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What Went Wrong At Yahoo
kjh1 writes "Paul Graham writes about what he felt went wrong at Yahoo. He has first-hand experience — his company, Viaweb, was bought by Yahoo and he worked there for a while. In a nutshell, he felt that Yahoo was too conflicted about whether they were a technology company or a media company. 'If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.' This in part led to hiring bad programmers, or at least not going single-mindedly after the very best ones. They also lacked the 'hacker' culture that Google and Facebook still seem to have, and that is found in many startup tech companies. 'As long as customers were writing big checks for banner ads, it was hard to take search seriously. Google didn't have that to distract them.'"
Nothing went wrong at Yahoo because Yahoo never had anything of value to sell. It was all Internet bubble hype. They had a semi-decent email offering and a web catalog. It's amazing they did as much as they did.
These posts express my own personal views, not those of my employer
No. I read it as no one at Yahoo considering it a serious technology company because of a fear of taking on Microsoft, so they didn't bother hiring decent programmers.
"Always forgive your enemies; nothing annoys them so much." - Oscar Wilde
'If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.' This in part led to hiring bad programmers
Did anyone else read this as, they hired lousy programmers so they could compete with Microsoft?
I read it as: Yahoo bought a Mary-Kay Pink colored car so that Microsoft wouldn't steal it if they had to park on the street.
Or, you could read the article, where he mentions his suggestion to the brass to buy Google in the late 90s, and Yahoo's complete disinterest in doing so because they considered the search business to be mostly irrelevant.
I remember the days when Yahoo search was the only search engine you worried about (97 - 2001-ish).
This reads as a cautionary tale about being a first mover. You may be on top one day, but you are trading the flexibiltiy of a start up for predictable lines of revenue that may not last. There are times when it is better to let someone else go first and build your strategy around what they are doing wrong.
M
Now, I'm not meteorologist, but I think comparing Google to a hurricane is a piss poor comparison.
Google came to be because there was an opportunity in the market, and a very large one at that.
Saying that "Google happened" like it was some inevitable event pre-planned on the timeline of the Earth is a very poor reason for why Yahoo failed.
Yahoo, in every thing they've done has had the upper hand, and let it slip away. They grab a market, and fail to innovate beyond that. They get greedy with big checks from advertisers and can't see beyond that.
I've been watching it for years. Yahoo lets another one of its markets or products just slip away as they refuse to innovate, and let another company sweep in and take it away.
Not taking a $33/share buyout from MS, with Google snapping at your heals? But hey, you got to thumb your nose at the evil MS, right? Of course, it was at your shareholder's and company's expense.
SJW: Someone who has run out of real oppression, and has to fake it.
So, when Google came along, people climbed onto the roof of Yahoo headquarters and waited for the government to bail them out?
But seriously... the problem for Yahoo, and a lot of other companies, is/was as stated in the summary: They don't know if they're technology companies or media companies. Yahoo, Google, etc, are basically ad agencies which use their free services to honeypot people into their advertising ecosystem. I think Yahoo knew it was a media company when people thought they were a technology company, but didn't realize people thought they were a tech company. Google seems to be playing the "oh, we're just an innocent tech company making cool innovations n' stuff" game better, and minimized the impact of their ads.
Consequently, Google has become an advertising and content behemoth while people are still going on and on about how cool their "products" are. It's fucking stupid.
I disagree, I'd call failure to react properly to changing circumstances something that went wrong. Google didn't hit like a hurricane but grew steadily into a giant. Spending years hiring mediocre developers developing mediocre products and not being sure of the direction to take the company isn't exactly the business equivalent of a flash flood. I don't see any Yahoo executive saying "it all happened so fast, just *WHOOSH* all gone".
I remember when the WWW was still nascent back in the early/mid 90s. Yahoo was the premier destination for me - the one portal that was always in touch with what I wanted. Then came Excite and others.
Could it also be that the other companies mentioned are largely using Linux, which engenders a sort of "hacker" culture. Yahoo historically has been a BSD-centric company, and the BSD guys I know tend to be far more conservative and less "hackerish". I don't know if the platform has anything to do with it, but a lot of guys and girls that consider themselves hackers tend to be in the Linnux camp. I could be off base here, but I think the underlying toolsets engender a certain mindset among those users.
