Amusing post today over at paidContent.org about Yahoo and the recent cuts they’ve made in their product lines. The post, written by Joseph Tartakoff, suggests a fun game to play over the next few weeks, called “What Should Yahoo Cut Next?” Yahoo! obviously needs to trim non-core assets and justify every dollar being spent, particularly in this economic climate and especially given the scrutiny they’ve been under from the Street. As such, Yahoo has already shed its FareChase travel engine, Yahoo Briefcase and its Jumpcut.com video site. Other properties the post recommended cutting were Yahoo Foods, Zimbra (messaging and collaboration application), Yahoo Small Business, Yahoo Health, and Yahoo Kids. It’s debatable what actually should be cut, but that’s perhaps for another time.
What struck me was just how far afield Yahoo has strayed in its attempts to be relevant. The challenge of trying to be all things to all people is ironically not delivering depth in areas that offer the most differentiated value. Yahoo lost sight of it’s unique position in the marketplace and didn’t stick to its knitting. Just look at its most recent mission statement, “Yahoo’s mission is to connect people to their passions, their communities, and the world’s knowledge.” Sound familiar? For good reason. Google’s mission is to “organize the world’s information and make it universally accessible and useful.” Yahoo’s original mission? ”To be the most essential global Internet service for consumers and businesses.” Sure, there is constant pressure to innovate and pursue growth, but I wonder what Yahoo would look like today if it stuck to it’s original mission? Somewhere along the way, they lost their view of the horizon and likely allowed too many projects, acquisitions see the light of day. Granted, it’s difficult to operate companies in an environment where the perceived value of the guy next door is always greater than reality. Everyone wants to be working in a fun culture on the coolest products, and Google has deftly tapped this ethos.
What Yahoo has failed to see is that they have the greatest asset sitting right in front of them – they have a relationship with their consumer. Sure, they track what people do on their network of sites, but online behavioral metrics only provide so much guidance. Instead, they need to be engaging their consumer in a dialogue; one in which they ask the right questions and actually listen to the answers (no matter the criticism). People marvel at how MTV has consistently been able to reinvent themselves over the multiple decades they’ve been in existence. The reason? They listen to their consumer and maintain a constant dialogue, even taking cues from them about content and services. Not everything works, but they are able to see it, quickly react and adjust.
So, where does that leave us today with Yahoo? The Yahoo! brand is still exceptionally strong, and, many of their services still maintain dominance (email, as an example), with much room to grow and evolve. Perhaps this economic environment will force Yahoo back to it’s knitting, emerging leaner and more fierce. If they listen to their consumer, they’ll have a very clear roadmap to get back on path. Their best hope is to achieve this while Google strays too far by listening to it’s stable of PhD’s instead of the consumer. The signs are already there, so don’t doubt it’s potential.
