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Can Marissa Mayer save Yahoo! (Part 4): Mobile, Advertisements and Monetization- Mayer still has a point to prove.

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 4, 2013

One place where these hard-core researchers might focus their attention is search. Although Google dominates the space and Yahoo has had Microsoft (MSFT) power its search engine for the last three years, Mayer still believes Yahoo can find new ways to present search results. “Search is far from over,” she says. “It’s physics in the 1600s or biology in the 1800s. There’s miles to go before you get to quantum physics or even a microscope. There’s a lot of that you can do once you have mobile, and we are going to be very focused on the user experience.”

Unlike other mobile powers such as Apple (AAPL), Google, Facebook, Samsung, or Amazon, Yahoo neither controls an operating system nor makes popular hardware devices. And unlike Netflix—or HBO (TWX) or Showtime (CBS), for that matter—it doesn’t own blockbuster shows people are willing to pay to watch. Yahoo’s Weather app may delight design aficionados, but it doesn’t hold a user’s undivided attention the way an episode of Game of Thrones does on HBO Go. Mayer has locked up at least some exclusive content. In April, Yahoo purchased the online rights to old Saturday Night Live clips for an undisclosed amount. She says her strategy is to partner with other players, pushing Yahoo’s licensed content, original shows, and collection of apps to other companies’ hardware. For example, Yahoo makes the default stock-quote application on every iPhone, and Mayer has talked about doing more such deals. The risk is that any company might decide at a moment’s notice to replace Yahoo’s offerings with something else.

Even if its free mobile apps become huge hits, Yahoo has to figure out a way to monetize them. The company is no doubt quietly developing a strategy to advertise within its mobile services, though Mayer will only say she’s focused on developing products that users love. Even there, though, rivals are ahead. Facebook stock rose 30 percent the day after it revealed that 41 percent of its revenue now comes from ads on phones. Although Yahoo doesn’t disclose mobile revenue, Macquarie Securities analyst Benjamin Schachter estimates its mobile ad percentage is well under 10 percent.

For all her credibility with engineers, Mayer is an unknown to Yahoo’s biggest advertisers. “To be out there meeting with clients and advertisers is not her thing,” says Marla Kaplowitz, the chief of media agency MEC North America. As for its products, “Yahoo still needs to be a lot more nimble,” says Kaplowitz, noting that running large ad campaigns across Yahoo’s stable of services is particularly cumbersome.

Yahoo’s revenue topped $7.2 billion in 2008 and has since fallen by almost half. For the last 12 months, sales were $4.8 billion. “I’m not confused; I know we have a lot of work to do,” Mayer says, standing up in the URLs cafe as the FYI session is about to begin. “Up until now, things have gone really well. If you tell me that I’ve got to go back to last July and do it all over again, I’m not sure I could. I was optimistic, but a lot of the progress we have made has surpassed even my expectations.”

By way of explanation she mentions an improbable role model: Sarah Hughes, the American figure skater who competed at the 2002 Winter Olympics in Salt Lake City. “No one thought Sarah Hughes had a chance to win,” she says. Then all the favorites flubbed their routines, and Hughes landed seven spectacular triple jumps and ended up with the gold. “Afterward, Hughes said that she didn’t quite know how she had done it,” Mayer says, “and she wasn’t sure she would ever be able to repeat it. It was the routine of her life.”

It’s an inspirational story that could be interpreted in two ways: Plucky underdog triumphs because of talent or because superior rivals choke. “I feel like Sarah Hughes,” Mayer says. “Actually, I still have her performance saved on my TiVo.”

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Can Marissa Mayer Save Yahoo! (Part III): The Product Focussed Turn-Around

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 4, 2013

Continued from Part II

Cahan’s division, called Mobile and Emerging Products, now exceeds 330 people and has its primary offices in New York, San Francisco, and Sunnyvale, Calif. Underscoring mobile’s importance, Mayer ordered the team’s work space in Sunnyvale renovated. Unlike the soporific purple and beige cubiclevilles that fill the rest of Yahoo’s dot-com-era headquarters, the mobile group has adjustable workstations that let employees sit or stand. There’s an exposed ceiling, whiteboards on every other wall, and big colorful posters that display giant iPhone screens.

