What Happened to Yahoo

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Yahoo is an American web service provider founded by Jerry Yang and David Filo in January 1994. Yahoo was one of the pioneers of the early Internet era in the 1990s providing web search and related services. At its peak, Yahoo was one the most popular websites in the U.S. and reached a market cap of $125 billion. At some point the former king of the internet was worth more than Ford, Chrysler, and GM combined. In the late 2000s, the company slowly, but steadily declined.

There were several reasons for the fall of the web giant.

Reason #1 – Becoming too unfocused

Yahoo tried to do everything: web search, email, music, messenger, news, finance, social media, fantasy sports, online mapping, video sharing, advertising and so on. As Yahoo’s SVP Brad Garlinghouse wrote in his now famous memo, Yahoo was trying to “spread peanut butter across the myriad opportunities that continue to evolve in the online world.” Garlinghouse then continued: “…the result is a thin layer of investment spread across everything we do and thus we focus on nothing in particular.”

Reason #2 – The rise of the mobile and social world

Yahoo lost its chance to create their own fruitful mobile and social services or to purchase any. They lost Facebook purchase opportunity; they failed with Flickr (potentially next Facebook); they failed with Tumblr too; and they also couldn’t acquire Google. All these opportunities could get Yahoo to a new stage of the internet development: mobile and social world, but due to mismanagement, they couldn’t reach this point.

Reason #3 – Management failures

If you look through the list of the leaders of Yahoo, you’ll see quite a long list, whereas the giants as Google and Facebook have the same leadership in place the whole time. Yahoo’s shifting cast of CEOs and executive teams didn’t provide a long-term vision and didn’t show any significantly positive results. This shaky management pattern negatively affected on the work-force power. Accepting less qualified professionals for the hi-tech industry projects eventually led to the failure almost of all of the projects.

What one can learn from the case of Yahoo, is that to be successful stay focused, try to use your opportunities and lean to the consistency in leadership.

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