5 Mistakes to Learn from The History of Yahoo

Recently you may have heard a lot about the history of Yahoo, the giant Internet company and one of the most popular websites in the USA as a top search engine (although not choice number 1), a Web portal and a series of other products and services like Yahoo! Mail, Mobile Apps, Big Data, Answers, Groups, etc. This week sold to the telecom giant Verizon for $4.8 billion (excluding their stakes on Alibaba and Yahoo Japan).

To this day 700 million people visit one of Yahoo websites every month. In 2013 the company bought Tumblr and Flickr and added them to its arsenal. So why is it that Yahoo! wasn’t doing well anymore before the acquisition?

Here are some facts you may not know about the history of Yahoo which culminated to a recent crisis, some of which are from the past, but the following points are a proof that a series of decisions can lead to failure.

What we could learn from The History of Yahoo?

1. They missed many profitable opportunities

Did you know that the board turned down an offer to acquire Google for $1 million back in 1998?  They also turned down a lucrative acquisition proposal from Microsoft for $44.6 Billion, and later refused to buy Facebook for $1 billion.

When you say no 3 times, and all of these turn out to be the leading companies of the century, there must be something wrong in your approach.

But the success of these 3 could have been predicted, had Yahoo been having more sharp-witted and initiative people on the top. Because that’s another thing they were doing wrong up until 2012.

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2. They never simplified the usability of the site much

Today people have a short attention span, want quick solutions to everything, are overloaded with information, and have so many things fighting for their attention at any moment.

So any technology that is fast, super easy to use and gives them exactly what they want, wins.

After all, the Apple designs are so minimalist that there’s nothing unnecessary. That’s also how Mark Zuckerberg made his social network better than MySpace (which was number one at the time), he designed a greater user experience by making things simpler.

Yahoo! is still cluttered, confusing and far from simple.

3. Innovation?


Was lack of innovation one of the key factors in the history of Yahoo?

The lean startup approach made it clear that the best way to launch new products and services and follow the trends in a particular market, was to get the minimum viable product out there sooner, get feedback, see if the whole thing has potential, and if it does – to constantly make changes to it and add features according to what people like and don’t like about it.

This also means that you have to make mistakes and learn from them, to challenge yourself by exploring new options.

But Yahoo! remained the same, more or less. That’s true about Tumblr too. Since the Yahoo! board has been in charge of it, it hasn’t experienced any major changes and is even left behind compared to Snapchat and other apps who made communication even faster and easier through instant messaging and quick consumption of information.

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4. An issue with identity

Some experts say that the current crisis Yahoo! was facing is due to still not knowing who they are and how to express it with their products and services.

It was never clear whether the company was a digital media or a technology one. And in today’s startup world, you must know exactly where you are and where you’re headed, what your strengths are and how you want people to perceive you so that you can stick to that image and keep presenting yourself in the best way possible.

At some point, in 2013, Marissa Mayer had to make a public statement and say that Yahoo! is indeed a tech company, although it was the former – a digital media company – up until the year before.

Marissa Mayer CEO of Yahoo in a Tech event in 2009. Photo by JD Lasica.

Marissa Mayer CEO of Yahoo in a Tech event in 2009. Photo by JD Lasica.

We can hardly think of another big multinational company for which we can’t give a clear description and say what they do.

That too shows insecurity and lack of a clear direction, and in the long-term leads to crisis.

The company was acting like a kid for around 2 decades. A child, whose changing its opinion, trying to reinvent itself, and even needing someone else to show him the right path.

5. They have not been making the most of their existing audience

Did you know that since 2008 Yahoo Inc. hasn’t reported a single year with growth in revenue?

They made mistakes, said no when it should have been yes and stayed the same when they should’ve changed. But they still have one of the biggest audiences on the Web.

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It’s the highest-read news site with 700 million visitors every month. Such traffic must be taken care of. People are already there, so the company must constantly ask how they can make their experience better.

Yahoo! Answers, for example, is a pretty popular tool and the board must invest more time and resources into unleashing more of its potential.
Then there’s Yahoo! Groups, whose possibilities are yet to be explored. It can become an even better place for communication and offer more features.
Last but not least, Yahoo! Mail is not developing enough in terms of simplicity, spam filtering and categorizing.

A crisis like that could be predictable. And if you too are making some of these mistakes with your business venture, make sure you do something about them today, not tomorrow.

What else do you think we can learn form the history of Yahoo?



Article by Lidiya K.

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Categories:   Management, Technology