Thursday, November 6, 2008

Yahoo for Sale! What went wrong?

Some milestones of Yahoo!:

2004:
Yahoo! upgrades the email account capacity from 4MB to 1GB to compete with Google.
Yahoo! introduces better AJAX interface to email
Yahoo! launches its own search engine technology.
Yahoo! announces it will practice paid inclusion for its search service.
Yahoo! launches beta version of its video search engine.


2005:
Yahoo! announces interoperability with MS Messenger and Yahoo Messenger.
Yahoo! launches Yahoo! Music
Yahoo! launches blogging and social networking service Yahoo!360
Yahoo! acquires photo sharing service Flickr
Yahoo! acquires widget engine Konfabulator
Yahoo! acquires del.icio.us.

2007:
Yahoo! releases new version of Yahoo!Mail allowing messages to mobile phones
Yahoo! Mail provides unlimited storage.

2008:
Microsoft offers to buy Yahoo! Yahoo rejects offer
Yahoo in Talks with News Corporation and Google on possible mergers.

Yesterday:
Yahoo! CEO Jerry Yang says company is ready for sale!

So where did yahoo go wrong in all these years?

1. Biting More than Yahoo! can Chew
Yahoo! announced a large number of services in 2004/2005. New interfaces to its email, new search technology, new acquisitions, new social networking, etc. All of these services added up to a lot of development work for Yahoo, which it could not handle. This resulted in sacrificing quality for quantity. Google, on the other hand grew slowly, perfecting each new service gradually over time (even with betas extending to years).

2. If you break for lunch, you are lunch.
The quote by Jerry Yang summarizes Yahoo!'s state today, ironically. Yahoo! had underestimated the competition. Yahoo was forced to upgrade both its email and search service once Google came along with alternate better services. The company was slow in developing new technologies, probably because of trying to do too many things at the same time.

3. Forgetting the Customer
Many of Yahoo! services were not designed for ease of use, or did they keep customer usability needs in mind. in 2004, Yahoo! attempted to gain more revenues at the expense of customer dissatisfaction by placing paid listings as the top search results.
The Yahoo! Maps did not tolerate misspelling of street names, town names etc, to work correctly. The Yahoo landing page was quite cluttered with too many links and services. All of these and others served to alienate the users, and forcing users to find better competing services.