The division’s employees also get personal attention from the boss. Mobile engineers describe regular product reviews where Mayer pushes them to move faster and think bigger. She often focuses on individual pixels on the screen and is comfortable letting her instincts trump empirical data. “Just because we have a ruler doesn’t mean we have to measure everything,” she said at one review, according to Lee Parry, senior director in the mobile group and a seven-year Yahoo veteran.

Over the last few months, Cahan, Parry, and their colleagues have released apps for Yahoo Mail, Weather, Fantasy Football, and the Flickr photo-sharing service. They’ve also unveiled the Yahoo news-reading app, which integrates technology from Summly, a startup founded by London teenager Nick D’Aloisio that Yahoo bought in March for $30 million. The app uses Summly’s text-summarizing software to abridge everything from sports game recaps to Mayer’s own quarterly earnings presentations.

Yahoo says that after redesigns, traffic to mobile applications such as Yahoo Mail, Yahoo Weather, and the news app is up 120, 150, and 55 percent, respectively. There are clearly more apps on the way: A large chart on the office wall has a schedule crammed with product launches and suggests that apps for Yahoo Groups and Messenger are in the works. “We know there is going to be skepticism,” Parry says. “The fact that we are already seeing the payoff is giving everyone faith that we’re on the right path. That’s what Marissa is so great at. She’s shining a light and beating a path to the horizon and saying, ‘This is where we are going.’”

There was no shortage of skepticism when Mayer departed Google, her only professional home, for the dismal scene that was Yahoo last summer. A pay package valued at $36.6 million in salary and stock for 2012 alone, according to company filings, was no doubt convincing, but Mayer insists she was passionate about the opportunity. And though she vows to focus an interview on corporate strategy, she can’t resist describing her momentary panic and disappointment when she thought she didn’t get the CEO job.


Mayer had pursued the position in total secrecy. She had to say the code words “project cardinal” to a limo driver waiting outside her Palo Alto home, who then drove her to a Silicon Valley law firm for a meeting with Yahoo’s board. The board was supposed to call with its decision by 8 p.m. When the hour arrived, she and her husband, investor Zachary Bogue, were at a dinner party, and Mayer was battling the urge to keep checking her phone. “I saw such an opportunity here,” she says, “and felt like I had so many ideas.” She also felt that after 10-plus years at Google, it was time to leave.

At 9:45 p.m., Mayer’s phone was still silent. She was crestfallen and making frantic hand gestures to Bogue that she wanted to leave the party. (Bogue, enjoying his seat next to former San Francisco 49ers quarterback Joe Montana, wanted to stay.) Finally, as they were saying their goodbyes, Mayer got a call from Jim Citrin, a partner at Yahoo’s executive recruitment firm, Spencer Stuart. Propriety demanded she let it go to voice mail. A year later in the Yahoo cafeteria, she taps her iPhone screen and plays it: “Marissa … you should be smiling,” Citrin is saying. “We’re smiling. Call me ASAP.”

Mayer is relentless in her search for other believers. In addition to her mobile hiring spree, she’s begun shifting funds back into Yahoo’s research organization, which previous CEO Thompson gutted in a round of layoffs. She says the lab has a goal of hiring 50 Ph.D.s this year and has already signed up 30.

Continued to Part IV

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Can Marissa Mayer Save Yahoo! (Part II): From Chaos to Marissa Mayer

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 3, 2013

Continued from Part 1

Shareholders are still waiting for the change that really matters: revenue growth in search and display advertising. In the second quarter, Yahoo’s revenue dropped 7 percent from the year before. Meanwhile, Facebook (FB) and Twitter are taking ever larger chunks of everyone’s time; Netflix (NFLX), Hulu, and’s (AMZN) Prime Instant Video service have become online TV networks; and Facebook and Google are carving up the display advertising business. Internet users no longer consume big meals of news and entertainment at a single Web portal—Yahoo’s previous raison d’être. Now they snack on morsels of information from all corners of the Web.

Yahoo timelines

Yahoo executives may have stopped being in denial, but publicly at least, they don’t own up to the long odds. Kathy Savitt, a former Amazon exec and Mayer’s marketing chief, won’t even call her mission a turnaround. “We call it a renaissance,” she says, “because Yahoo is still one of the largest brands in the world.” To Mayer, the emergence of smartphones resets the game in Yahoo’s favor. “What people want on their phones is content. It’s just another way of delivering the Web,” she says. “I’m an optimist. I think all leaders are.”

