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by Stephen Logan on 14th May 2012
With the unceremonious exit of Scott Thomson as the CEO at Yahoo! things are looking even more disorganised and rudderless than usual at the former Search Engine giant. So what’s next for Yahoo! and can they ever get back on track.
It’s been a bad few years for the company so far. When Scott Thomson came on board, he was there to streamline the company and make it competitive once more. Four months and a string of allegations regarding CV tampering later, and he is out the door with interim CEO – Ross Levinsohn – taking over the helm.
His job was certainly not made easier when a major stockholder, Daniel Loeb, started digging around in Thomson’s history – kicking up quite a stink when inaccuracies were found. After the unsuccessful tenures of Co-founder Jerry Yang and Carol Bartz, Yahoo! appeared to be in last chance saloon already, now their plight appears to be descending quickly into farce.
Remember, it wasn’t all that long ago that there was discussion of a possible resurgence at the company. They invested heavily in unique content, gambling everything on display advertising revenue. This came off the back of abandoning search entirely, following their cut-price deal with Microsoft to incorporate the Bing engine. Whilst they are still a major player in the display ad market, Yahoo! is a brand tainted by history.
However, it is this history that is acting as a life support for the ailing company. Early investment in Alibaba gives them a lucrative asset, as does their huge network of Yahoo! Mail users. This guarantees traffic and valuable impressions on the aforementioned content and ads. Whilst shares in Alibaba are likely to be sold in the very near future, their relevance amongst modern Internet-users is waning.
They face competition from newspapers, blogs, social networks, Google and other service providers. Essentially, Yahoo! have a number of target markets, but haven’t been able to master one. This has led to a messy portfolio of products and content that doesn’t have a clear focus. Innovations have been few and far between, whilst job losses mount up – with 2,000 offloaded last month.
Essentially, it’s a company that’s in need of both a good idea and better PR. Whilst Google and Facebook continue to eat up advertising revenue and become channels for user searches, Yahoo! is something of a quick point of reference for those that have become accustomed to checking news and mail (including me). Whilst the idea of a homepage is slightly outdated, with Google, Bing, Facebook and all the other big players abandoning them, Yahoo! still use it as a showcase for everything they have to offer. It may be outdated, but, arguably at least, it still works.
Essentially, the company has to adapt and find a field in which to develop fully. Content is a solution, but may not be foolproof – particularly as others edge into the market. Even though Yahoo! continue to make money and have a reasonably healthy bottom line, these figures are dwindling and they can’t continue to offload staff to reduce overheads. Perhaps this is the moment that things turnaround, maybe it’s just another nail in the coffin. Whatever the truth, things are rarely dull in the ongoing soap opera that is the Yahoo! boardroom.