I try not to spend too much time looking back at history in The Drift (unless you count the arcane references to jazz legends and ex-presidents). But this week I want to use the space talking about the period of time during which Yahoo! ruled our world: not out of a sense of gauzy nostalgia, but rather because the history illuminates very current truths about our business today and tomorrow.
I’m now in my 23rd year in the digital advertising and marketing business: I sold my first web ads the year Yahoo! was born but before it actually launched as a website. So I’ve gotten to watch lots of cycles unfold, many companies rise and fall. Those whose perceptions of Yahoo! were shaped during the Marissa Meyer era can’t imagine the sheer domination that the company once enjoyed. Watching Yahoo! compete back then with the likes of MSN and a pre-Armstrong AOL was like watching the Harlem Globetrotters dismantle the Washington Generals for the umpteenth time. (Yes, Yahoo! was at the same time providing a cozy incubator for Google’s nascent search business, but few in the business really imagined Google as a threat to Yahoo! at that point.) Yahoo! was the center of gravity, the single most heavily trafficked page on the web. It was hegemony writ large. So what happened?
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Books have been written (and more surely will be) about the rise and demise of Yahoo! So here, during the week of Yahoo’s fire-sale to Verizon, just a few thoughts.
The Founders Chose to Live in Middle Earth. Jerry Yang and David Filo – but mostly Jerry Yang – neither fully committed to running the company forever (like Mark Zuckerberg at Facebook) nor ceded real control of the business operation to a competent outsider (as Sergey and Larry did with Eric Schmidt at Google.) This prevented the company from ever forming a real vision and started a parade of half-empowered CEOs and ambivalent decision making.
They Watched the Money and Not the Consumer. In terms of advertising revenue, Yahoo! crushed it year after year. This gave senior management too much freedom to muse and obsess about pet projects and the now-lost search battle with an emergent Google. Had the company been under existential financial pressure, perhaps they would have gotten closer to their consumers and where they were really going in the near future. A good crisis might have really helped.
Yahoo! Believed Tomorrow Would be a Bigger Version of Today. Each generation thinks the next will be a slightly different version of their own: a little more entitled, a little better with tech, a little less respectful, yada yada. And at the height of its dominance during a business era, it’s natural for a company to see the future as a little more mobile, a little more social, a little more video-driven, yada yada. Perhaps Yahoo! saw things this way? Perhaps they never considered a radically different world that ignored desktops and page views?
Yahoo! is now, in almost every sense, history. But in its wake, let’s consider whether our own companies might be unwittingly walking the same path.