Mayer decided early that Yahoo’s fortunes were tied to devices. Upon taking the job, she memorized a list of the top things people do on their cell phones and would recite them, unasked, to family and friends: phone calls, texts, e-mails, maps, weather, news, stocks, sports, games, photo sharing, group messaging, celebrity gossip, and financial news. “I remember financial news and stocks were both on there, and that sounded like cheating because they’re kind of the same,” she says.

Yahoo wasn’t going to pursue advances in voice-recognition, texting, or maps—she knew too well the expense associated with such development as well as the distance of Google’s head start—but the rest aligned closely with Yahoo’s most popular services. Yet when she began reorienting the company, Mayer discovered there were only a few dozen engineers working on apps. That’s not because Yahoo was late to the mobile revolution, but because it was too early. A decade ago, Yahoo built a mobile team under a former executive named Marco Boerries. The effort ran into a classic Innovator’s Dilemma: Yahoo’s success was tied to the traditional Web, and the company didn’t want to risk anything that might undermine profits. When Bartz took over as CEO in 2009, Boerries left to start a mobile company in his native Germany, and his group was disbanded. Some engineers were repatriated to their product teams, where they had trouble persuading colleagues to focus on mobile. Almost all are working elsewhere now.

Among Mayer’s top priorities was to reestablish a centralized mobile group. To run the unit she selected Adam Cahan, 41, whose startup, IntoNow, was acquired by Yahoo for around $20 million in 2011. Cahan, like Mayer and many of her lieutenants, is an exuberant dresser. For an interview, he wears gray, linen-covered shoes, a shirt with the top two buttons open, and a stack of bracelets he calls his “man jewelry.” Cahan says his mission is to build the largest software-only mobile development team in the world and to create applications based on Yahoo’s commonly used Web services, such as its Fantasy Football league and the feed of headlines and entertainment news on its home page. It sounds simple enough, but Cahan insists it’s a big change. Before Mayer took over, “there were elements at Yahoo very focused on the mechanics of a quote unquote turnaround,” he says. He argues that it’s a significant shift just to focus on users and build products instead of catering to the balance sheet.

Cahan’s biggest challenge is that engineers who develop mobile apps are young and scarce. Working for a limping giant such as Yahoo is rarely high on their list of personal goals. So Mayer and Cahan have bought talent, spending close to $200 million to acquire at least 18 startups, in addition to blogging network Tumblr for $1.1 billion. In each instance, Yahoo has locked up engineers with two- to four-year contracts and set them loose to build apps and hire more mobile developers, according to two people familiar with Yahoo’s deals who weren’t authorized to speak for the company. Despite the cash, it’s not an easy leap for entrepreneurs to make. “I was really worried,” says Josh Schwarzapel, a senior product manager for mobile whose video chat startup, OnTheAir, was acquired by Yahoo for an undisclosed amount in December. “I had a lot of friends who came in [to Yahoo] and were rejected by the host.”

Continued to Part III

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Can Marissa Mayer Save Yahoo? (Part I): Yahoo Stirring

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 3, 2013

Profiling an interesting account of Yahoo!’s turn around featured by Bloomberg, Businessweek and Economic Times


Marissa Mayer is sitting in URLs, the Yahoo! (YHOO) cafeteria, making the case for the future of a company that almost everyone in Silicon Valley views as doomed. Employees swarm around her, assembling rows of chairs for the afternoon’s FYI, a new weekly ritual where employees get to lob questions at Mayer and her executive team. It’s been a long July, in which Mayer’s one-year anniversary as chief executive officer was marked with an uninspiring second-quarter earnings report. Mayer prefers to focus on the company’s increase in Web traffic. She won’t give numbers but says it’s enough to erase the entire decline from the previous year. “Name another Internet giant that went through three years of decline and then started to grow again,” she says. “It’s a very good sign.”

When Mayer left her executive role at Google (GOOG), she knew she was taking on what might be the hardest job in the Valley. Yahoo has had a lost decade, laboring under a series of failed product strategies and CEOs. It was a Web directory under founders Jerry Yang and David Filo, then a Web portal under Tim Koogle. Terry Semel made it a tech company with Hollywood pretensions, and, most recently, it languished under Carol Bartz and Scott Thompson as a dot-com relic known mostly for losing its top talent to competitors.

