Former Yahoo Exec: Yahoo Never Found Its Identity With Carol Bartz

It outsourced its search business to Microsoft; it sold off popular properties like Delicious; and it made plays for original content, mobile, and social. So what is Yahoo?

What is Yahoo? Most remember it as a search engine. Others probably use it for shopping. Some see it as a mail or messaging service, while others understand it as a news site—an original content provider. And if the company ever manages to acquire Hulu, as rumors have indicated, then who knows what Yahoo will become.

The problem is that no one actually knows what Yahoo is, including its former CEO Carol Bartz, who got the boot yesterday after nearly three bumpy years trying to turn the company around. During that time, Bartz was unable to crystalize Yahoo's direction and refine its focus—a major reason why the company's revenue continued to decline throughout her tenure.

"The real question has always been around what [Yahoo's] identity is," says Tim Mayer, chief strategy officer of Trada, and a former top executive at Yahoo from 2003 to 2010, who oversaw its search business and North American audience. "How do you create focus when they're doing so many things? A lot of that comes down to making a decision about what you are as well as what you aren't."

The company has long been unable to resolve its true identity. It outsourced its search business to Microsoft; it sold off popular properties like Delicious; and it made plays for original content (with the acquisition of Associated Content), mobile, and social (IntoNow). Here's Bartz's vision for the company, via her 2010 interview with TechCrunch:

Listen Yahoo is a great company that is very, very strong in content for its users, uses amazing technology to serve up what increasingly we think is going to be the web of one. For instance, on our today module in the front page, every 5 minutes we have 32,000 different variations of that module. So you don’t even know what I’m seeing in fact we serve a million different front page modules a day and that’s just through content optimization. And that’s just the beginning…Customized because we know the things you’re interested in. Maybe you don’t like light entertainment maybe you like a certain sports team, etc., etc. And our click through rate went up twice. So the point is, people come to us to find out what is going on with the world in a very nice quick fashion to do their communications, email, messenger, check-in on their teens. We all know about Yahoo finance. It’s a places where you can just get it together. It’s collated for you, it’s all the things as you’re moving, you can even get your social information there. Everybody moves through many websites in a day, Yahoo is one they always stop at.

Later that year, after being criticized for her rambling and confusing answer, Bartz tried again to explain Yahoo, this time at the Web 2.0 Summit in San Francisco:

"Maybe it's taken me two years, but I've got it: Yahoo is actually a simple story," Bartz said. "We're a tech company, innovative. We're the largest content communication company in the world…Yahoo has stood for a lot in the Internet. It has stood for fun, it has stood for relevance. It has stood for context around information. Has it had some tough years, sure? I think companies can be tested, and companies pick themselves up when they've had some challenges, and that's what Yahoo is doing."

Despite widespread criticism of the company, Yahoo remains one of the most popular Internet properties in the world in terms of traffic, second only to Google and ahead of Microsoft, Facebook, and AOL, according to ComScore. That reach is of course valuable, but only if Yahoo can decide its focus—as Mayer explains, the Internet is shifting away from central online destinations and hubs, and more toward specialization, which could spell trouble for Yahoo.

"A lot of it comes down to how Yahoo started," Mayer says. "Initially on the Internet, a lot of the offline brands weren't online. So Yahoo developed Yahoo Sports when ESPN wasn't online. Then they developed Yahoo News when CNN wasn't online. But when these big offline brands came online, they just had a much larger footprint of reporters and infrastructure in these properties to compete with. They have lot of these businesses where they're competing against these huge brands and businesses with lots more writers and infrastructure and specialization. The Internet is moving from generic to a place where people go to best of breed providers. They go to Amazon for shopping; they got ESPN for sports; they go to CNN for news."

In other words, he continues, we're seeing the "app-ification" of the web, "where people are interfacing with best of breed providers rather than that convenient portal play."

What Yahoo must learn—and what Bartz never realized—is that Yahoo can't be everything (news, social, mobile, communication, search, etc.) to everyone anymore.

Unfortunately for Bartz, we don't, uh, Yahoo like that any longer.

[Image: Flickr user Paurian]

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3 Comments

  • Andrew Norris

    Myself I don't think identity is the biggest issue. Most people know microsoft for windows and office, but yet they have made a fortune from the xbox. Most people knew apple as an alternative computer for arty people that think different. I think they just don't do anything esp. well. It's more the fundamentals. Their products are not that good.  And have not seen a spark of innovation from them to my knowledge. Nothing stands out, none of their products excel in any way. 

    Apple, ok has a new (yes new but we tend to think it was always that way) identity as being cool designer gear. But above all apple does produce first rate quality products.

  • Andrew Norris

    ie. when i said " Their products are not that good.  And have not seen a spark of innovation from them to my knowledge. Nothing stands out, none of their products excel in any way. " - i was talking about yahoo. Apple exceed them in every way. 

  • Andrew Norris

    by the way, was talking about yahoo as having poor products, not apple, in case any one who happens to read this gets confused by the way I explained it there. could do with an edit option fast company ?