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Yahoo: The Decline and Possible Fall

Tech giant Yahoo has struggled to find its way over the last five years, rotating through four CEOs and a series of layoffs. Last week,…

Tech giant Yahoo has struggled to find its way over the last five years, rotating through four CEOs and a series of layoffs.
Last week, Yahoo confirmed that it was laying off 2, 000 employees, in what they said was an effort at re-structuring and to enable them to be better equipped to innovate as fast as users and the industry required. According to many however, for Yahoo, it’s a culmination of years of decline. Today, Yahoo’s workforce of 12, 000 or so employees is still significant and, if this attempt to re-focus is successful, could be beginning of a big turnaround for the online portal that provides services across a wide variety of categories including news, entertainment, business, business services, finance and multimedia.
Through the layoffs, Yahoo expects to realize about $375 million of annual savings. Yahoo also plans to take a $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. New CEO Scott Thompson will undoubtedly be painted as the bad guy here since he is the one responsible for the tough choice the company is making. However, Yahoo has not been on solid strategic footing for years. Yahoo’s been experimenting with its image since the mid-1990’s and its revolving door CEOs, and lost-boy founder Jerry Yang, didn’t help things much.
Way back when, there was no Google and Yahoo’s approach to the Internet, which was like a giant directory, seemed to get that the Web was more than just a gigantic bucket of words- it was content. But while it used to claim to be a Internet navigational service, Yahoo now says it’s a media company. Yahoo now thinks it’s a platform, though no one else does. No one is building apps for Yahoo. Yahoo builds for itself and people use its services.
Yahoo today is really, primarily, a portal to content (its own and third-parties), information and tools. Yahoo won’t describe itself that way because “portals” is very late 1990’s. “Platform” is so very 2012. Facebook is turning itself into a platform, Twitter was a platform, though it’s pulling all those third-party services back in, Google is a platform, though it tends to use its vast resources to build everything by itself. Not knowing what you are is, obviously, a big problem, one that Thompson may be trying to address with this staff reduction so he can finally see the forest for the trees and shift Yahoo from content back to “innovation“.
Except that Yahoo isn't dead yet. Unlike fast-fading BlackBerry maker Research In Motion, Yahoo has some underlying strengths, and there's reason to think that new CEO Scott Thompson is finally doing what's necessary to revive the company. Check out this infographic on the life of Yahoo! and leave your thoughts in the comment section below.

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