"I didn't realize the answer till later, after I went to work at Yahoo. It was neither of my guesses. The reason Yahoo didn't care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it. If they merely extracted the actual value, they'd have made less."
The problem with customers that are overpaying is that they eventually come to realize it and stop (over) paying.
Yahoo Japan has always provided a nice comparison to Yahoo itself.
While Yang and co. stood by while Google became everyone's homepage in the US, Yahoo Japan remained the #1 portal in Japan by moving aggressively and continually making the site more useful to their members -- auctions, banking, broadband, personals, etc. All that while at the same time strengthening the brand with the naming rights, universal billboards and of course the sign up girls.
It's so interesting to me how you can get these large companies that stay around even though they don't innovate. I mean, I don't explicitly use yahoo services for nearly anything. I occasionally look at flickr photos these days (other people's not mine). I occasionally go to a yahoo group I joined 4-5 years ago. Once a year I do a march madness bracket there. But that's it. There's nothing compelling there for me. (I use yahoo messenger along with 3 or 4 other backends via adium, but it's not my preferred backend... I use it because I know people who prefer it.)
What's amazing is that while clearly Yahoo isn't innovating, and clearly they're having trouble, there's still (apparently) enough people that go there on a regular basis that they are generating _some_ kind of revenue. That to me is amazing: when a company gets big enough it can become a sort of "perpetual motion" machine that keeps chugging in revenue even when it's not "successful" by any normal sense of the word.
You do not have to innovate to be successful. The overwhelming majority of profitable businesses out there have never innovated and never will. All you have to do is provide value.
In fact, the majority of innovative businesses fail and fail miserably. You still have to translate innovation to value. That's really hard.
As the article points out, Yahoo's problems began long before her tenure and Bartz's primary experience was running a company which was a market leader and was committed to making hard choices in a timely manner [Autodesk]. Nothing could be further from Yahoo's status at the time she took over - Yahoo has not been the leader in their segment for at least the better part of a decade. They are essentially the AOL of the internet - a service targeted at the less sophisticated intern users or those willing to go with their ISP's default in the case of ATT.
There's no fixing it because there is no love for the brand. People have Yahoo email addresses for the same reason they have Hotmail - they got their free email account before Gmail was available and it is too much trouble to change it.
Bartz's hiring was a classic case of drafting a CEO based on who is available rather than fit - there was virtually no overlap between Autodesk's business model and operations and Yahoo's. Hopefully, she will find a much better circumstance in her next role.
easy to say that in hindsight - IBM hired Lou Gerstner when it was at the brink of sinking and his previous experience did not have much overlap on what IBM did - he still managed to turn things around
Carol Bartz was fired because the MSFT deal for ads has not performed well at all and anyone who had used both platforms before the unification of Yahoo Ads and MS AdCenter would know that AdCenter has always been considerably worse in almost every respect.
AdCenter has always had the problem of MSFT makes it hard to spend your budget to buy any real quantity of traffic. Yahoo was much better at making it easy for you to setup ads, run them, and get traffic. AdCenter sucks at all of that. It is literally years behind of what Yahoo had which was still years behind AdWords.
Even worse, AdWords, even with it's quality score policies designed to drive up the price of ads, makes it so much easier to setup ads and get traffic that there is no way AdCenter can compete.
The secret sauce in online ads is simple - "make it easy for me to spend money to buy traffic". Google nails that every time. Yahoo was pretty good. Microsoft sucks at it.
So, long story short, AdWords is so far ahead of AdCenter that there is no way for Microsoft to catch up. Carol Bartz and Yahoo hitched their horse to the Microsoft AdCenter wagon and that cost Carol Bartz her job.
If it don't make dollars, it don't make sense. Microsoft AdCenter doesn't make much of either for Yahoo.
Yahoo was always a technology company trying to be a media company, when being a media company is no longer respectable. At a time when there is so much opportunity, why isn't Yahoo even wading into mobile or social?
