I write this as I’m listening to Greg Cohn from Yahoo (Nasdaq: YHOO) talk about their future vision for the corporation: “Yahoo is the social network” and the Yahoo! Open Strategy (aka Yahoo OS). Interesting talk, but I can’t help but thinking about the organizational challenges that they face…
More than anything it really strikes me that the company is so deeply organized into silos, departments and divisions that it’s possible that even were Yahoo to learn how to integrate things together and cross-promote it might never be successful at creating a single, unified company at this point in its history.
Greg explains on his blog that Yahoo OS is a cool way to open up parts of the Yahoo network to third parties, just as its Search Monkey is opening up search to third parties too, through plug-ins that affect search results. That’s a step in teh right direction, but maybe not: Given the company already has dozens upon dozens of properties, does it really need to open things up to hundreds of additional properties like Blogger, Facebook and Twitter?
The challenge is that Yahoo has become too diverse a company. I mean, here’s just a short list of some of the more popular properties under the Yahoo umbrella, as gleaned from the 2007 Annual Report:
- Flickr – photo sharing and management
- HotJobs – classified jobs site
- Geocities – entry-level user home pages and profiles
- del.icio.us – shared bookmark and online site discovery tool
- Musicmatch – music discovery and industry news
- Yahoo! Travel – fly to nice places, etc
- Yahoo Shopping – huge aggregation of Yahoo Store-based online shops
- Yahoo Personals – one of the top dating and personals sites
- Yahoo Finance – investor and research information
- Yahoo Maps – online mapping service
- Rivals.com – college sports team information
- Zimbra – business emial service
- Kelkoo – Yahoo Shopping for overseas
- Yahoo Mail – popular web-based email service
- Yahoo Messenger – one of the most popular instant messenger services
… and on and on. It’s staggering, really, and while you may think “Oh, Yahoo Mail and Yahoo Search are the same company”, they really are separate divisions, just as Gmail and Google Search are only loosely affiliated.
I am well aware that one of the greatest problems in a large company is that, well, it’s a large company. The logistical challenges of integrating a wide variety of quasi-unaffiliated departments is vast, and with constant acquisitions, it’s even worse. This can be solved by strong management from the top, a strong, coherent, single unified direction. What Scott McNealy of Sun Microsystems (Nasdaq: JAVA) famously and aptly described as “putting all your wood behind one arrowhead”.
One of the greatest problems I see with Yahoo is the recently ended tenure of Terry Semel, who did his very best to turn Yahoo, an Internet property, into Yahoo Hollywood, a new generation media company built around what I can only imagine was the inspiration of the org charts of companies like Warner Brothers and Paramount. Not good. Film companies have a small number of large bets and only need a few to be home runs, but a film company with hundreds, or thousands of tiny properties? No go.
Now that Terry’s out and Yahoo co-founder Jerry Yang is back running the company, and now that they’ve survived the Microsoft blitzkrieg and are trying to weather Carl Icahn’s newest attack, the question remains: can Yahoo consolidate, find a single vision to unify its widely diverse offerings, and become a strong competitor in an ever-changing marketplace?
We’ll have to wait and see.