Now Mayer wants to transform it into a media company for the mobile age. She’s refocusing her 11,500-employee company on the kind of personalized, habit-forming content that people view on tablets and phones. That means new kinds of e-mail, messaging, and news applications, tailored to the location-aware and always-on nature of the mobile experience. “I hope that at some point we are looking at a world where mobile is a majority of our revenue,” she says.

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Yahoo! Axis. Impressive! Hope they dont mess it this time.

Posted in Internet and Search by Manas Ganguly on May 25, 2012

In the course of the last decade Yahoo! has lost out on every major initiative whether be Yahoo profiles and chat (To Facebook) or Search (to Bing) or Flickr (To Instagram). Once the most important Internet company, Yahoo! has been reduced to a state of profitable (shrinking fast) irrelevance. There was no major stake on how Yahoo! could influence Internet browsing behavior or leverage search or take a stake in the mobile bandwagon. Therefore Yahoo! Axis a refreshing new initiative from an almost dinosaur internet company. Axis essentially is a browser for iOS devices and a browser plugin for desktop computers. It has a premise and the intent is in the right direction.

Interestingly now, Axis will help Yahoo! skip trying to compete with the dominant desktop browsers and  instead offer a plug-in that works on all of them. That enables Axis users to extend their browsing habits to the Axis apps for iPad and iPhone, which is much less settled territory. Mobile and tablet browsing is the next frontier, and Yahoo is wise to focus the next stage of its business there.

  1. It essentially seeks to integrate the browsing and search experience. Users will not be required to launch a new page. Both the experiences are well knit on a single page with the usual bells and whistles. Why waste time on the search engine when the search process is built into the browser. Axis does away with the blue links that have defined internet query results for a decade and replaced them with previews of pages that might provide the information being sought.
  2. Understandably the experience is touch led – which is a key to the mobility, smartphone and tablet platform. Finally then, Yahoo! has some ground on hand held devices with the Axis app.
  3. Also key is the seamlessness of the experience which can be shared across all iOS devices. It would be interesting to see how Yahoo! recreates the iOS type experience across a range of disparate platforms each not exactly talking to the other. Possibly the plug-in would do the trick… but experience is the key here.
  4. On the flip however, Axis is somewhat of a double edged sword because it by-passes the search results page. Yahoo still makes a quarter of its revenues from the sponsored links on this page.

However, Yahoo! is betting its future on the convenience and speed of this search concept. The seamlessness of the experience is the consumer hook. What keeps them there is the way Axis syncs browsing history between the desktop and mobile versions, so users can switch back and forth easily between devices. Once there is enough data on the users, Yahoo can sell you all its services by promoting them heavily in the app and its search results.

Of late Yahoo! has lurched from one crisis to another. It still makes money but the future is very uncertain given the mobile dominance building on the internet, advent of Facebook and Google. Axis is thus a step in the right direction. Yahoo! still wants to take one more fight..

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Yang departs: The choices before Yahoo! Now

Posted in Internet and Search by Manas Ganguly on January 19, 2012

The time has come for me to pursue other interests outside of Yahoo!- Jerry Yang

Yahoo! has not delved into details regarding Jerry Yang’s exit.. It didn’t really have to.

While Yahoo! remains one of the biggest draws on the web with about 600 million people visitors a month, but like AOL, that other dinosaur of the first era of the internet, Yahoo! has been left flat-footed as Google and Facebook emerged as the next generation of online leaders. Sales have fallen at Yahoo! since 2008 and Google and Facebook are taking an increasing share of its display ad business. The firm has cut costs and found ways to boost its profit margins and keep earnings up. But the pressure for change is on – and it shows.

In 2008, Microsoft’s Steve Ballmer launched a $44.6bn (£28.8bn) takeover bid for Yahoo! but it was resisted, especially by Yang, and eventually the deal collapsed. Yang was the man who fought hardest to reject Ballmer’s offer. Yahoo! is currently worth about $19bn but now that Yang has gone, it may require a more radical fix.

Yahoo! is still huge, but what is sort of company is it? They are not going to beat Google in search, or Facebook for the social network. They will continue to get ads because of their size, but if they are not seen as relevant – and they are not – the quality of those ads and the price paid will fall. In today’s environment, companies that are not seen as relevant are dead. Yahoo! is on its downward spiral. Yahoo! lost its way long ago. It’s big in news, sport, finance, email and it owns Flickr, the photo-sharing site. But somehow one of these sites add up to a whole. It will take a Steve Jobs to turn Yahoo! around. Someone needs strips it down to the core before building it back up again. Yahoo! recently appointed a new chief executive, Scott Thompson, former boss of eBay’s online payment company PayPal. He replaces Carol Bartz, acrimoniously ousted by a board she dismissed as doofuses. Given the firm’s shoddy record with bosses, she might have had a point. But so did they.

