Sunday, September 30, 2007

The Yahoo train wreck?

Analyst Henry Blodget calls Yahoo's declining Comscore numbers "an absolute disaster", says the company is a "train wreck", and predicts that "if the company can't reverse this trend in short order, its only hope will be to sell itself."

Yowsers. It's not all that bad, is it?

Like Microsoft, Yahoo may have been a feeble competitor lately, often appearing distracted, slow to react, and unable to do more than follow in most areas.

Yet, like Microsoft, Yahoo remains an giant in the field. In fact, not only does Yahoo have second place market share in many Web products, but also, according to at least one study, Yahoo has the strongest search brand around.

Yahoo's biggest problem at the moment seems to be that they try to do too much and end up doing nothing well. Even in their core business of advertising, they are playing second fiddle to Google. There's no reason for people to use the second best when switching costs are so low, but Yahoo seems bizarrely content to stay behind the leader even as it sees its audience trickling away.

There are as many opinions on what Yahoo should focus on as Yahoo has products, but, I have to say, I am amazed Yahoo has not done more with personalization.

Yahoo has hundreds of millions of signed in users with long histories of what they wanted and enjoyed. Rather than chasing Google's tail, they could lead in personalized advertising, search, e-mail, and news. Yahoo could use their knowledge of what their users need to focus attention, surface relevant information, and be as helpful as possible.

It is something Yahoo could do better than anyone else and would make Yahoo different. As Jeff Bezos used to say about Amazon, when shoppers try other stores, the experience should seem "hollow and pathetic". "Why doesn't this store know me?", shoppers should ask. "Why doesn't it know what I want?"

Yahoo should be the same way. Yahoo should know you. Elsewhere, the experience should feel vaguely unpleasant, like jumping from talking to your friends to being alone in a group of strangers. "Why is this site showing me that?", they should ask. "Doesn't it know I don't like that?"

Please also see my earlier post, "Yahoo post-Semel and the long road ahead".

Please also see my May 2006 post, "Yahoo home page cries out for personalization".

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