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4 Lessons Southeast Asian Entrepreneurs Can Learn from Yahoo’s Collapse

One of the oldest tech giants couldn’t keep things afloat even with the promise of a new CEO

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BY Melissa G. Bagamasbad - 18 Apr 2017

PHOTO CREDIT: Getty Images

Most people grow nostalgic when thinking of Yahoo Messenger (YM) and how they spent many hours chatting and updating their statuses with smileys while using the application. Many also remember how their first email address was under the Yahoo platform. But the brand that has been a part of many everyday lives has not been able to keep up with the times. Verizon has bought the company for $4.83 billion with changes taking effect this first quarter of 2017.

Below are some key points that entrepreneurs can take away from the experience.

 

1. Adjust to the times

“Yahoo was a veritable old guard that failed to find relevance in the quantum-paced innovation-driven IT ecosystem,” says Bim Santos of Bloomberg TV Philippines. “After finding early success as a search engine in the early days of the Internet, it quickly lost ground to the better and cleaner approach of Google.”

In a way, this can be likened to Nokia which also failed to adapt to changing circumstances, such as the rise of the smartphone, and was eventually beaten in the mobile industry by heavyweights Apple and Android.  

 

2. Build a solid product that would differentiate you from competition

Santos says Yahoo was not able to provide a solid product that would differentiate them from other brands. “[They] failed to deliver any solid product that would have differentiated them beyond their initial search identity and make a mark among the fickle millennials which are the core demographic of the Internet,” he says.

There was an attempt to focus on mobile, which seemed promising at first but even this didn’t work out. “There was a promising trajectory initiated by CEO Marissa Mayer to focus on mobile and even ramp up content, shown by the activation of localized news bureaus in different countries and hiring of Katie Couric as a global anchor, but things unfortunately didn’t pan out probably for a variety of reasons such as poor management, flawed strategy, or perhaps the content market was just slowly being co-opted in large part by Facebook.”

 

3. Maintain focus

Justin Hall, principal at Singapore-based Golden Gate Ventures, says Yahoo never really seemed to have focus. He says, “I don't think Yahoo ever really found its strategic direction: does it focus on search, does it expand its content offering, does it position itself as a media conglomerate, or perhaps go in some other direction?”

Hall believes Yahoo spread itself too thin. “I feel that Yahoo's inability to focus and improve on its core competencies and instead spread itself thin on multiple products meant that it became subject to competition from too many challengers,” he says.

 

4. Build a culture of trust

Being the face of Yahoo, Mayer’s every move as CEO was scrutinized. “It did not help also that there were a couple of reported boo-boos from Mayer, such as being late for appointments after oversleeping, that did not help company optics,” says Santos.

There was also plenty of criticism regarding Mayer’s leadership, from encouraging her superstar status to conducting secret layoffs. “From the moment she left Google, Mayer seemed more concerned with building her own brand image than working on Yahoo's problems. The time for her to raise her public visibility was after she'd fixed Yahoo, not while it was a work in progress,” says Geoffrey James, in his Inc. story.

Mayer was said to execute clandestine layoffs to avoid bad publicity. “Nobody knew who would be next or why someone might be laid off, creating massive, pervasive, justified paranoia,” says James. To make matters worse, he adds, Mayer publicly announced to the entire company that layoffs were over, and then reneged and started them all over again. James says that Mayer’s deception eradicated her credibility.