Bartz’s strategy – trim costs, sack people, sell stuff – did little for Yahoo!. According to comScore data, the number of minutes that US website visitors spent on Yahoo! sites during her two-and-a-half years as chief executive fell 33% while the stock price stayed flat.

The big question for Scott Thomson is what is he going to do that’s different. Thompson is likely to sell off Yahoo!’s Asian assets, a move many believe Yang was holding back.Yahoo! bought a 40% stake in China’s Alibaba in 2005 for $1bn. It was a great buy. Analysts calculate that the Alibaba holding, along with the company’s stake in Yahoo! Japan, is now worth $17bn.

But what happens after that? Yahoo! is undergoing a “strategic review” and competitors smell blood in the water. Microsoft is reportedly looking at Yahoo! again, albeit at a far lower price, and private equity firms have been sizing it up. Jack Ma, Alibaba’s founder, has also expressed an interest and is tipped as a likely buyer for Yahoo! Japan and maybe more. If Yahoo! were to be acquired by Alibaba that would be the biggest Chinese takeover of a US company in history.

Scott has the choice of turning Yahoo! around. However, that’s not really his skill set. The rumour in Silicon Valley is that he was far from the company’s first choice. Like Bartz, who came from a design software firm, Thompson does not have a media or advertising background. But if that doesn’t work, at least he’s a finance guy. He’ll know how to package this company for sale.

With Yang gone, a sale of all or part of the business looks more likely. It’s what comes after this that worries. Yahoo! is one of the top sites in the world. That’s a lot of opportunity. But if it can’t redefine itself, it could be scattered to the winds.

Suggested Reading:

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2012: Make or Break for Yahoo!, Blackberry and Nokia

Posted in Mobile Devices and Company Updates by Manas Ganguly on January 13, 2012

2012 promises to be a very tough year for Yahoo!, Blackberry and Nokia who having ruled their respective domains for a decade, suddenly risk redundancy due to lack of innovation. In the technology domain, historically, once an incumbent looses a pole position to challengers riding a new wave of technology, the incumbent no matter how large and dominant finds it difficult to come ahead and regain the leadership position. This has been the story with Yahoo!, Blackberry and Nokia.

• Blackberry and Nokia have eroded 81% and 50% of their m-cap in the last year and are 90% off from their historical highs. Same goes with Yahoo! which is 85% off from its historical highs in the heydays of dot com bubble.

• All three have leadership changes in recent/one year and have made a few hard choices and a few other risky ones to get back into reckoning. Can Stephen Elop turn around Nokia, Can Scott Thompson revive Yahoo and Who replaces Lazardis/Basilie at RIM (and more importantly how fast)

Value erosion* is the m-cap loss in last 1 year

• The Market position of Yahoo!, Nokia and Microsoft is vastly altered from 2 years back. Yahoo! is gradually loosing its No.2 spot to Microsoft and the search relevance in the overall picture. Nokia lost its Smartphone leadership to Samsung and Apple in 2011 and as per reports, Samsung forecasts walking off with the Mobile Phone manufacturer crown in 2012. Blackberry has lost out to Android and Apple in good measure and its Playbook has been drubbed. There isn’t much that is expected from future releases of BB OSs and Devices.

• Blackberry appears to me as the worst in the lot and is a prime acquisition target. Same goes with Yahoo!. The Nokia Lumia series of Windows phone has seen some limited success and also been able to secure partnerships with T-Mobile and AT&T. However there is talk of Microsoft acquiring Nokia Smartphones which leads one to think how would Nokia compete without Smartphones?

2012 will need to be the turnaround year for these three and if not then there is a possibility that there could be partial or full acquisition and buy outs very soon.

