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.
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.
1. The Consumer:
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.