What Went Wrong At Yahoo 162
kjh1 writes "Paul Graham writes about what he felt went wrong at Yahoo. He has first-hand experience — his company, Viaweb, was bought by Yahoo and he worked there for a while. In a nutshell, he felt that Yahoo was too conflicted about whether they were a technology company or a media company. 'If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.' This in part led to hiring bad programmers, or at least not going single-mindedly after the very best ones. They also lacked the 'hacker' culture that Google and Facebook still seem to have, and that is found in many startup tech companies. 'As long as customers were writing big checks for banner ads, it was hard to take search seriously. Google didn't have that to distract them.'"
What went wrong? (Score:1, Interesting)
Nothing "went wrong". Google happened. It's not complicated. To say what "went wrong" is like asking what went wrong in New Orleans when Katrina happened. Certainly with hindsight you can point out all the mistakes. Certainly you could say: "if we'd known...". But basically, and in a similar manner to Katrina, Google came and washed everything else away for a time.
Re:What went wrong? (Score:4, Interesting)
So, when Google came along, people climbed onto the roof of Yahoo headquarters and waited for the government to bail them out?
But seriously... the problem for Yahoo, and a lot of other companies, is/was as stated in the summary: They don't know if they're technology companies or media companies. Yahoo, Google, etc, are basically ad agencies which use their free services to honeypot people into their advertising ecosystem. I think Yahoo knew it was a media company when people thought they were a technology company, but didn't realize people thought they were a tech company. Google seems to be playing the "oh, we're just an innocent tech company making cool innovations n' stuff" game better, and minimized the impact of their ads.
Consequently, Google has become an advertising and content behemoth while people are still going on and on about how cool their "products" are. It's fucking stupid.
Re:What went wrong? (Score:2, Interesting)
Great memories, though (Score:2, Interesting)
I remember when the WWW was still nascent back in the early/mid 90s. Yahoo was the premier destination for me - the one portal that was always in touch with what I wanted. Then came Excite and others.
Could it also be that the other companies mentioned are largely using Linux, which engenders a sort of "hacker" culture. Yahoo historically has been a BSD-centric company, and the BSD guys I know tend to be far more conservative and less "hackerish". I don't know if the platform has anything to do with it, but a lot of guys and girls that consider themselves hackers tend to be in the Linnux camp. I could be off base here, but I think the underlying toolsets engender a certain mindset among those users.
Media vs Tech (Score:3, Interesting)
If you walked around their offices, it seemed like a software company. The cubicles were full of programmers writing code, product managers thinking about feature lists and ship dates, support people (yes, there were actually support people) telling users to restart their browsers, and so on, just like a software company. So why did they call themselves a media company?
You'd see the same thing at an insurance company, auto company, or any large company that has large in-house development department. And yet, they're not conflicted about if they're a tech company or an insurance company.
Here's a hint on how to decide. How are your revenues generated?
Sell software, hardware, algorithms? Tech company.
Sell advertising? Media company.
Yahoo! Is a media company and so is Google.
It's not rocket science.
Switch to Google (Score:5, Interesting)
Yahoo! *didn't have* their own search-engine (Score:4, Interesting)
What universe did you live in? There was a little thing AltaVista in that time period.
Indeed: as I recall, the `Yahoo! search-engine' *was* AltaVista (with Yahoo! decorations, but a little "powered by AltaVista" footnote at the bottom)--at least at some point; I think there were different back-ends that they used at different points.... Yahoo! may have actually done their own thing for the last few years, but only for the last few years.
Re:Way to compete with MS (Score:1, Interesting)
Re:What went wrong? (Score:1, Interesting)
Saying that "Google happened" like it was some inevitable event pre-planned on the timeline of the Earth is a very poor reason for why Yahoo failed.
Yahoo, in every thing they've done has had the upper hand, and let it slip away. They grab a market, and fail to innovate beyond that. They get greedy with big checks from advertisers and can't see beyond that.
Especially since Yahoo! was an initial investor in Google:
http://www.internetnews.com/bus-news/article.php/3392781
I'm sure if they made a reasonable offer, they could have bought out Google in its nascent stages.
Re:What went wrong? (Score:5, Interesting)
I'm an honest to god Yahoo! employee, so the coward goes without saying ...