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Hey Scott! Here’s the challenge. (Yahoo!’s future)

Posted in Internet and Search by Manas Ganguly on January 6, 2012

In 5 years, Yahoo! had 4 CEOs leading it starting from Terry Semel, Jerry Yang, Carol Bartz and Scott Thompson (the latest recruit). The appointment raised questions among analysts, since Mr Thompson, 54, has no experience in online content and advertising, Yahoo’s chief sources of revenue. The timing of Mr Thompson’s hiring also came as a surprise, given that Yahoo’s board has been considering a sale of all or part of the company since firing Ms Bartz four months ago. Yahoo’s stock hasn’t traded above US$20 in more than three years. Microsoft Corp offered to buy Yahoo in its entirety for US$33 per share, or US$47.5 billion, in May 2008. Yahoo trades at $15.58 now which is less than half of what Microsoft wanted to buy it for.Analysts estimate Yahoo’s revenue last year totalled about US$5 billion, down from nearly US$7 billion in 2007. During the same span, Google’s revenue soared from US$17 billion to an estimated US$38 billion. Thanks largely to cost-cutting measures imposed by Ms Bartz, Yahoo has become more profitable. Last year, it earned an estimated US$1.1 billion, up from US$660 million in 2007. Still, investors are disappointed with the downturn in revenue at a time when advertisers are spending more money on the Internet. Yahoo! is a waning off fast and thick and it now is Mr Thompson’s gamble to bring back some respectability to the beleaguered Internet giant.

It will take a miracle to revive Yahoo. For long,Yahoo! has rested on its banner ads and scale based business models to make money and has skipped taking stakes in two generations of Internet based services: Mobility and Social Web. The question that Yahoo! needs to answer itself is “What is their business competency and how do they intend to deliver value to their consumers?”.

Even now Yahoo! bets on its scale to do something around a very mediocore competency area- online advertising,media and content. There are many others in the same business and there is nothing really differentiated that Yahoo! currently seems to be planning to take it to its future.

To my limited understanding, Scott Thompson has to provide answers/action to the following questions fast

1. What is Yahoo!’s future business? Yahoo! will need to really search deep into the future to figure out which businesses would make sense to it and what competencies could be brought to the fore.

2. Yahoo! must exit its long tail services as soon as it can- This will increase focus on what it really could do with any difference and possibly provide capital for a larger scope in online business.

3. Yahoo! must stop being quintessential US and regionalize fast- Yahoo! could look at taking the pole position in emerging economies such as India, Indonesia, China, South Africa with a regional focus. The next big growth curve is past Europe and America and if Yahoo is able to capitalize its internet lead in these nations, there might still be a story waiting to happen.

4. Is there a story in enterprise search or vertical searches on small screen computing devices? There may be a choice out there. Is there a case for search engine for Apps?

5. Can Yahoo! create the ability to search through integrated user linked information across Flickr, Yahoo mail accounts, tweets, FB updates

6. Is there a case for Yahoo! becoming world’s largest content aggregator? It sure has the bits and pieces. Yahoo! will need to think about stitching all the disparate pieces together in quick time.

This may not yet be the magic portion, but Yahoo! needs to look at discontinuity in its product lines, in its DNA and its thinking to get ahead.

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Yahoo! Present Tense, Future Unsure!

Posted in Internet and Search by Manas Ganguly on October 4, 2011

There are two separate and contrasting reports on the fate of Yahoo! post the exit of Carol Bartz. Yahoo!’s which could be regarded as the largest Web 1.0 dinosaur has possibly seen all its glory days and is simply unable to find its niche in the fast changing, quickly evolving Web 2.0-3.0 space. That is a pity considering that Yahoo! Was one of the first social companies (Yahoo! Chat anyone?). But then it lost the plot in SEO (Search Optimization) and then again in SNS (Social Networking). By the time Yahoo! Moved away from its display advertisement focused domain, the landscape had changed very nearly completely and the likes of Facebook and Google were well past it. Yahoo again had the first movers in Mobile space with some early link ups with Nokia- Yahoo on the go! but again lost the plot. Read up on the Fall of Yahoo! here

Coming back to the reports: the first one was about Yahoo! Preparing for a strategic sell-out and the fact that Yahoo! board should have sold out to Microsoft long back when Ballmer made a very generous offer. Yahoo’s long-time advisers Goldman Sachs and Allen & Co are preparing to give potential buyers financial information which is a sign that Yahoo is about to put itself on the auction block. Sale appears to be the best way forward ro get rid of the biggest millstone about the company’s neck – its board.

Yahoo has been consistently underperforming and made some howler decisions. Attempts including a very aggressive positioning effort (by Ms. Bartz) to turn the company around failed and the share price is much lower than it was when Ballmer made his bid.

