Just finished a Wired piece by Fred Vogelstein on how Yahoo fell behind Google. There's more detail in the tell but in a nutshell it boils down to a comment Joel Spolsky had made on his Venture Voice podcast: non-technical managers and CEOs are the doom of technology companies. Or, in the closing paragraph of Vogelstein's article:
"At Yahoo, the marketers rule, and at Google the engineers rule. And for that,
Yahoo is finally paying the price."

It's a good morality tale and definitely one I see as true in the world around me. Especially as many non-technical people launch "Web 2.0" companies, I wonder how often it will be replayed for those of us with a different, more technical perspective.

But I'm not convinced that Yahoo is out for the count. There are a few things that I think they get right and with a change in approach can really capitalize on:

1. Mail - Yahoo makes my favorite web based mail client. I use the "beta" version of their mail software which was written by the folks from Oddpost. I wonder if they'd turn these guys loose to write some other cool software, like a killer RSS Reader to make Netvibes eat its heart out.

2. Curators - The craze at the moment is over user generated content but a model that I think will still remain profitable is that of having curated content; hiring someone who knows what they are doing to pick out what's interesting for others in a particular domain. Why can't Yahoo take what is done so well on Yahoo Picks and extend that to more specific content? Not overblown CNN style content heaviness, just a small group of people that find a few interesting things and keep the site sparse. What's ironic is that as "user generated" content seems to overtake the web, there is more need for people who can pre-parse it to find what's more special.

3. Developer APIs - One thing that made me happy about Yahoo's Developer Network was that it had to do with pushing out their philosophy and sharing what they standardize well. Their APIs are a bit bulky in my opinion at present, but there are some clever people over there who can really help developers be more productive.

4. Excellent content - Yahoo Movies, Yahoo TV to name a few. I keep going back because they are that useful.

There are more things but I'm an outsider who is simply commenting on what he likes. Yahoo has a lot of smart technical people they don't seem to be listening to. Reading Jeremy Zawodny and Josh Woodward shortly after the release of Google Finance seemed to confirm this sad fact.

Because the one thing about the Wired post that bothered me was that Vogelstein kept going back to the leadership of Yahoo under Terry Semel where I see as big of a problem in Yahoo not being able to leverage its developers for ideas beyond how to implement specifications. Semel's ability to make deals and encourage integration are a part of this, but it seems like it occured at multiple levels of management, not just at the top.

One more thing I can think of helping Yahoo stay relevent in their battle against Google and other web companies: why not buy some of Paul Graham's companies (or other "built to sell" companies that seem like winners)? Forget revenue models, forget integrations - forget all that MBA stuff for a moment. Thinkature (Yahoo anounces Visio modeling mixed with Powerpoint presentability for the future), Snipshot (Yahoo delivers online photo editing and hosting for the masses), Jamglue (Yahoo presents technology to mix/remix and make ringtones)... there are a lot more than these to be sure, but just of the top of my head - represent some ideas that can get people excited. Not only that, the young founders are the types of people who won't stop thinking even after their technology enters a bigger and perhaps more orthodox arena. Money doesn't grow on trees but Yahoo has a lot of resources and a big market capitalization to work with - it only takes one good idea to make the whole thing worth it.

I don't think Yahoo is done by any means. I sincerely hope they have a second life, not necessarily as a victor in a war against Google, but more as a successful web company staying relevant and making people happy.



Hey, landed on your blog, nice stuff. I found a cool new tool for our blogs... www.widgetmate.com It helps get latest news for our keywords directly on to our blog. I added it on mine. Worked like a charm.
Good post. I also like to theorize why the big boys (and others) are "successfull".
On that note, I just read this last night: