OPINION: The root causes of Yahoo's plight today

Although it didn’t come as a surprise to many, the news that Yahoo was making Alta Vista vanish in to the sunset was a tad saddening for an old-timer like me. A search engine which once held the potential to be better than any other (and aptly named after a ‘vista’ that the builders looked over), was just one of the candidates that were recently classified into the ‘sunset’ category by Yahoo.

Let us take a look at Yahoo's list of ‘sunset’ brands:

• Alta Vista. Alta vista was the Google of the late 90s. We grew up searching in this wonderful engine that was launched by Digital Equipment Corporation which sadly met with this inglorious ‘sunset’ thanks to early mismanagement by founders and now at the benevolent hands of Yahoo.
• Alltheweb. The only search engine that had a total number of indexed pages that rivaled Google in 2003. A search engine that developed ‘instantly populating search results’ (aka Instant) that Google recently created so much hype and hoopla about.
• Delicious. A hugely popular online bookmarking tool that was acquired (unfortunately) by Yahoo in 2005. Within five years, it was up for sale and now (fortunately) being bought by Avos, a new internet company founded by the founders of YouTube.
• Yahoo Buzz. Although it never took off, this ‘hot trend-spotting site’ was a product which held some promise (although a copy of Digg). But it did not take more than three years for this Buzz to lose its fizz.

Others (as seen from a leaked Yahoo presentation slide that leaked in Twitter) included Yahoo Bookmarks, Yahoo Picks and MyBloglogs.

Is the story getting any better?

Let us for a moment get a little bullish about the changes at Yahoo and look at the sunny side of the Yahoo-Bing partnership and the recently reported increase in search shares.

ComScore recently reported that Yahoo had significantly increased its ‘core search’ shares and page views starting Q1 2011, as a result of searches, were also making good head way. A sign that should in theory cause great relief, but is it translating in to any real upside in income for Yahoo?

A few days ago, Yahoo declared a massive decline in search revenues for Q1 2011. The company   blamed paying its partner Microsoft 12 per cent of its net search revenues and declared that Microsoft’s ads were underperforming. However, if you take a look at Yahoo's search revenue from 2008, it doesn’t take an expert to realise that the revenue downfall is not news .

The real culprit behind the ‘rise in search share’ is mostly attributed to what was being classified as ‘real searches’ and ‘real page views’. The ‘core search’ figures quoted from ComScore by Yahoo included a lot that by no means are qualified to fall under the real ‘searching the engine’ but included clicks on ‘slide shows’ and ‘trend links' classified by Yahoo, clicking on which will launch search results for that trend (which in turn gets classified as a search in Yahoo). Little surprise that the bottom line is not improving despite the bravado shown in declaring the rise in search shares.

Let us try to find some solace in some of the tools and products Yahoo have developed. What meets us here is the story of a slew of (rather unknown) tools and products that never reached the intended audience due to a lack of concerted and focused effort from the folks at Yahoo. They failed to get their due in the market place simply because someone in Yahoo overlooked the simple step of consolidating all of those into a single platform and creating the right environment for ‘propagating’ them in the market place. Ever heard of Yahoo Clues? Or Yahoo's version of Google Instant Yahoo Suggest, developed before Google Instant?

Importance of collaboration and integration

As an erstwhile staunch supporter of the Yahoo brand both as a consumer and a marketer, here are my thoughts on the root causes of Yahoo’s plight today.

• Failure to identify high potential products and services and integrate them to form a synergistic system. For example Yahoo Network Display, Yahoo Mobile, Yahoo Search and Yahoo Social Platforms including FlickR could take the shape of a combined user experience journey.
• Failure to create individual product and service enhancements based on user research and insights and taking it to the masses. For example Yahoo Search Direct is a rather late answer to Google Instant and originally existed as Yahoo Suggest.
• Failure to consolidate, collaborate and integrate. The scorching growth and popularity of Yahoo in the late 90s and early 2000s, possibly made Yahoo overlook the importance of having a collaborative organisation vertically and horizontally.

As if the lack of collaboration and synergy between internal product teams weren’t bad enough, a totally de-centralised management setup created across geographies, compounded by weak external partnerships (Naver in Korea, Softbank in Japan), have worked in unison to create a self-immolating scenario that threatens to consume the once sought after company inside out.

But will the future be as bleak as doomsayers predict? I will let time have the final word.

After all, I was a staunch supporter of Yahoo once.