In this context, the second report quotes Shashi Seth, who heads the Yahoo!’s global search and marketplaces business and the efforts around Yahoo!’s (yet again) turn around. This comes at the face of the fact that key executives at Yahoo! are leaving in hordes. Seth re-emphasizes on focus on making great products, experiences and learn how to monetize them. The key according to Mr. Seth is redefining how search has traditionally been understood and breaking the old paradigm of search to focus on new growth engines. Yahoo!’s new growth mantra focuses on
• Creating a search engine for Apps
• Focusing on Mobile search
• Ability to search through integrated user linked information across Flickr, Picassa, e-mail accounts, tweets, FB updates

With due respect to Mr. Seth, the plan sounds nice (as did every other Yahoo! turn around plan) but there are huge many gapping large holes in the scheme of things that Mr. Seth puts. Firstly, the mobility space is taken… Androids will push Google, WPs shall push Bing and Apple doesn’t care, because the whole app experience in terms of App look up and search is so well integrated in Apple that they won’t need Yahoo! to give them the solutions. That kind of rules out Points 1 and 2 listed above as the platforms will inevitably push their native search engines. The UX of Yahoo! search could also be a dampener. This applies to the two of the largest device platforms: Smartphones and Tablets.

Ability to search through integrated user linked information across user accounts is a great idea, but I suspect that the Google’s of the world are already doing it in some measure and are integrating things faster. What really enables Google and Bing is that they have a teams of developers working on their platforms using the native Google and Bing search apps. Yahoo seems to have realized the potential in mobile a little late for any real action coming through to them.

Yahoo seems to be serially missing out on another huge property that they have in terms of 12+ years of content. A content management system with optimization could bet Yahoo!’s answer … much like the Guardian example. However, I don’t think that it has the ability to turn Yahoo! around.

Is it there yet?(Afraid not)-Bing continues to be drain money for Microsoft even while results are not as desired

Posted in Internet and Search by Manas Ganguly on August 4, 2011

2 yrs back, Microsoft launched an aggressive attack on Google’s search with its Bing search engine. It also put in place, an agreement with Yahoo powering the Yahoo search at the backend. 2yrs on, Microsoft is still at it, loosing loads of monies to the tune of $700 million a quarter. The costs for Microsoft, meanwhile, keep mounting. In the latest fiscal year, ended in June, the online services division — mainly the search business — lost $2.56 billion. The unit’s revenue rose 15 percent, to $2.53 billion, but the losses still exceeded the revenue.

While there are some results in terms of 14% of search market share in US, it isn’t as encouraging as Microsoft would have wanted it to be. Add the searches that Microsoft handles for Yahoo, and Microsoft’s search technology fields 30 percent of the total. It was always going to be difficult- Google was more than a search, it was a generic- a search behavior! (Read Launch notes of Bing, Part I, Part II, Part III, Part IV)

Microsoft’s assault on Google in Internet search and search advertising may be the steepest competitive challenge in business today. It is certainly among the most costly. Trying to go head-to-head with Google costs Microsoft upward of $5 billion a year, industry executives and analysts estimate.

As the overwhelming search leader, Google has advantages that tend to reinforce one another. It has the most people typing in searches — billions a day — and that generates more data for Google’s algorithms to mine to improve its search results. All those users attract advertisers. And there is the huge behavioral advantage: “Google” is synonymous with search, the habitual choice. Once it starts, this cycle of prosperity snowballs — more users, more data, and more ad dollars. Economists call the phenomenon “network effects”; business executives just call it momentum.

Bing’s gains have not come at the expense of Google. Its two-thirds share of the market in the United States — Google claims an even higher share in many foreign markets — has remained unchanged in the last two years. The share losers have been Yahoo and smaller search players.

Even while Microsoft is a big, rich company, investors are growing restless at the cost of its search campaign. The inability to make effective inroads into Google’s Search stronghold is seen to be a failure in Ballmer’s strategy. While the gas tank of investments at Microsoft is an seemingly an endless pit, the lack of results (as desired) on the Bing search engine and the drain on investments is beginning to show up in terms of Investors, Analysts questioning the path, intent and approach. Challenging Google in real terms on search is a long drawn battle and it all depends on how long is Bing ready to bleed as against how quickly does Bing get measurable real results for investors to approve the spends.

Revisiting the Bing Strategy (Contd)

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