How Yahoo Is Killing Yahoo (and How the Media Is Assisting This Suicide)

By Clint Boulton  |  Posted 2009-08-27

How Yahoo Is Killing Yahoo (and How the Media Is Assisting This Suicide)

News Analysis: When Yahoo hired new CEO Carol Bartz in January, I was convinced the company was on the turnaround path. I believed the Web services giant was capable of recovering from the mess of mutilated morale Yahoo co-founder Jerry Yang left in his wake following the end of his painful return as CEO.

Bartz put a serious visage on a company that no one was taking seriously anymore. Despite a robust display advertising business, Yahoo was suffering in many other areas, and Bartz looked right for the part of savior. But the more I watch the company's moves, the more I'm convinced it is slowly killing itself. The media, through its unflattering coverage, is assisting.

Yahoo has made many bids to draw positive attention in the last several months as it seeks to better compete versus Google, Microsoft, Facebook, Twitter and other Internet rivals. However, nearly everything it tries is shot down by the media, criticized for such things as being late to offer features for its Web services, or just flat-out wrong. The brightest example of the latter came when Yahoo announced that it had agreed to let Microsoft's Bing search engine serve as the back end for Yahoo Search.

Microsoft CEO Steve Ballmer and Bartz were convinced that they had a winning partnership, only to be humbled by financial analysts, who were turned off by the lack of an upfront payment to Yahoo. They didn't care that Microsoft would pay Yahoo 88 percent of the revenues per search query; they wanted Microsoft to pay Yahoo somewhere between $1 billion and several billions of dollars from the beginning.

Bartz fueled this fire by telling everyone a deal with Microsoft would take "boatloads of money." She again put her foot in her mouth by foolishly stating Yahoo has never been a search company.

Even when Yahoo thinks it is orchestrating a winning move on the leapfrog-happy Web services market, it finds its enthusiasm curbed by tepid reception to its plans.    

The greatest example of this came earlier this week when Yahoo Aug. 24 hosted a high-level demonstration of upgrades to its Yahoo Search, Yahoo Mail and Yahoo Messenger applications at its Sunnyvale, Calif., headquarters.

The "What Matters Most" event seemed like a great idea from Yahoo CMO Elisa Steele: Give the media a taste of its new product offerings and then sit back and let the praise wash over it for its ability to get up to Web 2.0 snuff with Internet rivals Google, Microsoft, Facebook and Twitter.

That didn't happen. When the Q&A session rolled around, roughly half of the questions from the media had to do with what would happen to Yahoo Search when Microsoft Bing begins powering it in 2010. Here's a sample of an answer to one of several variations of the what-happens-when-Bing-comes-to-town question:

What Matters Most? Not Yahoo

"The agreement calls for Microsoft to supply us with algorithmic search results, images and video," Prabhakar Raghavan, senior vice president of Yahoo's Labs and Search Strategy, said during the press conference. "We will be free to innovate on top of that layer."

TechCrunch's MG Siegler, who wrote in May that Yahoo Search as we know it is over (before the Microsoft deal!), summarized the tenor of the Q&A session in this blog post when he wrote that Raghavan tried to answer the questions as best he could:

"But the vibe seemed to be that he felt confined in giving the answers that Yahoo is making all of its execs give. And even though at least half of the questions during the Q&A session were about Yahoo's deal with Microsoft, it was clear that plenty of the journalists and bloggers in the audience still weren't entirely clear what the plan is. Or that Yahoo really knows what the plan is."

What is clear is that Yahoo confused the media at this event just as it did financial analysts when it announced the deal with Microsoft. If the Web-savvy media can't look past how Bing will work with Yahoo to accept the upgrades to its core Search, Mail and Messenger services, then Yahoo has failed. The Web 2.0 media helps drive the adoption in Web 2.0 tools. Just ask Google, Facebook and Twitter what the media has done for them.

If the media doesn't grok what Yahoo is trying to do and then agree that these improvements are important enough to make them start using Yahoo, or start using Yahoo services they previously had not used, how can Yahoo realistically expect consumers to adopt them?  

