Yahoo Has No Easy Options For Making Consumers Interested Again
For Yahoo, firing Carol Bartz was easy--Chairman Roy Bostock gave her the news over the phone--but turning the company around under new leadership will be a lot harder.
Yahoo fired Bartz on Tuesday evening, two and a half years after she took the CEO spot from co-founder Jerry Yang. Bartz was brought in to pull Yahoo out of a nosedive, but a series of missteps left the board unhappy with her performance.
Today, Yahoo is a company with no clear identity, no flagship product and no hot prospects--at least from a consumer perspective. So turning the company around looks just as daunting, if not more so, than it did when Bartz took over. Here's a breakdown:
Although search made Yahoo famous, it's no longer the company's main focus, with Microsoft's Bing now powering the back-end of Yahoo.com searches. Whether the deal brings in lots of revenue is beside the point; with the success of Yahoo search tied to Microsoft, Yahoo essentially gave up on being a true competitor to Google.
Ceding the back end of search to Microsoft was supposed to free up Yahoo to focus on content, with Yahoo Sports, Yahoo Finance, and Yahoo News. But, in recent years, Yahoo's been outdone by AOL, which gobbled up the Huffington Post and by TechCrunch. Yahoo's content sites remain popular, but the company hasn't made any other big moves in the last several years to become a content powerhouse. Its only notable editorial acquisition, Associated Content, has been targeted by Google in the search engine's purge of content farms.
Yahoo's adventures in Web services have also taken a rough turn. Flickr's head of product stepped down earlier this year, following a wave of layoffs. YouTube's founders purchased Delicious after Yahoo said it no longer had use for the Web bookmarking service. Yahoo also axed a few of its own ventures: Yahoo Buzz, Yahoo Bookmarks, and Yahoo Picks. The company hasn't acquired any other hot Web services to fill the void. Yahoo Mail remains popular, but when was the last time anyone got really excited about email?
Yahoo hasn't been a big player in Web video, but the company has reportedly taken an interest in buying Hulu. For Yahoo, Hulu would be a foot in the door in a fast-growing business, but the site isn't a big money maker, and it relies entirely on the whims of content owners, who are nervous about the possibility of online television replacing cable. Besides, with Amazon, the Dish Network, and Google also reportedly interested in Hulu, there's no guarantee that Yahoo would have the winning bid.
So, more than anything, Yahoo needs a clear vision of what kind of company it wants to be, because a mish-mash of old and decaying products won't cut it. Consumers now have a wealth of more-focused companies and services to choose from, including self-generated content behemoths like Facebook and Google+. Whoever succeeds Carol Bartz faces an unenviable task.