Correct me if I'm wrong but what "hacker" culture does facebook have. Somehow I can't connect social networking and stupid flash games to "hacker" culture.
As a lousy programmer and ex-Yahoo employee, I can confirm this.
The only thing I remember about yahoo was back in 1995-96 when it was nothing but a single webpage with lots of links maintained by some chinese guy. Essentially that's what it remains..
did you forget to take your meds?
If you walked around their offices, it seemed like a software company. The cubicles were full of programmers writing code, product managers thinking about feature lists and ship dates, support people (yes, there were actually support people) telling users to restart their browsers, and so on, just like a software company. So why did they call themselves a media company?
You'd see the same thing at an insurance company, auto company, or any large company that has large in-house development department. And yet, they're not conflicted about if they're a tech company or an insurance company.
Here's a hint on how to decide. How are your revenues generated?
Sell software, hardware, algorithms? Tech company.
Sell advertising? Media company.
Yahoo! Is a media company and so is Google.
It's not rocket science.
RIP America
July 4, 1776 - September 11, 2001
I remember switching to Google back in the day (28.8) and it wasn't because Google was giving better results it was because the Google page would load substantially faster than the Yahoo page.
What universe did you live in? There was a little thing AltaVista in that time period.
Indeed: as I recall, the `Yahoo! search-engine' *was* AltaVista (with Yahoo! decorations, but a little "powered by AltaVista" footnote at the bottom)--at least at some point; I think there were different back-ends that they used at different points.... Yahoo! may have actually done their own thing for the last few years, but only for the last few years.
-rozzin.
So if they had bought it we would have no Google, seeing as their completely disinterested in search. It's swell that Paul realised its potential though, and if only it wasn't for those rotten managers he would have gotten away with it!
Service
1) when google came out and I first heard of it I thought wow what a silly name.
2) I got past the name and tried it to see how it was different.
3) It was immediately obvious it was better compared to yahoo.
4) I stopped using yahoo and other search engines immediately.
Customer Loyalty
1) I told my friends and family about google (I rarely suggest anything)
2) I've had issues with some things google has done over the years but nothing major enough. (I dont use chrome all that much because I don't see it as a far superior product compared to firefox. At least not in terms of Google vs Yahoo when it first gained popularity)
3) They've built up a certain level of trust that I don't associate with many companies.
Management
1) I wouldn't go as far to say they are charismatic but I would say they have a ideology that appeals to some people that could make a lot of money without the help of google but still decide to work for the company.
2) I've used their service and I'm a loyal customer but the only thing I have to go on for their management is what I can infer from news. But I still think management was a key part to their success.
It is surprising how many /.ers keep repeating the nonsense about Goole being an Ad agency.
Are ABC, NBC (SKY, ITV and others in the UK) ad agencies? No, of course not, they arent. They are TV companies that support their broadcasting activities by means of advertising, and obtain a healthy profit at times for it, but they do not organize the advertising campaigns of anybody, they just sell slots of time according to demand in order to make money.
Google is a tech company, they study the data, and increasingly the metadata, and the interaction of people with them, arrive to conclussions, and monetize that knowledge.
Advertisements are one way to monetize that knowledge, but there are so many other ways to take advntage of it that it is scary.
A proper advertisement agency will provide a complete package about how to present a given product and will organize a campaign for you. Google by no means does that.
But go on, keep repeating this nonsense, it is a meme that clearly is sticking around here.
Yes, but they'll actually be looking down from 10,000 feet in their company-owned Gulfstream jets.
You might think those people are incompetent, self-important douches, but by some measures they're doing something right.
Probably none of you youngsters remember this, but Yahoo! initially didn't do search as much as handmade lists of interesting sites. To make it into their search results your page would be evaluated by a member of their staff. Talk about quality control! In a sense it was an early, massive, blog. I'm not saying that it's a good business model but it was good for the end users. They went away from that model and to spidering the web like all their competitors. Ten years later they're on life support. Coincidence?
Now Get off my lawn!
Kind thoughts do not change the world
Oh really?
Do you remember the internet around that time?
We had AskJeeves, Astalavista, HotBot, Yahoo, Ilse and a pile of other searchengines. Google was one of the pile.
