How Can Yahoo Be Saved?
Marissa Mayer was re-hired, but this time as CEO. She was one of the original members of Yahoo and has been brought back to give Yahoo a more focused direction.
Once the primary Internet search engine, Yahoo has yielded significant market share to Google – market share price in 2000 was $118.75 and is now around $16. Interestingly enough, Yahoo enhanced its service through acquisition. For example, they acquired Flickr, which was once the predominant photo site. Flickr has since been replaced by many mobile applications like Instagram.
Advertising is slumping as well – down 50% since 2009.
To combat this slide, the company has churned its CEO position four times in four years.
Ultimately the question is, what can be done to save Yahoo at this time:
- Refocus Its Purpose – according to analysts, Yahoo has to decide what it is and then focus on that vision. While they have successfully acquired a number of functions including mail, IM, groups, voice, finance, shopping and the search engine, it isn’t clear what its direction is – no unifying thread. Based on the new CEO selection (over potential inside), it is generally felt that product/service development over content will make Yahoo successful; (p5c5)
- Product/Service Portfolio Assessment – once it has redefined it purpose, it should eliminate the products/services that detract from that purpose. This will allow them to spend the time they need to build in the areas that contribute the greatest value; (p5c5)
- Market of New Vision – ultimately this new vision needs to be communicated to prospective and current customers. This new vision should incorporate some of the new market changes, like mobile web; (p3c5)
- Innovation – another analyst believes that innovation is key. (p2c5)
- Personnel Enhancement – in order to support innovation, Yahoo needs to bring in fresh talent. (p4c5)
The other part of the article presented different opinions on whether or not the new CEO will be successful. Ultimately, they all agreed that the new CEO needs to be strong in Yahoo’s weakest areas. Unfortunately, they couldn’t agree on what those areas were.
The big issue with Yahoo, with four new CEOs over the past four years, is inconsistent direction and management. When senior management changes so often it is impossible to accomplish anything strategic - other than keeping the lights on. In fact, we are certain that a lot of good personnel have left and that Yahoo needs to revamp its internal resources before it can move forward.
The biggest challenge is convincing both internal resources and customers that the new CEO is here to stay and that whatever direction she takes will be constant over the next few years. Her challenge is as much cultural as market driven. She needs to change the culture by solidifying the organizational structure, the drivers and objectives.
Call To Action
This news item is a reminder that the organizational health of a strategic partner is critical. With the movement of enterprises towards cloud-based services, IT executives that have invested some of their resources in Yahoo have not received the value that other strategic partners have been able to deliver.
Hopefully, this new CEO will be able to turn things around. Realistically, the impact of any turnaround may not be evident for six months to one year.
How Can Yahoo Be Saved?