Efficiency is a business school idea that suggests a company is running smoothly. It’s absolutely terrific when you’re talking about a coal mining operation or a Supercuts. But when it comes to a company like Yahoo it’s not a positive. The Internet is still in its wild west days, and the “ready, fire, aim” game plan of Facebook and the other young guns is eating their lunch. Even the massive Google is still trying to shake things up with new and controversial products.
Yahoo’s strategy seems more like “ready, aim, aim, aim, aim…”
Yesterday Jordan Rohan at Thomas Weisel Partners described Yahoo in his first analyst report on the company. He thinks this is the right management team to bring more efficiency to Yahoo. But he spends most of his time talking about the negatives, and there’s no excitement around new products or ideas:
For the record, we happen to believe the current management team is the right one at this stage in Yahoo!’s corporate evolution. The team is bringing efficiency to a massively inefficient company. Yahoo! is weighed down today by dozens of code bases, thousands of revenue-producing properties, at least three sales force factions (display, search, ad network), and a few thousand “extra” employees needed to run the media company today due to its complicated legacy assets and far-flung acquisitions.
On the upside, he notes that a cyclical upswing in advertising is likely to help Yahoo.
Here are a few of the negatives:
More worrying are the metrics comparisons to Facebook. Rohan notes that total minutes spent by U.S. visitors to Facebook are set to surpass Yahoo. And the worldwide numbers are even worse. Facebook now has 160 million daily visitors and 227 billion monthly page views worldwide (Comscore), compared to 160 million and just 94 billion for Yahoo. Yahoo still has tons of daily visitors, but they are spending 12% less time on the site in aggregate compared to a year ago. In the same period Facebook has grown total page views by 217%.
Yahoo will continue to shrink as sites are sold off and shuttered, and CEO Carol Bartz works on those efficiency gains. But this is no longer even close to an exciting company that thrives on chaotic creativity. Yahoo’s foundation is rotten. They have no plan to get back into the game. Or if they do have a plan, no one knows about it.
Sadly, the first site many of us ever visited on the Internet is turning into little more than a business school study in financial engineering. It deserved a better fate.
Yahoo was founded in 1994 by Stanford Ph.D. students David Filo and Jerry Yang. It has since evolved into a major internet brand with search, content verticals, and other web services. Yahoo! Inc. (Yahoo!), incorporated in 1995, is a global Internet brand. To users, the Company provides owned and operated online properties and services (Yahoo! Properties, Offerings, or Owned and Operated sites). Yahoo! also extends its marketing platform and access to Internet users beyond Yahoo! Properties through its distribution network...