The sale of this company Verizon finished seal the fate of one of the seminal companies in the digital era, he did not know how to reinvent itself with the entry of social networks and mobile technology.
for some time, talk about Yahoo is a bit like an obituary in advance, as you watch the sinking of the Titanic in slow motion, very slow. Monday Yahoo was sold to Verizon and its core businesses will be merged with AOL, a competitor of life.
For more than half a year this has been chronic, with an almost assured end from the beginning, how one of the largest Internet companies , founded in 1995, came to pique for not knowing exactly what it is or where I was going.
The details of the sale are being filtered from late last week and on Monday the Bloomberg website and Recode revealed first price Yahoo: US $ 4,800 million by a company that in its moment of greatest glory, came to be worth US $ 125,000 million .
But that glory came and went and the company began to suffer enormous pressure having to reinvent itself in the era of social networks and mobile applications
by the beginning of this century, the traditional way to access the internet going through pages and, better yet, portals. sites in which all services offered online life thronged to time. Yahoo, then, was a kind of synonymous with the Internet with its vast range of content ranging from the search and mail, to shopping and sports to reach news.
The big change Internet was perhaps the fragmentation of this experience and the advent of mobile technology. It is no longer trying to be the great company that dominated everything, but to offer great service in a few key sectors and from there grow. It was the model Google , which almost from the beginning offered a better search engine than Yahoo, and also the Facebook , which opened the way towards social experience.
Just as Google and Facebook were staying with market share of Yahoo, so they did Craigslist, eBay and Amazon , all companies that grew from a niche up.
“Google has its search engine, Facebook has the social network, Amazon has its platform of e-commerce, but Yahoo tried to reach their level without having a solid core business to support it If your strategy is to be a giant. then you need to grow up, and Yahoo was not dominant enough in the markets in which it chose to focus, “says Michael Wade Cisco representative in the” Digital Business Transformation “and professor of innovation and strategic information management at IMD.
With all its problems, the company still manages to attract a monthly audience of 1,000 million users. The thing is that Yahoo takes at least a decade in which he could not find a direction as to convert the popularity of the services offered by the site lucrative business. Between 2007 and 2012, the company changed four times of CEO until he managed to engage Marissa Mayer , one of the executive star of Google and who came to the company with the mission to wake the giant.
Until the arrival of Mayer, in 2012, Yahoo did not seem to know much what kind of company it was: a producer of content (television, technology reviews, photography), a search engine, a mail service mail, a provider of online maps. Perhaps no one service company that does not have a strong competitor and probably not under the umbrella Alphabet (matrix Google company), just to mention a name.
Mayer devoted much of his energy to try to revive the search , led a redesign of Flickr (a kind of precursor of Instagram, if you will) and opened production units of content, video mainly on issues such as travel, technology and gastronomy. It also acquired the blogging platform Tumblr , in a move that was described as a master at the time (2013) and that cost US $ 1,100 million to Yahoo. Apart from this site, Mayor acquired more than 40 small companies during his tenure as CEO of Yahoo.
But none of these moves seemed to have greater impact on the financial resuscitation of Yahoo, for although there is an audience significant, advertisers continued sinking their budgets in the usual places: Google and Facebook; here it is clear that the search engine Yahoo runs on technology Google and there is an agreement to keep this scenario until 2018.
And in this whole equation also have to talk about Alibaba , Chinese e-commerce portal in which Yahoo has a 15% stake, which is valued at US $ 31,000 million.
“that was the ultimate sin of this aspirational giant, not big enough. yahoo ended in a slow, plodding death, leaving a large range of US $ 45 billion of Microsoft; maintaining a succession of CEO’s ineffective ended with the disastrous performance of Marissa Mayer, and a series of useless acquisitions plus multiple effects rebranding “says IMD professor.
for December last year, Mayer presented a plan to exit Alibaba shares and there they concentrate on reviving Yahoo. The executive strategy was to transfer the money from the sale of Alibaba, along with a service unit for small businesses, to a new company to be called Aabaco. The idea behind this move was to give money to investors Yahoo to win so a little more time and try an espresso reinvention of the company.
The board said no to this plan and, since then, they began to sound the rumors of a sale of Yahoo. By early December 2015, Lowell McAdam, CEO of Verizon Communications, said his company would consider acquiring Yahoo, if the company went on sale.
The problems of Yahoo were not only technological , tied to changing internet and audiences, but also have much to do with its management. And a significant portion of this has to do with the same Mayer, who has been described as authoritarian and tax.
Employees of the company, always speaking on condition of anonymity, they take a couple of years calling as stubborn and egomaniac in a long series of publications in which episodes like this can also include: the executive was about to withdraw an advertisement because he did not like the user experience, regardless that only that piece gave about US $ 70 million a year in profits.
to January this year, at least 16 top executives of Yahoo had left the company , including Jacqueline Reses, development manager, and Kathy Savitt, who was in charge of the video strategy of the company, one of the sources of growth in the content area.
What will happen now?
After this sale, it is expected to integrate Verizon Yahoo with AOL, one of the major brands of the web, and it acquired in 2015 for US $ 4,400 million. However, the deal will not be closed but until the first quarter of next year. Intermediate in which Yahoo will continue to operate independently
“We have enormous respect for what Yahoo has: this operation is to unlock the full potential of Yahoo.” Armstrong said , CEO of AOL Verizon said in a statement.
Meanwhile, once completed this possible union, you may Verizon decides to close the e-mail service, news websites , finance and sports as well as advertising tools lass Yahoo, changing its name and laying off a large percentage of its staff. As for Mayer, it is expected to return to work with the CEO of AOL, Tim Armstrong, who was his partner in Google years ago and tried, unsuccessfully, to convince her to combine both companies when they were independent.
“personally, I have intend to stay. I love Yahoo and I believe in all of you. it is important for me to see that Yahoo through its next chapter,” said the current CEO of Yahoo in a statement. However, most analysts expect the sale of Yahoo mean the end of the reign of Mayer.
* With information from El Espectador, Excelsior and IMD.
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