Wired online published a brutal description of bad decisions and misguided management at Yahoo over the past six years. Paralleled against Googleâ€™s unprecedented growth, the article paints a picture of corporate indecision and eventual stagnation showing Yahoo as a company in decline. Where Google was able to move quickly based on amazing IT talent, Yahoo deliberated over innovative ideas, debating who had what responsibilities and where they would have them. The five page piece closes on an ominous note stating, â€œAt Yahoo, the marketers rule, and at Google the engineers rule. And for that, Yahoo is finally paying the price.â€
In his piece, â€œHow Yahoo Blew Itâ€, Wired Magazine contributing editor Frank Vogelstein appears to assign blame in a number of directions but he focuses much of it directly at Yahoo CEO Terry Semel.
Under Semelâ€™s leadership, Yahoo has missed a number of extraordinary opportunities and has developed turf-driven tensions in the upper management of Yahooâ€™s various divisions. With a corporate culture of bureaucratic committees, Yahoo was unable to keep up with Google on the search front. Trying to merge Overtureâ€™s PPC results into Inktomiâ€™s organic search results proved more difficult than expected, likely because Overture and Yahoo executives were often working at cross purposes or in competition with each other. Yahoo has also mismanaged other initiatives such as the Hollywood based Yahoo Entertainment division established by Lloyd Braun.
Yahoo is resigned to playing second fiddle to Google in the search space though they would never say so in public. That doesnâ€™t mean they are not going to try to compete or to catch up but every Yahoo employee Iâ€™ve spoken with has privately admitted Google has them beaten on virtually every front.
At the same time, almost every Yahoo employee Iâ€™ve spoken with maintains a positive outlook on Yahooâ€™s business and its future prospects. They have good reason to. Yahoo has had a number of successes over the past six years that, even when measured against the greatness of Google have to be thought of as impressive.
To balance things out, Emre Sokullu at Read/WriteWeb.com noted today that Yahoo has made some brilliant Web2.0 acquisitions in the last two years. Since 2005, Yahoo has picked up;
- - A strong blog search engine, blo.gs
- The leader in photo search and sharing, Flickr
- A local and global events search engine, Upcoming.org
- Social bookmarking tool del.icio.us
- A desktop utility tool that allows users to create application widgets (formerly known as Konfabulator)
- An online video editing, sharing and mashing suite called Jumpcut
- And, an online Karaoke community known as Bix (see link for a great rendition of Mack the Knife)
More recently, Yahoo scored big with their purchase of social network tool MyBlogLogs. (for more info, check out this SearchEngineJournal piece on MyBlogLogs)
There is a significant shake-up happening at Yahoo right now with some staff leaving or moving between departments as the recent management and corporate shuffle takes effect. Though it is inarguably far behind Google in both the traditional search race and the contextual ad-delivery space, Yahoo is well positioned to reap the benefits of its acquisitions in 2007. Well positioned that is, if they can find a way to make their cool software and applications make money.