Later google released gmail. We had millions of online email providers, hotmail was really hot that time with MSN-chat integration and your profile page (taking a throw at MySpace)
Google did bring innovation in searchresults and found a way to neatly advertize. But most of its funtionality was very much already existing. They played the same game as alot of others at that time, but just slightly better.
Every large cooperation at a certain point starts to work profit driven and do get greedy in a sense. I doubt someone sat at Yahoo thinking "ok, this is slipping away", no they thought they were doing the thing generating the most profit.
Alot of older softwarehouses have a product, they (suits) milk it for years to come and just "innovate" as necessary, not beyond that.
I think we can keep recursing like this until someone returns 1
Oh really?
Do you remember the internet around that time?
Just because there were a bunch of search engines at the time, that doesn't mean that there wasn't a large opportunity on the search space that none one else did to the extend they did: For one, most of the contenders at the time were embedding their search engines in portals. Google did not. Secondly, and most importantly, the great opportunity that no one exploited until Google's time was the ranking of pages for the purpose of searching as opposed to textual indexing (be it with inverted or forward indexes.) The PageRank (tm) algorithm exploited a market opportunity that was there for the taking.
A market opportunity is not something that occurs because there aren't any competitors. It is *that* which is not done or not done well by your competitors, even if they exist by the millions.
I'm an honest to god Yahoo! employee, so the coward goes without saying ...
Yahoo! does have a ton of good ideas, and over the years, has learned to snap up better and better people.
The problem that Yahoo! has had, and still has today, is that it doesn't know what it wants to be. And, as a result, does about a thousand different things simultaneously. Completely half-assed. They grab a certain idea or market, latch onto it, investing and innovating ... then suddenly, they stop thinking it is a priority, and they stop focusing on it. Low and behold, another company comes along, many of them sporting ex-Yahoo! employees or students that Yahoo! rejected, doing the exact same thing that Yahoo! is or was doing, only better or tweaking it, just a tad. It becomes a success, because its their sole focus, while the Yahoo! product falls even more by the wayside.
That is Yahoo! ... they half-ass everything they create, because some other new thing comes along and captures their interest. It makes Yahoo! a clusterfuck of products and services, technology and media; where one portion of a product works as intended but another interlocking piece is a huge pile. If you question that sentiment, look at their homepage. Host a site on Yahoo!. Use a paid product.
Yahoo! is a great way to point your parents, maybe your grandparents. Yahoo! has every opportunity to be a great company, even today. They just need to finish one product at a time, focus on one segment of the market per department, and honestly, honestly after all these years ... decide what kind of company they want to be.
I doubt it will ever happen without some change in the leadership of the company. The board of directors ... all old people, all business-focused, all seemingly lacking the spark of ingenuity. They have aged, they're old people who think they're hip, but really they're just unwilling to take risks or attempt the new. It shows in everything they do and every product they touch. I have hope for Bartz, she seems to have a good head on her shoulders ... but with Yang there, waiting in the shadows, still pulling the strings, Yahoo! seems doomed to fail.
Yahoo news stories used to universally take comments from readers. They were actually early with this, but then they cut it off. Fear of lawsuits is all I can think of. Now almost every news outlet on the web lets you comment on the stories. The legal staff and management at Yahoo simply hadn't the balls for even the slightest amount of risk.
They've also become the poster child of bad web design. The mail login goes through changes every month. They're not an improvement. Currently, you load 3 pages of noise filled unread ad droppings before you can actually log in and look at your mail. They used to have an easy to use weather and TV Guide. The were changed from simple, usable HTML pages to automated, advertising filled junk that made them almost unusable. Then they didn't measure the amount of use after the changes and modify accordingly. In fact, I doubt if they pay significant attention to users at all.
And they're just *sloppy.* I don't know how else to describe a company of that size that can't even keep its comic pages updated consistently.
Google, in contrast, has a clean look, usability and no ad droppings randomly scattered on pages.
And they have one more thing. Success.
Please do not read this sig. Thank you.
