With Marissa Mayer taking the helm at Yahoo today, I’m trying to think through her options for turning around the big, purple ship. I have some thoughts that I’ll post tomorrow.
But as I do, I’m looking back at some past (unsolicited) advice I’ve given Yahoo.
This column comes from March 2009, two months after Carol Bartz took the helm in what now feels like a very different world. Facebook was still smaller, but growing like crazy. Google hadn’t dipped into social (much).
So, here’s what I said then. And frankly, I still think it wasn’t bad advice…for three years ago. Now, of course, the social ship has all but sailed on them…
THREE WAYS TO SAVE YAHOO; THE COMPETITION ISN’T GOOGLE; IT’S FACEBOOK
Yahoo CEO Carol Bartz has had two months to settle into her purple-and-gold throne in Sunnyvale. She’s sent some rah-rah notes to buck up the spirits of the Yahoos. And she’s made some quick moves to restructure her leadership team.
Now, all she needs is a strategy to save Yahoo.
Fortunately, I have just what she needs: some friendly, unsolicited advice from your local business columnist.
Despite all you’ve read about Yahoo this past year, the company has some tremendous strengths and opportunities.
I was already a fan of the strategy that much-maligned founder and former Chief Executive Jerry Yang was pursuing. He wanted to turn Yahoo into an open, more social platform that would allow anyone to write applications to add new functions and services. This is a long-term strategy, but one that reflects the way the Web is evolving. Bartz should build on it.
Here are three steps for doing that:
1. Recognize what Yahoo is and is not. I have never really considered Yahoo to be a search company. But somehow, it let itself be defined as one, and so looked increasingly sluggish compared to Google.
Instead, I always saw Yahoo as a place where I share stuff like photos, find and read news, and communicate through things like Yahoo mail and groups, all places where it still trumps Google.
For me, Yahoo was the Web 1.0 version of Facebook. Mark Zuckerberg’s baby is Yahoo’s real competition.
Right now, Facebook has all the momentum. But according to comScore, Yahoo still had almost three times as many unique visitors in January as Facebook.
Meanwhile, Google has failed to make headway into the social Web. While Google has more traffic than Yahoo or Facebook, users spend far less time there, a dynamicGoogle is trying to change.
Yahoo should return to its roots, and focus on beating Facebook. That leads to my next recommendation:
2. Sell Yahoo search to Microsoft. CEO Steve Ballmer again threw the door wide open last week. During an interview with a BusinessWeek editor, he said he’d chatted with Bartz by phone about search and “sees a real opportunity for a deal.”
Ms. Bartz: Run, don’t walk, into his arms.
Such a deal would not only have the short-term benefit of providing some revenue, it also would help clarify what Yahoo is and is not. Rather than constantly having to explain why it’s not as good at search as Google, Yahoo can define itself by its strengths and build on them.
Which brings me to the final piece:
3. Buy Twitter and FriendFeed. At first glance, such a suggestion might just cause users of both services to go, well, berserk. But hear me out.
As I noted above, Yahoo’s real purpose is to be a place to store, share and discover things. But many of these features and services are sprawled across its sites.Yahoo made some savvy acquisitions of Web 2.0 companies such as the photo-sharing site Flickr, the bookmarking service Delicious.com, and the calendar service Upcoming. But Yahoo kept each one relatively separate, and when you use any of them, you’d hardly know they were part of Yahoo.
When I spoke to some Yahoo engineers this past fall, they said they weren’t trying to create a central destination that ties all of these pieces together, but rather were building social functions into each piece of Yahoo’s platform.
This is a mistake. Yahoo needs to better organize the vast, sprawling set of services it has, as well as all the things we do across the Web. Facebook gets this, and its success is due as much as anything to the elegance of its news feed (though its recent redesign has many users grumbling).
Yahoo lacks two pieces to compete with Facebook: a news feed and a status update.
FriendFeed, based in Mountain View, was started by four former Google employees. It pulls together all your activity across various social Web services into a single feed. I would make this the centerpiece of the new Yahoo home page, along with the traditional news and e-mail services.
San Francisco-based Twitter would give Yahoo that status update function. Facebook believes this is so important, it just redesigned its feed to look more like Twitter’s.
Because both FriendFeed and Twitter operate on open platforms, they would fit neatly with Yahoo’s evolving open philosophy. Yahoo would have some work to do to sell the value of these deals to the core users of both startups.
Yahoo has the cash to make both companies offers they can’t refuse. Get these pieces in place, and the playing field will be wide open here.
It’s Yahoo vs. Facebook. Game on.