Yahoo! does have a ton of good ideas, and over the years, has learned to snap up better and better people.
The problem that Yahoo! has had, and still has today, is that it doesn't know what it wants to be. And, as a result, does about a thousand different things simultaneously. Completely half-assed. They grab a certain idea or market, latch onto it, investing and innovating ... then suddenly, they stop thinking it is a priority, and they stop focusing on it. Low and behold, another company comes along, many of them sporting ex-Yahoo! employees or students that Yahoo! rejected, doing the exact same thing that Yahoo! is or was doing, only better or tweaking it, just a tad. It becomes a success, because its their sole focus, while the Yahoo! product falls even more by the wayside.
That is Yahoo! ... they half-ass everything they create, because some other new thing comes along and captures their interest. It makes Yahoo! a clusterfuck of products and services, technology and media; where one portion of a product works as intended but another interlocking piece is a huge pile. If you question that sentiment, look at their homepage. Host a site on Yahoo!. Use a paid product.
Yahoo! is a great way to point your parents, maybe your grandparents. Yahoo! has every opportunity to be a great company, even today. They just need to finish one product at a time, focus on one segment of the market per department, and honestly, honestly after all these years ... decide what kind of company they want to be.
I doubt it will ever happen without some change in the leadership of the company. The board of directors ... all old people, all business-focused, all seemingly lacking the spark of ingenuity. They have aged, they're old people who think they're hip, but really they're just unwilling to take risks or attempt the new. It shows in everything they do and every product they touch. I have hope for Bartz, she seems to have a good head on her shoulders ... but with Yang there, waiting in the shadows, still pulling the strings, Yahoo! seems doomed to fail.
Re:Way to compete with MS (Score:5, Interesting)
I read an article about Yahoo on their tenth anniversary. It bragged about how Yahoo's goal was to always remain profitable and that's why they were able to remain viable, while so many other internet companies went down. At first, I thought that was brilliant in a time when so many other companies were biting the dust because they wasted so much money. But then the reality of what their goals are really struck me - all they cared about was money, and not their customers who were paying them.
In the ecommerce dept, they bragged about having a $3 BILLION dollar annual revenue, but I regularly saw them screw their customers over big time. If a guys account/site couldn't be fixed at level 1 tech support, then they transferred the call up to tier II - standard procedure. But if tier II couldn't fix it, the ticket had to be escalated up to the engineering dept and woe unto them! It usually took 1 - 3 WEEKS to get it fixed!!! To the best of my knowledge, it is still that way. Even if the customers entire website was down, it didn't matter. I heard that they only had 2 or 3 engineers working there to fix thousands of escalated tickets. No wonder it took so long. The longer it took to fix, the more Yahoo would lose money because they made money by getting a percentage of the customer's sales, so if the customer's site was down, both of them lost money. On top of that, they would not even offer an apology, or reimburse the customer for their lost business. Some customers even went out of business because Yahoo took too long to fix a high priority issue. In contrast, one time I had my own site hosted by a local web hosting company selling some stuff, and I verified one morning that my site was down, and it wasn't my computer, internet connection, etc, so I sent in an email to tech support. In 2 minutes, I received an automated response acknowledging my issue and it informed me that some techs were working on the issue. In 15 minutes, I got another email from the techs themselves telling me more details about what went wrong and that they will have it fixed soon. In less than 3 hours, my site was back up and running! If a small web hosting company can do that, then a multi-billion dollar company can do that too, BUT THEY CHOSE NOT TO, so I don't feel sorry for Yahoo. They shot themselves in the foot.
Yahoo was only interested in grabbing more customers and not keeping the ones they had and they made some very stupid mistakes as a result. Like one time they had a web ad for their merchant solutions ecommerce, bragging about how good they were, but when you clicked on the link to see what customers h
yahoo mail (Score:4, Interesting)
Yahoo mail is an example of doing it wrong. No offense, but when my small team at a university can come up with better spam defenses than yahoo has in our spare time, yahoo has a problem.
Re:Jerry Yang (Score:2, Interesting)
Ah, I remember when that happened. Everyone and their grandma went out and bought Yahoo stock
because they thought it was a sure thing and they would make some easy money. Then when the
deal fell through, they blamed Jerry Yang, rather than taking responsibility for their poor investment
choice.