You're probably right. I worked for an outsourced company that did tech support for Yahoo - Merchant solutions (ecommerce) and Yahoo web hosting. The free sitebuilder program really sucked bad. It was written in Java, so I often had to deal with customers who just bought or built their own brand new, high-powered computer, only to have it drop to its knees after installing sitebuilder. It was extremely slow, and full of bugs. We regularly had extremely hostile customers call in and threaten us with everything under the sun. One customer even took down his own home page content and replaced it with a very ugly paragraph about how bad Yahoo is, in bolded, oversized text no less, and left it up there for several days. Another one called us incessantly for an entire day in a feeble attempt to tie up our phone system. Another customer threatened to find us (we weren't allowed to tell customers who we really were, nor what our true address was) and "take us out". I would look at a customer's home page that they just built using sitebuilder, then validate its html code, (http://validator.w3.org/), and it would literally have hundreds of errors in it. Just now, I validated www.yahoo.com, and the results are: 162 Errors, 33 warning(s) for "Errors found while checking this document as HTML 4.01 Strict!". Yahoo is a crappy tech company that doesn't eat their own dog food.
I read an article about Yahoo on their tenth anniversary. It bragged about how Yahoo's goal was to always remain profitable and that's why they were able to remain viable, while so many other internet companies went down. At first, I thought that was brilliant in a time when so many other companies were biting the dust because they wasted so much money. But then the reality of what their goals are really struck me - all they cared about was money, and not their customers who were paying them.
In the ecommerce dept, they bragged about having a $3 BILLION dollar annual revenue, but I regularly saw them screw their customers over big time. If a guys account/site couldn't be fixed at level 1 tech support, then they transferred the call up to tier II - standard procedure. But if tier II couldn't fix it, the ticket had to be escalated up to the engineering dept and woe unto them! It usually took 1 - 3 WEEKS to get it fixed!!! To the best of my knowledge, it is still that way. Even if the customers entire website was down, it didn't matter. I heard that they only had 2 or 3 engineers working there to fix thousands of escalated tickets. No wonder it took so long. The longer it took to fix, the more Yahoo would lose money because they made money by getting a percentage of the customer's sales, so if the customer's site was down, both of them lost money. On top of that, they would not even offer an apology, or reimburse the customer for their lost business. Some customers even went out of business because Yahoo took too long to fix a high priority issue. In contrast, one time I had my own site hosted by a local web hosting company selling some stuff, and I verified one morning that my site was down, and it wasn't my computer, internet connection, etc, so I sent in an email to tech support. In 2 minutes, I received an automated response acknowledging my issue and it informed me that some techs were working on the issue. In 15 minutes, I got another email from the techs themselves telling me more details about what went wrong and that they will have it fixed soon. In less than 3 hours, my site was back up and running! If a small web hosting company can do that, then a multi-billion dollar company can do that too, BUT THEY CHOSE NOT TO, so I don't feel sorry for Yahoo. They shot themselves in the foot.
Yahoo was only interested in grabbing more customers and not keeping the ones they had and they made some very stupid mistakes as a result. Like one time they had a web ad for their merchant solutions ecommerce, bragging about how good they were, but when you clicked on the link to see what customers h
Yahoo mail is an example of doing it wrong. No offense, but when my small team at a university can come up with better spam defenses than yahoo has in our spare time, yahoo has a problem.
Do you remember the internet around that time?
Do You?
Yahoo was an index, not a search engine. Altavista (not Astalavista, we're not trying to find warez) was the best / most popular actual search engine became the provider of search results to Yahoo as early as 1996 - Yahoo was not in the search engine business they were in the portal / media business.
Altavista was popular because of its minimalist interface, and because their crawler was fast and indexed much more of the web than anyone else had at the time. What Google did was come along and provide the minimalist interface, crawled as much or more of the web but on top of that it gave results what were much much more relevant than Altavista, AskJeeves, etc. There was absolutely a market for a better search engine at the time and Google seized it, which is why they became so dominant so quickly - it was hardly "slightly better" - it was way way better.
Do you even know anything about perl? -- AC Replying to Tom Christiansen post.
I don't know, but having used Yahoo Store, I think one of their mistakes was buying it from Viaweb.
-73, de n1ywb
www.n1ywb.com
Thanks for the insights. I've never seen anyone so committed to using the "!" in the Yahoo name and I gotta say, it's really, really irritating.
Are you trying to say that the reason Yahoo hasn't been more successful is that their employees, led astray by the bad educational system, are lousy at math and this affects Yahoo's performance?
Or are you just replying to the wrong story?
...the future crusty old bastards are already drinking the Kool-Aid.