Yahoo should invest in products, not advertising

For 10 years, Yahoo was my default home page. Now I can barely stand using the site. I still use it for Finance and Flickr, but that’s it. The new home page design has windows popping up everywhere and mind numbing celebrity gossip up top.

Now we learn Yahoo is going to spend $100 million on an advertising campaign. The slogan is “It’s Y!ou” which sounds like one of those meaningless taglines invented by PR firms. I’m quite sure no one will remember it and their money will be wasted (quick, name the tagline of any big tech company).

By CEO Carol Bartz’s own admission, Yahoo is incredibly well known, especially outside of techie circles:

When you get outside of New York City and Silicon Valley, everybody loves Yahoo…. We do great things for [users] and we’re excited about what we are.

Yes, Yahoo has one of the best brands on the web. Which is precisely why they shouldn’t be spending $100M on branding. That’s the last thing Yahoo needs. What they need are new technologies, new revenue streams, and new products that people love. If they can’t build those things themselves, then they should acquire them. They’re coasting on inertia right now. As we saw with AOL and countless other tech companies before them, that inertia will be lost if they fail to innovate.

I think the Yahoo-Bing search deal is a great thing for startups as it potentially makes search competitive again. But as a longtime Yahoo user it makes me kind of sad. Between the branding campaign and the search deal, it feels like Yahoo has thrown in the towel.

http://omgponi.es Peter Clark

What yahoo needs is a product guy.

They've all now left [Flickr founders, Delicious founders, etc] so they've got tons of probably great engineers running around like headless chickens.

Yahoo should acquire ten or so pre-series A startups and get visionaries on board again.

I doubt their CEO uses Yahoo products, gets the consumer web – but I'm sure she's great at impressing shareholders. How to kill Yahoo 101.

http://20bits.com Jesse Farmer

That's really unfair to the engineers inside Yahoo!.

http://omgponi.es Peter Clark

Not really. Engineers aren't expected to be great at product management, and visa versa.

Yahoo is showing a lack of consumer web awareness more and more. Don't believe me? Have you seen delicious recently?

Yahoo needs a ballsy web CEO that'll sit down and tell Yahoo what it's vision is. It should be big and bold and what people want.

Yahoo already has the thing every web company craves: traffic. Now capitalize on that.

http://shanacarp.com/essays ShanaC

I'm actually not totally upset by the Delicious makeover. Granted, this is partially due to the fact that I don't use Delicious currently with friends. I like the fact that I can sort through tags by size, and not see all my bookmarks at once. And now I can tell you my favorite category is “howto” I'm not a power user, just your everyday webzien, and I'm really happy.

it seems to me the reason I stay away from Yahoo and the Yahoo homepage (unlike Google) is that the products are uneven, and further, they don't cohesively come together to tell a story. Google is very cohesive with its stuff.

I've heard Yahoo Pipes! is amazing, I can't figure out what to do with it. What's it's story? What does it have to do with the rest of Yahoo? And what is BOSS and Blueprint? Why should I use them, and what's their relationship to the homepage? Flickr and Delicious seem to exist in separate universes to me. And to the homepage, for that matter. (I barely notice that they are Yahoo)

So what would make a good Yahoo, a cohesive Yahoo. I don't think the new homepage helps, because it doesn't ID what Yahoo does for consumers at all. Please tell me so your users (who are like me) will use your products.

GRRR. Bad sitewise UI.

http://omgponi.es Peter Clark

Great analysis. “Tell me what you do” is 101 for startup marketing isn't it?

Delicious is one of my all time favourite sites, its super handy. But i don't think I've seen any innovation in it for years. I assumed yahoo would integrate it with search in some capacity, I still think delicious was the webs' one shot at a “human search engine”.

Yahoo is somewhere in between Google [=tons of stuff linked and cohesive] and IAC [=tons of individual separate products/companies] – sucks to be them.
I always liked Yahoos mission statement of “the place people go to find out whats happening in the world”, actually inspired my current startup to do that better. Thanks for the fish Y!

http://shanacarp.com/essays ShanaC

Yup, A while back I wrote a blog post about Google adheres to a design principle on pretty much most of their products, especially their most prominently used ones, involving their search box. it makes it really obvious who it belongs to, and how their products extend. They also tend to interlink their products in such a way that it is clear that it is part of the Googleplex, and it is meant to be used within the Googlesphere. That UI choice made them as a company very strong. You know it is Google immediately upon arrival to anything Google.

That's all nice and good. Yahoo is not Google, nor does it need to be Google. (Microsoft is smart, for example, right now, for being all about the search engine as a non-search engine. I don't use it to search, I do use it when I want to do something.)
Yahoo need to find a deep purpose in it's stuff, and build off that. It has a lot of amazing things going on for it. A lot of what I can tell they ar doing for their best products are products that allow people to do and to create.

If we were to crowdsource this question- what would be the best way to introduce Yahoo as a place of doing your average internet things. I'm only in partial bleh with the homepage. It's not super customizable (then again, I've never been the homepage type, and I wish I had measurements about how many people had actual homepages)

jeffreymcmanus

> Yahoo should acquire ten or so pre-series A startups and get visionaries on board again.

