There are a number of high profile articles on Yahoo! and what’s going on with the company that have come out in the past 24 hours or so:
Despite contrasting opinions, analysts and stockholders of Yahoo generally agree on what ails it. And there is a consensus that if it remained an underachiever, it would be a candidate for takeover.
The main problem is that Yahoo has not been nearly as good as Google at reaping profits from the huge volume of search traffic it attracts. Yahoo’s search revenue in the third quarter was $191 million, versus $911 million for Google, Mr. Post’s report estimated.
“Yahoo touches one out of every two people on the Internet every month, which is unparalleled reach,” said Randy Befumo, co-director of research at Legg Mason, which holds some 40 million Yahoo shares in various accounts, including funds run by Bill Miller, Legg Mason’s marquee mutual fund manager. Despite the fact that Yahoo actually has more traffic than Google,” Mr. Befumo said, Google has more revenue. “So there definitely is a problem with Yahoo’s monetization.”
Wall Street Journal (sub req’d):
It is called “The Peanut Butter Manifesto” — a four-page call to arms from a senior executive of Yahoo Inc., declaring the Internet company is spreading itself too thin and must define priorities and radically reorganize its management structure.
Now the manifesto has attracted the attention of Yahoo’s top brass as they scramble to boost revenue and protect the company’s status as the most popular stopping point on the Web for U.S. users, amid heated competition from Google Inc. and others. (Read the memo)
Yahoo, which consumers use for email, news and a wide menu of other services, is under increasing pressure to hold its top position. One analyst predicts Google will overtake Yahoo in users in 2007. Microsoft Corp. has stepped up its Internet activities, and Time Warner Inc.’s America Online unit increased usage recently by opening up free, unrestricted access for its services. Sites including News Corp.’s MySpace have rapidly gained visitors and attention from advertisers.
WSJ’s verbatim reprint of the Brad Garlinghouse “Peanut Butter Manifesto“:
I proudly bleed purple and, yellow everyday! And like so many people here, I love this company
But all is not well. Last Thursday’s NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call. But also a call to action. A clear statement with which I, and far too many Yahoo’s, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down - but rather the spirit and resolve used to get back up. The same is now true of our Company.
It’s time for us to get back up.
Brad Garlinghouse was described to me by a Yahoo! insider as “part of the solution, but also part of the problem.”
Companies need to debate and discuss strategy and be able to have an open and honest airing of different opinions. It makes that all the more difficult, however, when you’re such a high-profile (public) company in such a competitive segment and that debate is essentially going on it public.
Perception and reality are part of a feedback loop in the mercurial world of PR and media coverage.
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TechCrunch’s Michael Arrington offers a cynical (in the Greek sense) interpretation of Garlinghouse’s memo. Here’s John Battelle’s reaction to the memo.
