End of Yahoo?

Background:

Do you have a Yahoo email account or use the portal for its other functionality? If so, the article entitled “Does anyone care about Yahoo anymore?” published in CNNMoney.com on September 9^th will be of interest to you.

I personally have a yahoo account and also use Yahoo maps. The author of the article uses Yahoo Finance and the Yahoo's fantasy sports sites. I will admit though that for searching the Internet, Google is my portal of choice.

Yahoo has been a popular search portal for years since 1996. But as the author of the CNN article points out this isn't 1998 anymore. Being a portal doesn't make you a leader*.

The author continues by making a good point that while rivals like Google (GOOG, Fortune 500), Facebook and Apple (AAPL, Fortune 500) continue to innovate in the worlds of search, social media and mobile, many wonder just what Yahoo is other than a slightly bigger version of AOL. Even AOL has done a decent job of differentiating itself from the competition lately thanks to a keen focus on local content*. Yahoo’s reputation decline is evident as its stock continues to slump. The stock is down 18% this year and is only 7% above its 52-week low*.

Road to recovery or disaster?:

So what can Yahoo do “to reclaim its former glory” asks the author? Based on expert opinion, the biggest problem is that there doesn't seem to be a focus on any specific type of product or area of technology. The portal is not keeping up with the respect to mobile and social media.

Yahoo, to its credit, has done a lot since a new CEO Carol Bartz joined in January 2009 to become leaner and meaner in order to get profits back on track. The company's net income increased by 40% last year even though revenues slipped.*

The author points out that cost-cutting may have come at a price. Yahoo now lacks strategic vision. He thinks Bartz was the right person to whip Yahoo into shape in the short-term but that a new CEO might do a better job of actually engineering a sustainable turnaround.

Yahoo's total sales are expected to be flat this year and analysts are only forecasting a 4% rise in 2011. That's anemic for an "old media" company, let alone a "new media" firm like Yahoo.*

Partnerships – the right decision?:

The best you can say about Yahoo these days is that it has done a decent job of partnering with, and occasionally even outsourcing functions to, other relevant companies. Hence, links to Facebook and Twitter on Yahoo's home page. And the decision to let Microsoft's Bing power search results on Yahoo and give up control of its job listing service HotJobs to Monster Worldwide (MWW). But Yahoo can only go so far by relying on the help of rivals. *

The main point:

The author ends the article with saying that for Yahoo to survive it has to focus on strategies for offering new products. Hence it may be time for Yahoo to evaluate the 4 P’s of Marketing: Product, Price, Place and Promotion.

*  Source: http://money.cnn.com/2010/09/09/technology/thebuzz/index.htm