cost reduction, so too should Yahoo use the technology Yahoo developed throughout their sites. Under the right manager who understands what such technology means, Yahoo can be the greatest web company. Parts of the web could be built upon Yahoo technology. Adobe (ADBE) has done it for video with its Flash technology, so it’s not impossible.

However, Yahoo’s R&D is operating like some start-up tech company by cranking out these great web building blocks for others to benefit. Meanwhile, Google rolls out useful products like Google Documents to perform Microsoft Office tasks online. For this reason, I don’t know if Jerry Yang’s the man to turn around Yahoo. Yang was a start-up man himself and what Yahoo looks like right now is a handful of start-ups that need to come together and grow up. For Yahoo to change, Yahoo’s culture needs to evolve from a group of computer fanatics who just want to code stuff and to a business where professionals code products for a purpose.

Comments

[Swampthing]

What is keeping Yahoo from a turn around???? Modifying their mobile platform to perform one click to content. If they want to beat the MSFT or Google's of search / navigation, they need to implement another navigation engine that does just that.

Yahoo should get together with qode.

qode performs one click to content for the brands with a web enabled device.

Just think of all the revenue from the brands if they were able to make their product one click away.

What if the mobile user / web user were able to say a keyword in your browser and you held the technology license to perform just that???????

What is it worth??????

How bad does Yahoo really want to be king???????