After reading TechCrunch's coverage of Yahoo's What Matters Most event, I can't help but conclude the estimable blog believes Yahoo has, as they say, jumped the shark. Siegler wasn't alone in condemning Yahoo. TechCrunch's Erick Schonfeld opened a post about Yahoo's status updates with" "When you are late to the game, trying to rename it doesn't win you any points." In a subsequent post about Yahoo's bid to enable video play in search results, Schonfeld wrote: "Now Yahoo is finally getting with the program. Today it added inline viewing to video search."

This ill-concealed contempt is dooming Yahoo, quote by quote, because it compels and reinforces users to believe Yahoo is finished as an innovator. If Yahoo can't sell itself to the media, how can it sell itself to the consumers who don't know any better?

I did not attend the event, though I participated via phone and saw the demos via a Web conference from my laptop. I thought the demos were well done and showed promise for Yahoo. I think Search Pad is a fine Web annotation tool and was pleased to see it moved to a more prominent position on top of the left-hand rail. Yahoo needs these tools to keep users from fleeing for other Web services.

Whether or not other providers had these tools first would not be so important if not for the fact that media likes to make a big deal about first-mover status. Yet quality counts for something. Having a product that keeps users engaged today is better than the product that kept users engaged yesterday.

Sullivans Death Knell for Yahoo Search

Larry Cornett, vice president of search products and design at Yahoo, gushed about Yahoo's newfound ability to enable YouTube video to play right from the search results: "That is true task completion. That is when a user is happy. This is what they really want. They don't want a bunch a links that go off and explore a bunch of pages. Bring the information to them."

That made sense to me, but who cares that Cornett is gushing about his new babies? Why not hear it from a search engine expert's point of view? For that, I turn to Search Engine Land's Danny Sullivan, whose "Yahoo's New Search Clothes - But Will It Help? (Probably Not)" offers another kiss-of-death on Yahoo's search services.

While comments from Siegler and Schonfeld toward Yahoo tend toward the sarcastic, Sullivan's acid bath for Yahoo is more subtle. He describes Yahoo features in complimentary terms such as "cool," "neat," "nice" and "awesome," only to turn around, often in the same sentence, to dismiss the features for one reason or another.

On the video playback feature, Sullivan noted that it "has a nice 'wow' factor, but it's hardly unique, not something Yahoo's two rivals couldn't do. As it happens only in a drill-down option, perhaps it won't even get used much."

What are we to think of Sullivan's purposely conflicted characterization of Yahoo's new features? It is the equivalent of a group of friends describing a mutual acquaintance they don't like as "nice;" the acquaintance is so patently unlikable that a verbal insult in such a setting would seem coarse and vulgar.

Sullivan, who has written a eulogy for Yahoo Search, now writes as though he looks down on the company. This is Yahoo's fault; it has done nothing to inspire the men and women who cover the company to think and write positively about it.

I have enjoyed watching Yahoo and Bartz cast off (or try to, as it were) the torpor that saddled the company under Yang's reign. I cannot find fault with Yahoo's new Search, Mail and Messenger upgrades. As long as Yahoo's search services compel people to keep coming to Yahoo, I won't wring my hands that Yahoo has "given up" on search by putting Bing on the back end.

The media digerati may care that Bing is powering Yahoo; the millions of other Yahoo users won't care at all. But that may not matter because no matter what Yahoo seems to do, the media finds fault with it. The media won't let Yahoo live in peace; there is a pack-mentality schadenfreude to all of this. Where does it come from?

Maybe the media wants Yahoo to go away because it's, well, it's old for an Internet company. Maybe the media looks at Yahoo as all that's clunky about Web 1.0 applications that work alone, walled off from other apps in a Web 2.5 world that is obsessed with the notion of Web services that interoperate with, well, everything. There is very much a Twitter rocks/Yahoo sucks thing going on.

Those of the morbid persuasion will say Yahoo has been dying for five years. I'm not going to argue that point here. What I see is a company that was supposed to be turning around under Bartz, but appears to be on the same fateful course it was clearly on under Yang's stewardship. The media won't let it fly straight.

Barring any earth-shattering product announcement, Yahoo is dying a slow death, and the media is assisting in this sad suicide. Yahoo: Do not go gentle into that good night. Announce something bold and announce something big because the media is burying you one shovelful of words at a time.  

Rocket Fuel