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What Should Yahoo! Do?

y3 What Should Yahoo! Do?I and others have spoken of the need for morale boosting and a new vision/strategy at Yahoo! That’s much easier said than done and what does that actually even mean? I don’t have complete visibility on the company and only see parts of it — like the three blind men and the elephant.

But here’s a little unsolicited advice for Yahoo! from where I sit.

These are not necessarily in order of priority:

  • Work on restoring the confidence of advertisers and the responsiveness of search marketing and the sales organization (I’ve heard grumbling recently)
  • Work on employee retention, then recruiting (sounds like Yang is focused on these issues)
  • Invest in technology and search. For now, Yahoo! has lost search to Google. But it’s critical to remain competitive and credible, however, and think growth over the longer term. That means building in differentiation for consumers. What does “social search” really mean to Yahoo!? It should figure that out and invest.
  • Invest aggressively in mobile, which it appears to be doing. And don’t neglect social apps in mobile. It had an early version of Twitter (pre-Twitter) in Mix’d, which it shut down.
  • Reinvigorate local. Yahoo! is/was the leader and that position is in danger. Yahoo! all but invented the present, dynamic map-based form of local search but it has ceded much ground to Google and Microsoft in that area.
  • Leverage the newspaper consortium. This is strategic for both sides. There’s lots to talk about here but help them with all the Yahoo! APIs, including maps, shopping, etc. The newspapers can tap these resources to build new “verticals” or to enhance their own sites. I just don’t see any of this going on yet. Time to accelerate.
  • Yahoo! enjoys leadership or near leadership in a number of areas: news, local, mail, verticals (e.g. finance). It should clearly identify those and invest more to maintain usage and loyalty.
  • It also needs some new “wow” factor. It has become decidedly less “cool” a company in the past year or so. To capture the imagination of “early adopters” and the press there needs to be a stand-out and sexy product, which Yahoo! doesn’t currently seem to have. Is it something in mobile? Is it Internet content on TV? Is it a video offering of some sort?

It’s very difficult to do all of these things equally well. But Yahoo! needs to at least do some of them well or . . . it will almost certainly become an acquisition target or be forced to merge.

Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.

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3 thoughts on “What Should Yahoo! Do?

  1. I think they have to go back to the fundamentals that made them successful in the first place. Mobile is very likely a key main stake for the future ahead. There are a large quantity of just mobile user they could capture. It would be easy to assume that if you can lead mobile you can regain users for online in general. Focus on the niche and gain back the loyalty and coolness!