They tried that over the past five years. It didn't work (and not because the product visionaries or engineers weren't great — they weren't permitted to succeed).

http://twitter.com/howardlindzon howardlindzon

Truly pathetic that they can't take their sick flagships like Sports and Finance and just get better while figuring our web video with all that traffic.

For signing off on $100 million the board should fire her yesterday. Infuriating.
http://www.cdixon.org chris dixon

disclosure: i own 10 shares of yahoo stock which were given to me as a present from a friend 10 years ago and I haven't sold them because I'm lazy.

http://shanacarp.com/essays ShanaC

http://twitter.com/L1AD LIAD

Yahoo is stale – pure and simple.
Its a behemoth of times gone and is experiencing death by a thousand cuts.

No amount of marketing/re-branding will save them – I'm not even sure a product drive or ingenious innovation will either.

http://www.cdixon.org chris dixon

Maybe the right acquisition could. What if they had bought Facebook back when FB wanted $1B or some other up and comer. The one thing we know is the web changes quickly and there are always opportunities. But I have lost all confidence that the current CEO sees the world this way.

ps. I'm sure she would tell me to shut the f**k up if she read this blog. That's the one thing I like about her.

http://twitter.com/L1AD LIAD

Excluding the time and investment spent on the technology, MSFT stated they were spending $100m on launching BING.

In its first few months it seems to be gaining traction and actually becoming relevant in the world of search. How things pan-out in the medium/long-term is a different matter, but it does show that product innovation and a $100m to shout about it with can bear fruit even if the parent organisation itself is fighting for ongoing relevancy.

Having said that…. I still think Yahoo is stale and will need more than a couple of singles and doubles and an expensive PR re-brand to attain anything near its former glory

http://www.cdixon.org chris dixon

Good points. MSFT first invested a lot in building a solid product. They bought Farecast, Powerset (and probably others I'm forgetting) and presumably spent a ton on internal R&D. Then they went out with a targeted, strategic ad campaign.

Very different than moving a few things around on your home page and blowing money promoting a meaningless tagline.

http://twitter.com/timraleigh timraleigh

They need to get rid of stuff. If they had bought Facebook I think they would have ended up like all the other sites they bought, stalled in a slow and ponderous cycle of mediocrity weighed under by the obligations of the bureaucracy that Yahoo has become.

http://www.cdixon.org chris dixon

They certainly need to get rid of some stuff. Zimbra was a head scratcher from the start (great company, just not a good fit for Yahoo). But probably the fastest way to build their product skills back is to acquire some relevant companies and then try to fix the bureacratic stuff that seems to make them mediocre.

http://twitter.com/timraleigh timraleigh

I think that's like buying your new house before you sell your old house. However they have the means and their position (circumstances) as a public company etc. dictates that this a much more “palatable” strategy than cleaning house first. I am still not convinced that they have a clear understanding of where they want to go and what they want to be and are moving forward on momentum rather than purpose.

http://www.comradity.com K. Warman Kern

I've posted that Yahoo! recent moves seem to be motivated to make investors happy rather than consumers. The stock plummeted in July when the Bing deal was announced.

Apparently, investors are thrilled. The stock went up enough to drive Nasdaq up. Don't know if it held though.

Katherine Warman Kern
@comradity

http://www.cdixon.org chris dixon

maybe they should spend their ad dollars in barrons, forbes etc
http://shanacarp.com/essays ShanaC

I'm not so sure Yahoo should be about search. The best stuff they've always had going for them were never about search. What benefit for them would be to keep search in house unless to keep things *wink wink* *nod nod* about their own pages being top when it comes to say, searching a stock?

http://loo.me pescatello

It's so true. It's always about the product. If you have a great product, then spending on marketing to tell people about it makes sense. If you have a crappy product then spending marketing dollars is a band-aid. It's always about the product. Technology and user experience are what drives the consumer tech industry.

I recently heard an interview of Larry Page and he was saying how important it was for them to get a CEO who had a Computer Science degree. For them it was about getting someone who understood at a fundamental level what they were doing with their products. Everything else would fall into place.

It's all about the product

http://www.cdixon.org chris dixon

And similarly, Yahoo should have found a CEO with deep consumer internet expertise.

http://twitter.com/cselland Chris Selland

Couldn't agree more – great post. But I disagree with the comments that they need to do yet more acquisitions. There's plenty of opportunity to fix and update the products they've already got. Unfortunately, these wasted marketing $ won't be available for the purpose.

Glad I sold my $YHOO a few months back. This is just sad.

SlowMo

You actually should have bought more shares, not sell them. A few month's back the share price was in the 14-15's and today it's at 17.35. You could have made more by selling them today!

http://bit.ly/19kduZ Greg4

Seems like most big tech companies succumb to this. The first counterexample is of course Apple. Maybe Amazon too? From what little I've heard, Yahoo at some point chose monetization over creating value for customers. Once you do that, it seems like an invisible ripple goes out through the organization. There's usually no going back after that.

