It’s time for a reboot
I was at a local Singaporean event the day after resume gate, chatting with a great friend, who just left yahoo btw, and I told him straight away Scott Thompson would have to go. He joked saying it was a big deal but it would blow over. We bet a lunch at my favorite steak joint on Duxton hill in Singapore. I collected it last week.
Scott Thompson would have made changes at Yahoo but I am not sure he would have made Yahoo better. Yahoo might be big, it might have 700 million users (It is in no way signed in users or proven to be unique), but Yahoo is in a state of decline. Slow and steady but a decline nonetheless. Marissa may not be the one to turn it around but at the very least the shear optics of the move will benefit Yahoo bigtime. Already the peeps that I talk to who are still holding on at Yahoo feel there is some hope. Only time will tell since it will take years for a proper turnaround if it all possible.
Some housecleaning first. I worked at Yahoo for 2.5 years. I was in global product management – I worked for Sunnyvale but was based in Asia. I was deeply involved in 2012 planning and I know a lot about how the Yahoo tech stack works.
I will also preface that I just call it as I see it but I am a longtime user of Yahoo as well and you can never stop bleeding purple even if you have stopped working at Yahoo.
Yahoo is neither wholly a tech company or a media company. It is a mix and it mostly happened by accident. Yahoo can no more solely become only a tech company or only a media company anymore than I can change my race. Think of yahoo as a zebra – the white stripes are the tech and the media is the black. It’s impossible to turn a zebra into an all black horse or an all white horse. It is and always will be a zebra. Yahoo should embrace and extend its zebraness – not try to become something it isn’t.
Being a media company only, means Yahoo would need to shed an enormous amount of staff to reign expenses inline with the cost and revenue of a media company. To become only a tech company during the reign of such competitors as apple, google, facebook and twitter would be suicide. Yahoo couldn’t compete but staying a zebra leaves lots of room for carving a niche that only the size of a company like Yahoo could pull off.
Here is an updated list of my pointers:
– Yahoo must start killing the things that dont work ASAP. Nothing feels better than making the hard decisions to close things and move on. I am not going to make that list here but within Yahoo it is pretty well known what needs to go.
– Yahoo should double down on messenger and follow through with the unfunded plans that were created for messenger during the 2012 planning sessions. Messenger is practically the only cross platform messaging product. Sure it has seen its better days but with some funding, some vigor and integration into the media products – it could easily shine again. Only in America has it truly been pummeled but overseas it is still big.
– Yahoo should get back into ecommerce in a big way. Yahoo is sitting on some amazing payment infrastructure, has tons of traffic and could easily partner with many of their advertisers (consumer good companies) to offer a first rate buying experience. In the emerging markets Yahoo could have been a first mover in ecommerce but in typical Yahoo fashion – the powers that be would take years to mull over an decision to enter a market will other companies pounced.
– Yahoo needs to start moving ideas from whiteboard to execution much faster. Livestand took forever but it didn’t need to. Project zed is also taking too long and should have already shipped in pieces. Yahoo is plagued by an old, but recently instigated, planning process that requires too many meetings, too many bodies and still uses spreadsheets. It’s unreal.
– Yahoo needs to quit inventing standards and relying on y! versions of products to bring things to market. Recent security blunders point a much needed harsh light on the fact that the paranoids win too many infrastructure battles at Yahoo but yet it really didn’t prevent a proper security blunder – stupidity and lack of proper code reviews did. Yahoo invests far too much time inventing standards. Forcing old y! approved code stacks on engineers and spends far too much time inventing a standard while also trying to ship something. This is what killed Livestand. Trying to invent cocktails and it’s various node.js counterparts was waste of time. Livestand should have been a native app and later, once it was winning, the various teams could have worked to make it more of a hybrid web app. But who needs that when competing with the likes of flipboard? On top of the standards issue there is also the fact that yahoo is still primary c, java and php. Name me a competitive global startup building their wares on that stack? Yahoo needs to embrace new stacks and worry about product innovation – not allow the internal standards committees to hamper the company.
– The sports franchise needs to power up now. Open up more, turn the fantasy mantra into a Yahoo franchise and go deep on mobile. Sports is killing it at Yahoo but like everything else it is underfunded. Everyone who really needs the money is sharing the money with other products that don’t make any money.
– The tv products need to go. Yahoo waited too long to put the pedal to the medal – google & apple have completely out innovated Yahoo. It is another time and money sink.
– Yahoo groups should be properly revived and tightly integrated with Yahoo email. This combination has a lot of eyeballs and can be easy monetized. Yahoo must not give up on email it is an incredible distribution tool.
– Yahoo scale disease is well known and real. Between brickhouse, catalyst and acquisitions – Yahoo struggles to take small, new things and stay with them long enough to make them big. Internally people shoot stuff down for not reaching millions of users or having revenue in one year. Sure – not everything deserves to live but there needs to be a balance struck if Yahoo is going to incubate and build new things internally.
– Yahoo is essentially 4 companies – Americas, Europe, Asia and the joint ventures. Too many silos, too many decision makers and too many competing stacks. For Yahoo to really get back to competing it must regain a top down approach and realize that strong corporate leadership will be needed to compete with truly globalized players.
– Yahoo might want to explore doing more joint ventures to enter new emerging markets – like Africa, parts of southeast Asia and Russia. Yahoo can offer the tech and the local partner can bring the media and run government interference.
– Yahoo will probably need to get back on the acquisition horse and buy some companies. My guess is only a big company will move the needle at this point but Yahoo’s track record is nothing short of abysmal when it comes to buying companies. It can be fixed but management must make compromises around integration issues and must take the long view.
I love Yahoo and I look forward to seeing how it all plays out.