A CEO's job isn't only to focus on core competencies if the core business is losing lustre. A CEO's job is to look for new markets, and build up the competencies.
Yahoo does own Flickr and Delicious, two very active modern "user behaviour" sites. So it's not that they didn't have any such data, they apparently just chose to ignore it.
[+] [-] gvb|14 years ago|reply
"I didn't realize the answer till later, after I went to work at Yahoo. It was neither of my guesses. The reason Yahoo didn't care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it. If they merely extracted the actual value, they'd have made less."
The problem with customers that are overpaying is that they eventually come to realize it and stop (over) paying.
[+] [-] pyre|14 years ago|reply
[+] [-] Steko|14 years ago|reply
While Yang and co. stood by while Google became everyone's homepage in the US, Yahoo Japan remained the #1 portal in Japan by moving aggressively and continually making the site more useful to their members -- auctions, banking, broadband, personals, etc. All that while at the same time strengthening the brand with the naming rights, universal billboards and of course the sign up girls.
[+] [-] phuff|14 years ago|reply
What's amazing is that while clearly Yahoo isn't innovating, and clearly they're having trouble, there's still (apparently) enough people that go there on a regular basis that they are generating _some_ kind of revenue. That to me is amazing: when a company gets big enough it can become a sort of "perpetual motion" machine that keeps chugging in revenue even when it's not "successful" by any normal sense of the word.
[+] [-] maratd|14 years ago|reply
In fact, the majority of innovative businesses fail and fail miserably. You still have to translate innovation to value. That's really hard.
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] chollida1|14 years ago|reply
[deleted]
[+] [-] brudgers|14 years ago|reply
There's no fixing it because there is no love for the brand. People have Yahoo email addresses for the same reason they have Hotmail - they got their free email account before Gmail was available and it is too much trouble to change it.
Bartz's hiring was a classic case of drafting a CEO based on who is available rather than fit - there was virtually no overlap between Autodesk's business model and operations and Yahoo's. Hopefully, she will find a much better circumstance in her next role.
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] bgurupra|14 years ago|reply
[+] [-] programminggeek|14 years ago|reply
AdCenter has always had the problem of MSFT makes it hard to spend your budget to buy any real quantity of traffic. Yahoo was much better at making it easy for you to setup ads, run them, and get traffic. AdCenter sucks at all of that. It is literally years behind of what Yahoo had which was still years behind AdWords.
Even worse, AdWords, even with it's quality score policies designed to drive up the price of ads, makes it so much easier to setup ads and get traffic that there is no way AdCenter can compete.
The secret sauce in online ads is simple - "make it easy for me to spend money to buy traffic". Google nails that every time. Yahoo was pretty good. Microsoft sucks at it.
So, long story short, AdWords is so far ahead of AdCenter that there is no way for Microsoft to catch up. Carol Bartz and Yahoo hitched their horse to the Microsoft AdCenter wagon and that cost Carol Bartz her job.
If it don't make dollars, it don't make sense. Microsoft AdCenter doesn't make much of either for Yahoo.
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] 0x12|14 years ago|reply
[+] [-] enculette|14 years ago|reply
http://images.businessweek.com/ss/08/07/0731_women_in_tech/i...
[+] [-] enculette|14 years ago|reply
[+] [-] teyc|14 years ago|reply
A CEO's job isn't only to focus on core competencies if the core business is losing lustre. A CEO's job is to look for new markets, and build up the competencies.
[+] [-] robfig|14 years ago|reply
Maybe it was a roundabout reference to ad targeting?
[+] [-] chugger|14 years ago|reply
The last thing Yahoo needs right now is an "experienced" executive from another company.
[+] [-] lachlanj|14 years ago|reply
[+] [-] revorad|14 years ago|reply
[+] [-] 0x12|14 years ago|reply
http://latimesblogs.latimes.com/technology/2011/04/bookmark-...
Yahoo no longer owns delicious.
[+] [-] enculette|14 years ago|reply