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Punishing Yahoo! for not being Google

The headlines blare an age-old story, where the designated grown-up brought in to grow the high-flying young company has been sacked, replaced by the original founder. Can Jerry Yang restore Yahoo! to its glory days? It worked for Apple, but will Yahoo! be equally fortunate?


I think that question is flawed.
Yahoo! is actually a highly successful company that has one big problem—it’s not Google. I once thought that this was a problem only in the financial markets. I thought that Yahoo!’s management knew that it could be highly successful without beating Google at its own game. But when the CEO is forced out, that shows you that this is more than an image problem—it’s affecting the company’s strategy.
Now I am not smart enough to know whether Terry Semel was doing a good job or a bad job. But I do know that Yahoo! is a winning company with tremendous assets. And they’ve beaten Google in several important areas, with FlickR and Yahoo! Answers. And while they are a distant #2 in search, they have maintained that position when companies like Microsoft have seen their share eroded significantly. Yahoo! looks like an underachiever only when compared to Google.
Now that doesn’t mean that Yahoo! can’t make more of its assets than it does. I have always wondered why Yahoo! wasn’t the first to a deeper personalized search, but Microsoft beat it there in paid search and Google is quickly outstripping Yahoo! in organic search, as both competitors create search results that are customized based on what is known about the searcher. Because Yahoo! has a much deeper relationship with many of its searchers than its competitors do (because of its lead in mail and other Internet content properties), you’d think that it would have more personal information at its disposal and could do a better job in personalization.
And perhaps it will. Yahoo! is a strong company right now but it suffers from having even greater potential. Unfortunately, I am reminded of baseball manager Casey Stengel, who once remarked that “Potential means you ain’t done nothing yet.” Yahoo! has done a lot, but it suffers in comparison to Google. To me, we’d be better off evaluating Yahoo! on its own merits rather than as Google’s kid brother. There’s plenty of room to succeed on the Internet without being Google, and Google hasn’t shown a strong ability to move beyond search yet. No one should underestimate Google, but I think we are in a period where we are underestimating the value of what Yahoo! does well.
So often we cover these companies as though business is winner-take-all. It’s not. Certainly, anyone would rather be #1 than #2, but if the next CEO of Yahoo! accepts being #2 to Google in search (while still investing and improving there), while taking advantage of Yahoo!’s other competencies, we might all start to see that Yahoo! has a pretty nice business going. Maybe this is the perfect time for someone new to take the reigns because expectations have now been dampened. The conventional wisdom is that Yahoo! has failed because it’s not Google. Maybe now it can be the best Yahoo! it can be.
Before I let you go, please don’t forget to enter the contest to win a free pass to the Internet Strategy Forum Executive Summit. The two-day pass for July 19th and 20th is worth $300. Robert Scoble has just been added to the speaker list. All you have to do is send me your worst horror story of someone who just wouldn’t experiment—who refused to “do it wrong quickly.” Enter now.

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Mike Moran

Mike Moran is an expert in digital marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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