It's been a long time since I've written about product management and technology. I guess after dealing with it all day, I just don't have the interest or energy to write about the increasingly banal world that is technology, or more accurately technology reporting. I have often remarked that Silicon Valley is just like Hollywood, except not as good looking. Techcrunch is our Daily Variety, and we talk in terms of sequels or hybrids of past successes. It's like "Dances with Wolves" crossed with "Smurfs", it's like Loopt combined with flickr meets twitter. You get the idea.
So when Farhad Manjoo mused "Can Yahoo be saved", I couldn't resist as a former Yahoo, and also because it is one of the more cogent explorations. Light on melodrama, heavy on perspective. Makes me proud that he spent time on the Cornell Daily Sun, but alas I get nostalgic in a different way. But I digress.
Manjoo explains that the company is profitable (which surprises many people), that millions of people still visit (also surprising in the valley) and that there is great brand affection. But he says despite that, Yahoo has lost it's past glory because in the past you had many reasons to visit every day, and now less so. And that is expected given the time Yahoo came in to existence, the internet was very much like the big three/four network television. It was the biggest places to go, and for all intent and purposes the only place you could go. And like cable and satellite, higher quality channels proliferated. Remember when public access and CSPAN were a major part of the line up on your cable channel choice. Remember how bad (and how good ESPN was -- remember, it made its chops on America's Cup sailing. Have you watched sailing on TV. But also remember Keith Olbermann started there). But the cable channels got better, and since we still only have 24 hours in a day, Yahoo inevitably as a media property was going to lose viewership. It really is a zero sum game. Yahoo is still relevant in media in that it still does editorial well and that's why people still do visit.
Yahoo also cannibalized itself with it's own subproperties, sports, finance, Shine, Flickr etc, the goal was really like a traditional magazine group, something for everyone but not everything for everyone. The problem is these special interests don't get big, that's why they are called special interests. Like traditional media, the assets are in the economies of scale. Shared printing presses, etc. Yahoo was also relevant in that it was a one stop shop for mail, search and instant messaging. In search it lost its way, since it failed to realize that it was a technology, not a media play. And if Google or another company had not come along with the orders of magnitude better search results, it is most likely that search would have remained fragmented with the same lousy results of the past among multiple players. Alta Vista, Hotbot, Lycos really were all interchangeable and the name of the game then was index size, not search results quality. Others thought that search was a commodity back then, that was the prevailing wisdom. Unless you bought Google at $95 and held on, you are most likely engaging in some revisionist history with your memory.
So Yahoo continued to focus on the media game, and these media assumptions alter Yahoo's ability to reimagine themselves. Think about asking a fish, "how's the water?"
The first crippling assumption is that Yahoo is a brand, and that the umbrella brand matters. People in Yahoo relate to Yahoo mail, yahoo messenger, etc. But think hard of any media conglomerate where the umbrella brand matters. Conde nast? I read the New Yorker, Wired, Vanity Fair and Ars Technica. But I never think of the Conde Nast brand. The only time I think about Conde Nast is when I want to eat in their gorgeous cafeteria filled with gorgeous people. The brands under Conde Nast are independent, they don't reinforce each other. People want products, and will judge the products independently and in this case the brand association may be a hinderance. Think about the struggles with placing the Flickr brand in the Yahoo universe. Shine, should have just been Shine and you could login with your yahoo account. That's all. Note this happens with most consumer products. Think Unilever, would you conflate "Ben and Jerry's" with "Dove" soap. What about Google you may ask? Think about all the products that are getting sunsetted there.
The second assumption is that you can plan innovation. Rarely, do you invent in house the next great thing. You usually see it elsewhere and acquire. Apple may be the exception, but the initial iPod design came from platform components from PortalPlayer and Pixo, though Steve Jobs perfectionism was critical to the experience. Where did paid search come from? Google, no Overture. Google maps, acquisition of "Where 2 Technologies" from Australia. Critics will relent that you need to innovate and that implies invention from within. When in reality it will be about finding something off the beaten path. An aggressive venture arm or a incubator program will be about obtaining a portfolio of "call" options on the industry. You do have profits and you do have money in the bank. You may want to outsource your venture arm, since...
The third assumption is that being the cool kid matters. Yes and no. Yes in that it helps your corporate mojo which makes it easier to obtain and retain talent. No, in that in the tabloid business press remember the philosopher Henley "Kick 'em when they're up, kick 'em when they're down Kick 'em when they're up, kick 'em all around" The things featured in the cool kids press often aren't relevant. Companies such as color, Loopt and instagram won't move the needle for Yahoo. These products will get lots of press but it will be disproportionate to the impact, at best they will be niche products unless....
The fourth thing is that Yahoo needs horizontal network plays to regain "relevance". Unless the new kid is anything with a graph, protocols, APis, insurmountable amounts of data that can lead to network effects or defensible data moats. To get a play at these early start ups, the Yahoo money probably won't have the cachet. But this is where the action is for the long germ. Think transactions, payment systems, relevancy engines, configuration. Anything where there is a network effect or a collection of history. People don't leave flickr once they have their portfolio there. (An aside about flickr, photo sharing is a media property, not a technology. flickr is professional grade photography, Picassa is geek shoebox of photos - different aims, there is no global photo magazine). If a play does come about, don't bring it in too quickly to the Yahoo fold. Think Conde Nast.
Lastly, the fifth assumption holds true and is still a viable advantage is that Yahoo can deliver audience. A link off of the Yahoo homepage is the mother of all referrals. Everyone knows this. There is a pressure to refer traffic to Yahoo properties in the strict sense, Yahoo should use it's editorial advantage to link to whatever the new new service is. If an outside product really demonstrates value (which hopefully Yahoo has an investment stake in), it's audience can be a kicker to promote a product that deserves it, not just one where there is a financial interest present.
I've been asked about my thoughts on Yahoo, and these thoughts come from the best analogy of a rebirth that I can think of and it comes from China. Sina.com was very much the Yahoo of China, stagnating trying to figure out its future and its been made relevant again with it's Weibo (or microblogging) product. Think Twitter clone brought to life by Sina's ability to deliver audience, of a product with network effects (username and followers). There are many phoenixes in the tech world, Apple, IBM and Xerox come to mind. To paraphrase the saying "your ideas often go further if you don't insist on going with them" Yahoo can go further if it doesn't insist Yahoo comes along.
