By Jim McCarthy Jul 17, 2012 0 comments

The Problem with Yahoo…

If you were old enough to be using the web in the late 90’s, you’ve probably got a soft spot in your heart for Yahoo that the last, oh, ten years can’t justify.  I know I do.  Yahoo was a truly great internet property; the first and only real www-based portal, the place where you could go to find everything  and do everything.  They had great usability, a great brand, a great business model, and people liked them.  Some of the products were so good, they’re still dominant or at least powerful, like Yahoo Mail, Yahoo Sports, Yahoo Finance, and Yahoo IM.

And having been in a company that was acquired by Yahoo (GeoCities in 1999), I got to see some of it from the inside.  They had great talent, a great esprit de corps and enthusiasm internally for their brand, and a lot of systems, processes and norms in place for maintaining their tremendous lead.

But that lead was premised on the idea that the world needed a “portal,” a place you could make your home base for the web, a place that did everything well enough and tied it all together in a way that made the whole greater than the sum of the parts.  But Google changed that.  Not only did Google take away Yahoo’s lead in search (and for those of you under the age of about 28, Yahoo used to dominate search traffic), but it demolished the idea that the world needed a ‘portal’ at all.  This wasn’t all Google’s doing of course.  This is just the way the world went.  For web users and a new generation who grew up with the web, the training wheels were increasingly unnecessary.

And ever since then, at every changing of the CEO, I’ve said the same (perhaps annoying) thing: it’s not a question of who’s the CEO of Yahoo. It’s a question of why Yahoo should exist.

This is a hard question, and I don’t mean it flippantly.  Remember Pontiac, the line of cars GM had for nearly a century?  A couple years ago, GM shut it down because, in the end, no one knew why Pontiac should exist.  Why should I buy a Pontiac?  Ultimately, the fact that no one knew meant that it was only a matter of time before it went away.

Kara Swisher wrote a piece today about the “Ten Questions” she has for Marissa Mayer, the well-known and highly-regarded Google exec who just became Yahoo’s new CEO.  On question #8, she gets to this:  “Defining Yahoo’s purpose and relevance in this much-changed world it now lives in is perhaps Job #1, and it is a definition that has flummoxed past leaders.”

No, that’s not Job 1; that’s Job Only, because all the rest of the issues (staffing, handling the Yahoo board, how much of a techie Mayer really is) only matter if that question is answered.

Yahoo’s problem is not a talent problem; it’s not a technology problem.  It’s a marketing problem.  And that marketing problem is that no one knows why they should buy the Pontiac that is Yahoo.  Instead of creating a good reason for users to want to use Yahoo, the last several CEOs have trotted out “strategies” more intended to please Wall Street and sound deep than make the simple, direct connection to users’ brains that a company needs to make to be successful.

To ask if Mayer is legit enough as a techie is insulting to her and beside the point.  You could put Mr. Spock in charge of Yahoo and it wouldn’t make any difference if there’s no single compelling reason that a consumer can understand and believe in that they should use Yahoo.

I don’t know Marissa Mayer, and I have no idea what she’s going to do.  By reputation, she’s supposed to be hellaciously smart and capable, and that’s good.  But a lack of smarts and capability haven’t been the problem either.  The problem is that no one has solved the issue of why we should still care about Yahoo.

So, Ms Mayer, my advice to you is ignore questions 1 through 7 and 9 and 10.  Focus on question 8.

It’s the only one that matters.

And one last thing: most of us are on your side, hoping Yahoo can make it.  Partly out of nostalgia, perhaps, but also because, and maybe this is something you can use, we still like Yahoo and would like to have it back.

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