I wonder if Google's heading slowly down that same path. You could certainly make an argument for it. They haven't experienced enough investor pressure yet to get to that decisive moment where you have to prioritize customers or that quarter's earnings, but I think it's coming. What do you think, five years until they launch the “Go with Google!” tagline? We should start a pool.

http://www.cdixon.org chris dixon

No doubt. It's the circle of life. The daddy lion dies so that little flowers can grow…

http://shanacarp.com/essays ShanaC

Do you think it is possible to have the life-death-rebirth cycle come from within? Or are all large companies eventually collapse under their own weight- as the new catches up and innovates around them.

http://www.cdixon.org chris dixon

History seems to suggest you can only defy the inevitable decline when there is a genius leader (Apple with Jobs, Microsoft when Gates was there, Amazon with Bezos).

http://shanacarp.com/essays ShanaC

Genius is not unique to a start of a company. You could be the type to bring it back, or develop it from within. We're human and frail. Meanwhile, companies have the ability to be closer in our minds to everlasting. How do you nurture future genius leadership inside a company to prevent a downfall? It seems to be a major issue hurting a lot of companies across a variety of fields, not just tech.

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http://www.oyster.com/about/leadership/ Elie Seidman

Writing the advertising check is far easier, and scales far better, than writing the innovation check. That's good news for entrepreneurs like us. I'm not seeing a lot of signs that Bartz is innovative.
iam that

I think Yahoo Mail tells the story. Gmail pretty much taken over as the mail of choice including IMAP / POP access. I have been heavy user of Yahoo Mail for 10-12 years. Within last few years, pretty much migrated to Gmail. I totally agree they should spending the $$ on innovation and new products; as well improving and making the current products competitive.

They have clearly WRONG CEO with BIG MOUTH and very small brain.

http://20bits.com Jesse Farmer

Yahoo! Mail is still way larger than Gmail.

Did you know Yahoo! IM has more monthly active users than Facebook?

Yahoo! has tons of assets, it just doesn't know how to make use of them.
SloMo

Yahoo mail is killing Gmail. Gmail is a distant #3.

“in February, Yahoo! held 56.46% market share of US visits among Email Services websites. MSN's Windows Live Mail was #2 with 19.14% and Gmail was #3 with 10.82%”

http://weblogs.hitwise.com/us-heather-hopkins/2…

http://www.thinkstorm.com Thorsten Claus

Maybe it's an advertisement campaign for their new products – something they'll spend $1B on, along with the $100m for the ads. Or maybe just too few people know about all their cool products… I don't. Oh, flickr, right? Who (in the general public besides us geeks) knows that flickr is a Yahoo product? So what was that about Yahoo's brand again?
http://portal.eqentia.com William Mougayar

Yahoo has some great products & technologies (e.g. Yahoo BOSS, Pipes, Blueprint), but they definitely can't productize or commercialize them to scale. Look at this lame page which is supposed to be Yahoo A-Z: http://everything.yahoo.com.
They remind me of the old HP adage “if HP sold Sushi, they would market it as dead-cold fish”.
Yahoo's UI is definitely due for an overhaul, as it's standing in the way of increased user attention.
That said, if the ad campaign were to expose some of their better products that have potential to grow with greater awareness, then I do see the value.
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http://www.byeloo.org/ invisible scanner

we want gerry back!carol is not good for CEO!
SlowMo

“What they need are new technologies, new revenue streams, and new products that people love.”

Try researching….
New Yahoo! Homepage
Yahoo! Mobile
Yahoo! Web Analytics
Yahoo! Boss
Yahoo! Connected TV
Yahoo! Apt
Try the new apps in Yahoo! email
etc.

The new technologies are there. People just need to realize that Yahoo has these new technologies. Hence the need for lots of Yahoo advertising and marketing.
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http://twitter.com/timraleigh timraleigh

I think that's like buying your new house before you sell your old house. However they have the means and their position (circumstances) as a public company etc. dictates that this a much more “palatable” strategy than cleaning house first. I am still not convinced that they have a clear understanding of where they want to go and what they want to be and are moving forward on momentum rather than purpose.
SlowMo

“What they need are new technologies, new revenue streams, and new products that people love.”

Try researching….
New Yahoo! Homepage
Yahoo! Mobile
Yahoo! Web Analytics
Yahoo! Boss
Yahoo! Connected TV
Yahoo! Apt
Try the new apps in Yahoo! email
etc.

The new technologies are there. People just need to realize that Yahoo has these new technologies. Hence the need for lots of Yahoo advertising and marketing.
SlowMo

You actually should have bought more shares, not sell them. A few month's back the share price was in the 14-15's and today it's at 17.35. You could have made more by selling them today!
SloMo

Yahoo mail is killing Gmail. Gmail is a distant #3.

“in February, Yahoo! held 56.46% market share of US visits among Email Services websites. MSN's Windows Live Mail was #2 with 19.14% and Gmail was #3 with 10.82%”

http://weblogs.hitwise.com/us-heather-hopkins/2…

Chris Dixon