Yahoo! YTD 2012 – What the Heck is Happening?

Once a leader in the search engine industry, it seems Yahoo! has been overshadowed in the news by competitors like Google, Bing and Facebook.   (This is particularly true since Yahoo! ceded responsibility for its search algorithm to Bing.)   Additionally, in the last five years, Yahoo! has gone through an average of one CEO per year.   With so many changes in market positioning & management, one has to ask, “What the heck is happening?”   To answer that question, let’s look at a few major changes that have occurred over the past 12 months.

When he was still CEO in early April 2012, Scott Thompson announced major changes in Yahoo’s corporate structure. He decided that the company should be broken down into three segments: consumer, region, and technology.  The mission of the restructuring was to make Yahoo’s core business more consumer-driven.  This change included the layoff of 14% of Yahoo’s workforce or approximately 2,000 workers.  Shortly after Thompson announced this change, he was fired himself.  Yahoo! removed him from the company after he was accused of enhancing his resume to include a bachelor’s degree in computer science when he only received a bachelor’s degree in accounting.

After the removal of Thompson, Yahoo launched its new Axis Browser, which is available as an iOS and as an add-on on to Google Chrome, Firefox, Internet Explorer and Safari, with an Android app version in the works. Axis is very visually friendly, since it shows site thumbnails on its SERPs instead of traditional blue links but one has to wonder where this fits in to the company’s future, as browser development has never been a core part of the company’s DNA.   Little buzz has been generated about Axis since its launch.

In an attempt to satisfy shareholders and bring stability to the company, Marissa Mayer, the former Vice President of Google Local, Maps, and Location Services, was named as Yahoo!’s new CEO in July 2012. Mayer is currently focused on improving employee morale and corporate culture, doing things like establishing all-hands meetings every Friday and making the food from Yahoo’s URL’s cafes finally free.  She also plans to push Yahoo’s core products such as e-mail, Flickr, and search but initial reports are that “…it’s been more than eight months since the company had a clear direction to march toward, and it still doesn’ t.

If there’s something Yahoo! is getting better at, it’s personalization. Meaning, instead of focusing on serving up information and results from around the web, they are refining their position as a portal site by better targeting the information they present to their users. Interestingly, and in a somewhat anti-technology spin, what’s useful in their personalization is that actual humans sometimes override automated personalization filters. For example, the Yahoo! Today show widget on their home page might, statistically, choose not to promote Obama’s speech on Afghanistan but human editors will make sure it appears on your feed anyway. Part of me says they’ve got it right to focus on non-algorithmic signals but another part asks if this isn’t an odd form of information control. Perhaps Yahoo! will be the information provider that breaks through the paradox of personalized results, which keeps us comfortable and satiated with only familiar news.

Through all of this, yes, Yahoo! still has some influence in the search world.  According to comScore‘s July 2012 Search Share Report, Yahoo! search came in third in with 13% of market share, the same level held in June 2012 but off from a 16% market share one year ago.  With the leadership from a new, promising CEO and the launch of a new innovative browser, it seems that Yahoo! has taken its first step in repairing the company’s reputation both internally and externally.  If the company can hold on to its existing consumers, revise its corporate structure and refocus its brand and products, the tech giant has a chance to succeed.     Do I see it happening?  Honestly, no.  They’ve given up on their search algorithm and reverted to being an information portal with some technology initiatives and what seems to be an aging corporate culture.  Yahoo!’s best bet would be to get a high price per share in a sale…

Special thanks to PM Digital’s SEO Intern Peiyu Lin for her assistance in compiling this blog post!

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