Yahoo and its future

Yahoo has come a long way since the booming of the internet era, being on the top of the game to their stock price plummeting and undergoing series of CEO changes. Throughout the years of adversity, Yahoo still remains to be the top 4 internet sites in terms of visitors, following Google, Facebook, and MSN. There are still about roughly 700 million users, who visit the site every month, but this number has been declining at a steady rate. Recently, Yahoo announced shut down of their operation in Korea, losing in competition against the local players. So, with the new CEO in Marrisa Mayer, it would be very interesting to see where this company is heading into.

Mayer recently announced the strategic direction of Yahoo going forward. There are a couple of things that come into my mind that raises doubt on the legitimacy of her focus. First, Mayer mentions that Yahoo needs to focus on their “core competency.” However, I think it would be better written as “find and develop our core competency.” Yahoo has been going back and forth between their strategic focus, once focusing on building their media business and now focusing on improving user experiences across all of their products. The ultimate question is, “what is their core competency?” Indeed, they have a few quality contents in their Yahoo Finance and Flickr, but all of their other products have almost no presence at all, and even with Yahoo Finance and Flickr, they have failed to monetize those products. Unlike Google, whose launch of products, such as Youtube and Goolge Map gained wide recognition, Yahoo has been focused on delivering quantity over quality. Yahoo needs to stop looking into acquiring additional services, such as Hulu and Opentable, and start to look for ways to divest some of their services and really focus on enhancing those products and ways to market them efficiently to create buzz and attract users.

The second criticism also goes along the aforementioned points. Mayer announced that Yahoo will focus on building partnerships. There are talks between Yahoo and Facebook to collaborate going forward. Facebook provides that wide user bases as well as rich data set, and would allow Yahoo to piggy back on social network. On the other hand, what is Yahoo going to offer to Facebook? Yahoo’s search engine runs based on MS Bing, and their development in search capability has been halted since 2009. Also, Facebook being more popular company nowadays, the quality of engineers are greater at Facebook. Unless the collaboration is based on a personal relationship between Mayer and Sheryl Sandberg, Facebook is making a huge mistake as Yahoo has nothing to offer.

Is Yahoo a media company or IT company? They need to focus on finding their core competency and spend the next several years developing those and at the same time focus on the marketing effort to attract customers and boost their advertisement revenue.