It’s been a few days since Microsoft reportedly walked away for good from discussions with Yahoo, and the vitriol being hurled at Yahoo CEO Jerry Yang is really something to behold. There certainly are facts to back it up, but the uniformity of the conventional wisdom and the level of anger puzzles me. Some of the coverage has taken on a very personal tone.
You can easily picture the veins bulging as Michael Arrington at TechCrunch screams Yahoo can’t possibly make more mistakes:
http://www.techcrunch.com/2008/06/13/massive-destruction-of-shareholder-value-employee-morale-and-internet-health/
Joe Nocera in the NYTimes rips into Yang and accuses him of violating his fiduciary duties and “stiffing” shareholders: http://www.nytimes.com/2008/06/14/business/14nocera.html?_r=1&partner=rssnyt&emc=rss&oref=slogin
Kara Swisher at All Things D already has a list of possible successors prepared:
http://kara.allthingsd.com/20080617/boomtowns-short-list-of-yahoo-ceos-sorry-jerry-but-fortune-favors-the-prepared/
Each executive departure is shown as proof of internal chaos — even when people like Jeremy Zawodny go out of their way to deny any connection:
http://jeremy.zawodny.com/blog/archives/010336.html
So what’s wrong with the conventional wisdom? Seems to me it’s focused too much on stock watching, assumes a merger with Microsoft would be successful and would curb the dominance of Google, and can’t conceive of the status quo changing. Let’s take those quickly in order:
- Didn’t techies used to complain about business types obsessing over quarter to quarter numbers, and failing to see the need for the long-term view? And do the shareholders of Yahoo need Michael Arrington to go into a frenzy on their behalf? Investment comes with risk. If you don’t like how a company you’ve invested in is performing, you sell the stock.
- A majority of mergers fail. Everyone knows this, many forget in the excitement of mergers and acquisitions. Poor planning, executive distraction, culture clashes and an internal focus on integration that hurts day-to-day performance are just some of the common causes. And is there any proof that Microsoft and Yahoo today exerting any moderating influence on Google’s rates? If not, then why assume a combined MicroHoo would?
- To think the status quo can’t be changed is showing a lack of faith in technology and innovation. Who saw Google coming when Goto.com first started offering bids for search ad placement in 1998? Will no company ever challenge Google? And this view is very North America centric — in other global search markets Google has nothing like the share it has here. Internet growth is fastest in areas like China, where the search engine Baidu.com reigns supreme.
So I’m not totally alone on this ledge, a couple of interesting posts. Tim O’Reilly talks about an Internent Operating System of which search is just a piece, and encourages Yahoo (and Microsoft) to find new ways to excel:
Meanwhile, Yahoo! has let itself be defined by the same kind of penis envy. Here is a business that has beaten Google in area after area, that is unquestionably the #1 media company on the net, and yet has let itself be defined by the one area in which it is #2 — and where it could be much more profitable and successful by partnering with #1 than by competing with them.
http://radar.oreilly.com/archives/2008/05/microhoo-corporate-penis-envy.html
And here’s a good read from Bernard Lunn of ReadWriteWeb, where he outlines 11 areas of possible opportunity around search:
My first post for ReadWriteWeb (nearly a year ago) started with the premise that search was “game over”, that Google had won and the only opportunity left was (re)search – i.e. what one does after the basic search. Unfortunately, none of the search start-ups since then has made a dent in Google’s relentless march towards search market dominance. In this article, we outline 11 search trends that may change that.
The proposition that launched countless search start-ups was: “If we can get just 1% of the search market, we will have a very valuable business”. That may be true, but getting 1% has proved elusive. It has been an all or nothing game. That may be about to change.
It is possible that Google will not be beaten by one big competitor. It is possible that they will be pecked at by thousands of tiny start-ups using a new outsourced infrastructure.
http://www.readwriteweb.com/archives/11_search_trends.php
None of this means Yang is necessarily the right guy for the job — he could be gone very soon under the avalanche of negative coverage. Unlike Kara Swisher, I’ve never spoken to him and can’t give an opinion on his abilities based on first hand knowledge. And unlike Michael Arrington I’m not on the speed dial of every disgruntled Yahoo exec with a juicy leak. (maybe someday this blog will get there…)
The reporting around the poison pill that was rushed through to make any MS acquisition harder sure sounds bad. A shareholder suit has been filed, and time will tell on that front. But it would be nice if some of the reporting allowed for the possibility — just the possibility — that Jerry Yang understands the company he founded and can lead Yahoo to success on its own.
UPDATE — Awesome, Danny Sullivan of Search Engine Land agrees! Of course he writes a more thorough and detailed post:
Yahoo The Failure — Myth vs. Reality: http://searchengineland.com/080620-094239.php
June 18, 2008
(graphic credit New York Times)
Interesting article in the Times today about the battle between Research In Motion (RIM) and Apple for dominance of the smartphone market. Smartphones are becoming so capable these days I call them $79 personal computers. As the article notes, until the introduction of the iPhone the market was focused on the enterprise, not on consumers. The success of the iPhone has changed that, and the dominant player RIM is trying to adapt.
Brad Stone lays out a compelling simple narrative, as he should for a horizontal publication like the Times. However a few things get missed or glossed over in his straight-forward RIM vs. Apple telling of this story. The focus is totally North American — it goes unmentioned that Symbian is the most popular OS for smartphones globally by a wide margin, but has very small presence in NA. Here’s the link:
http://www.nytimes.com/2008/04/27/technology/27rim.html?_r=1&th=&emc=th&pagewanted=print
First off, he seems to give RIM an unquestioned advantage in the area of security, and giving enterprise IT departments what they need. Seemed strange to me that he made no mention of the service outages that have plagued RIM as recently as last month. That’s a security concern right there to companies that can’t afford to lose access. Post from engadget on March outage questioning RIM’s explanation:
http://www.engadget.com/2008/02/13/blackberry-outage-shows-that-rim-learned-nothing-in-2007/
Second, I know from personal experience that some potential customers, primarily government, see RIM’s operation of its own Network Operating Center (NOC) as a deal killer for any adoption. Defense agencies in particular need to control their communications, and will not work with a solution that depends on an external, third party network.
Finally, there are new entrants into the market that give enterprises strong and effective security solutions for their distributed workforces, no matter what operating system drives the devices. For all these reasons, better security IMO isn’t the strongest factor supporting Blackberry’s market leadership here in North America.
Two factors are more important than security to maintaining RIM’s lead. One is the exclusive focus on the smartphone market the article mentions – unlike their competitors this is all RIM does. Second and even more important is their strategic decision to work with the major carriers in NA, rather than try to go around them. Of course RIM really has no other choice. But I give their co-ceo Jim Balsillie kudos for being so honest on this point:
R.I.M. makes its alliances clear. “We are sort of polite and amiable and we gently interrelate with the carriers and try to find compatibility,” Mr. Balsillie said. “It may be a better strategy to fight the carrier. We may be wrong. The carrier may get disintermediated, in which case we fade with them.”
Pretty clear-cut! RIM is betting on the carriers and the business model that has been constructed in NA over the past 12 years or so. As long as RIM continues to innovate its offerings to enterprises and provide more features consumers want in their devices (a big caveat I realize), they either dominate or stay a very strong presence.
If Apple and Google succeed with their open network push and disintermediate (big word for go around) the carriers and appeal to consumers directly, RIM becomes a niche player fast.
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April 27, 2008
