Posts tagged search advertising

Jerry Yang has gone – the pioneer of Yahoo, a guy that can be credited with bringing the internet to masses. Well, maybe that is a bit extreme, but he did change the way we communicate on the internet. In my eyes, he was first.

From 1995 until the early 2000s Yahoo reigned the internet search landscape and was the first online navigational guide to the web. Now Google may argue with that, as it has been around since late 1998, but Google as a start-up didn’t attract as much investment capital as Yahoo and took a little longer to get operations off the ground…and online.

In the early days, Silicon Valley investors pitched in US$2 million for Yahoo. Google attracted just US$100,000, initially. Six months later it got an extra US$25 million – making the Yahoo the underdog.

In most movies, the underdog wins. It is who we back, not just out of sympathy, but usually because we see so much untapped potential.

That is how we will always see Yahoo – an underdog with a lot of potential.

It has been a struggle for Yahoo – there is no denying that. Especially over the past few years which has seen the great Carol Bartz – whom originally replaced Jerry as CEO of Yahoo – pushed in and out as quick as you can say, well, Yahoo; share prices dips, shareholders causing a stir and profits plunging as the economy exercises its relentless payback.

The “global internet communications, commerce and media company that offers a comprehensive branded network of services to more than 345 million individuals each month worldwide” somehow lost its groove soon after the turn of the millennium.

Perhaps they should have opted for Microsoft’s offer in 2008 of US$44 billion. But no one saw the dotcom crash coming, or subsequent enduring financial crisis – even September 11 had an impact.

Yahoo’s current market value stands at about US$20 billion. Its localised partnerships in a variety of markets have seen advertising revenues jump and services boosted but it simply isn’t enough to mark a return to its heyday.

In a letter to Yahoo’s chairman of the board, Yang said he was leaving Yahoo to pursue “other interests outside of Yahoo”.

Perhaps it is time Jerry had a break. It’s been a long hard run.

But without Jerry’s passion, his protective watch over the company he built from the ground up, can Yahoo continue to survive?

Some analysts have said that Jerry has been an impediment to the sale or restructuring of the business. In addition to leaving the board, he is also giving up his title of “Chief Yahoo”, which may give CEO Scott Thomson a bit more freedom. If not more pressure from shareholders.

For me, Yahoo is a household name. I have Yahoo mail, I love my localised Yahoo7 (partnership with Channel 7 here in Australia) and I love all the other ‘channels’ they have on their homepage – a real one-stop shop for news and everything else when I get into the office in the morning.

However, what does a search and advertising company need with Flickr, Yahoo Greetings, Yahoo Personals, Del.icio.us, Yahoo Pets, Blo.gs, Upcoming.org, Yahoo Music, Yahoo 360, or Horoscopes?

Such services have offered little value to Yahoo over the years.

The company has spent its time and resources maintaining services with a huge, financially unjustified overhead; all the while, its search market share continues to dwindle.

To remain a profitable business, Yahoo needs to refocus on the search market. They reckon the global search market is worth about US$11 billion a year. Yahoo should now concentrate its efforts on taking a bigger slice of that very big pie.

So long Jerry and thanks for everything.