Can Mayer create a new beginning at Yahoo?

Posted on 25. Jul, 2012 by in Digital Marketing

As the dust settles on Marissa Mayer’s move to Yahoo there has already been significant speculation on what needs to happen to turn the company’s fortunes around.

Has Merissa got what it takes to turn Yahoo around?

It is difficult not to see Yahoo as a media company on the brink of irrelevance and yet they also attract in the region of 700 million users a month. Once both a leading search engine and one of the most important display advertising networks Yahoo used to be known for a degree of technological innovation that now seems to fall outside of their grasp.

Mayer has been credited with achieving a lot at Google, including maintaining their clean and simple user interface. A hire from a company to close to Yahoo’s own offering is likely to be a smart move, particularly if Mayer can help them narrow their focus once more. If Mayer is to succeed in turning Yahoo around she will need to address three main areas:

1. The Consumer:

This means focus in of itself – what does Yahoo mean and why do they exist? This isn’t something Google have ever grappled with but for Yahoo is rapidly becoming the elephant in the room. It’s time to stop chasing dreams of being a media company and instead embrace their dual technology / media nature. Yahoo’s content capabilities could be their main advantage against Google but more often than not they feel like a weight around the company’s neck. The old Yahoo that would acquire companies like Flickr and and let them fester needs to go – products need to be embraced within a cohesive eco-system in the same way Google is attempting (though perhaps not achieving) with Google+. This could come from partnerships, particularly if they managed to create a tie in with Facebook.

2. Technology:

Yahoo used to innovate in a way they haven’t for years. Without a clear consumer proposition technology is meaningless but there is a massive requirement for something new to come out of Yahoo. The company’s advanced media tracking solutions that incorporated offline sales data four years ago was a good example of this, their big data audience buying solution Genome could also point to a future. Whatever it is, it probably isn’t search though – even if Yahoo ditch the Search Alliance with Microsoft it seems unlikely that search buyers want another platform to buy through.

3. Service:

Compared to the majority of their competitors Yahoo are less proactive in the way they engage with the marketplace. Media is still a very relationship-centric business and if Yahoo want to continue to remain a significant player in the post-real time display world they will need to place more of a focus on people and service. The more hands-off approach they have used in the past may still work for Google and Facebook, who benefit from a maintaining a presence that grants them a default position on many plans, but this is no longer the case for Yahoo (especially outside of the US). If the offering is going to evolve then partnerships and collaboration will be more important than ever.

We are in a period where a number of the organisations that seemed infallible during the early days of the web seem to unable to innovate in the ways they used to. Yahoo seems almost too big to fail and yet they have just been through a period of high-profile product closures and redundancies. Microsoft dominated the PC space for years only to wake up one day and discover the world has started to move on. Vanity Fair’s piece on their ‘Lost Decade’ is a good overview of the challenges Microsoft faced and the mistakes they made but the fact is that they are hardly alone.

Yahoo and AOL have faced very similar challenges, albeit more media orientated ones. The three companies all seem to be struggling to recapture their verve and the common theme seems to be companies that bet the farm on one world view at a point when they were entering maturity. Smaller, nimble start-ups can shift rapidly, pivoting into a new business model should their old one be exposed to a paradigm shift – Turn’s transition from a more conventional network to one of the market’s leading Demand Side Platformsfor example. Yet there aren’t many established technology players that have managed to maintain this dynamism. Even Google feel like a significantly less innovative company than they were ten years ago, with an increased on focus acquisitions and ‘me too’ products like Google+ at the expense of real innovations such as Google Wave – a product with revolutionary potential that Google just couldn’t get to stick.

The one exception to this floundering middle-age problem of course is Apple. Steve Jobs managed to transform the organisation when he returned in 1996 and was subsequently named interim CEO the following year. Jobs was able to rapidly implementing change in a way few established business can or do. We are yet to see whether Mayer can bring the same radicalism to Yahoo but the appetite from those in the technology and media sectors for a serious competitor to Google seems greater than ever.

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