Analysing the brand alone, Yahoo! has lost its lovin
feeling and is looking positively shaky
Jack Yan is founder and CEO of Jack Yan & Associates and
president of JY&A Consulting.
YAHOO! may be the number-one destination on the internet, according to Alexa
Internet, but how long might this last?
There have been, of course, criticisms that Yahoo! is just
a big shell. It doesn't own its own content but licenses others'. In fact, it
provides a brand to others as a seal of approval. The logo looks antiestablishment
and for a while, the Yahooligans were the talked-about geek cool.
I've used Yahoo! since its founders were still at Stanford
University and put personal messages on the site about its growth. And for a
long time, I thought of Yahoo! as the business. I remembered its brand as an
internet one long before I could remember any of the others that are big today,
such as Qualcomm or Google.
I don't think there's anything wrong with licensing your brand
and not doing much yourself, providing you live up to that brand promise. Cast
your mind back to the last time the United States bombed Iraq based on prior
UN resolutions without getting additional Security Council unanimity: 1998.
President Clinton was in the White House and by and large the media and public
thought it was OK to do what Bush is doing now in retaliation of Saddam Hussein
kicking out the weapons' inspectors. Better having violence than hearing about
Monica Lewinskyeveryone thought so, except the Republicans and Linda Tripp.
The world was certainly different.
How else was it different? AltaVista had a search engine and
was pretty much overtaking the rest of the web properties. I stopped using Yahoo!.
In fact, I don't think I have been to its home page since, with the exception
of popping by to help clients out.
AltaVista had the Entertainment Zone, run by One Zero Media.
This Massachusetts-based company provided content that AltaVista simply branded
its own and it helped ensure loyalty. The company didn't go beyond its means:
it could handle its responsibilities. One Zero gave AV a bit of an edge. We
liked it, so much so that one of my companies provided content for it.
AltaVista, of course, gave way to better search engine technologies.
It's easy to be wise after the fact, but at the time, I don't think many could
have predicted how the king would fall. Looking back, maybe it should have expanded
its licensing to retain loyalty and become a dominant web brand.
Yahoo! wasn't going down that road. It had a brand to leverage:
one of user-friendliness. It had amazing brand recognition and loyalty. So it
decided to charge for inclusion into its directory and made some more money.
It acquired other properties online, including Geocities and eGroups.
eGroups was a nice company specializing at providing a discussion
group interface for the public. It had an amazing audience base. It wasn't surprising
that it would be absorbed into a bigger company during those heady days.
But a glance around Yahoo! shows how it's lost that slightly
edgy lovin' feeling that it had when it was the upstart trying to get recognized.
Once upon a time, Yahoo! Full Coverage provided news articles
from a lot of sources, both establishment and independent. I visited it a lot.
For a long time, the fashion and automotive pages that I visit feature news
from The New York Times and Reuters. If I wanted them, I'd go straight
to the source rather than waste my time at Yahoo! News. These days, I go to
Some running a Yahoo! Group (née eGroup, formerly
Onelist) might tell you that the support there is nearly non-existent. After
one of my groups was deleted unilaterally by Yahoo! without any explanationit
was spam-free and trouble-free since February 1999there was no way I could
communicate with anyone at Yahoo! short of issuing a lawsuit. The help pages
are unhelpfulif you need this sort of help, of course your issue isn't
a standard oneand any response I got via email told me to go to the help
pages. Messages on the site advising me to visit [email protected] resulted
in an autoresponse. If Yahoo! is top of the tree, where is the money going?
I can't see it going to people because I haven't heard from anyone inside there
for a long time. And people, ladies and gentlemen, is what made Yahoo! top property.
I can imagine the scenario: folks are going to work in the Bay Area into a darkened
room labelled Yahoo! and were never seen again.
If there's apparently no one inside, then how can we expect
it to support anyone outside?
As any branding adviser will tell you, brands are top-driven.
They flow from top management to the staff to the external audience. In other
words, folks inside have to live the brand proposition for the organization
to be useful. If youre laying off people to make your shareholders happy
for one quarter and make them sad for several others, its not much of
a trade-offnor is this particularly useful branding behaviour. Leaders
are there for a reason and its not just to look after shareholder interests:
its to ensure the dignity of the people who look to you for guidance.
In the last six months, criticism of Yahoo! CEO Terry Semel,
hand-picked by co-founder Jerry Yang and formerly of Warner Bros. has been more
vocal. In Ralph Kings words in Business 2·0 in last Octobers
issue: He scored early points with employees by investing $17 million
of his own money in Yahoo. But now he's 16 months into the job, and there's
a growing sense among people inside and outside the company that Semel was miscast
for the role of rescuing Yahoo. Many employees say his aloof, bureaucratic style
has demoralized key personnel. He has been unable to pull off any grand Hollywood
link[-]up or other dramatic strategic initiative. He declined Kings
request for an interview. Oh, he has a chauffeursomething that a Yahooligan
wouldnt ever stand for.
If Yahoo! is edgy, fun and useful, then it needs to live it
at every corner. Apart from Yahoo! Mail, which I still hear is tolerable, there's
little to draw people there. Amongst its staff, King notes that morale is down
and the parking lot is empty before dark.
Email access will get cheaper and there will be less call
for webmail services like Yahoo!'s, we feel. Smaller players will open up again.
Directory services will also become more fragmented, opening up room for a real
challenger to Yahoo!and I don't just mean the Open Directory Project but
something that is properly marketed. There have been portal attempts that have
failedremember how much hoop-la accompanied iWons launch? But it
is all very possible.
So now that Yahoo! looks like a tool of the establishment,
what will happen?
Smarter Gen Yers will probably desert it: they can find other
services, being very web-savvy. Semels announcement of a rise in visitors
may have been fortuitous, linked to Yahoo!s acquisition of HotJobs.coma
useful property in a time when people are being laid off (even Yahoo! staff12
per cent of its workforce has been cut)and Inktomi. If Gen Yers want establishment
stuff, they can find it elsewhere, too.
I reckon that the establishment has a bad rap these days because
they're seen as not particularly human and into their share prices: to wit,
Enron. People might be watching news on Iraq, but I don't think they've forgotten
the events of the past year (even if they have forgotten their reactions to
Clinton bombing Iraq).
So here's our prediction: Yahoo! brand equity declines and
it will give way to Google and Microsoft as one of the top three web destinations
within 18 months. It might even falter as a brand because it lacks the ingredients
that I say are required under my definition of the word. I dont need to
paint a picture of what this might mean to its share price. Within 10 years,
Yahoo! mightn't even figure unless it drastically reinvents itself or its business
practices. The rot is setting in as Yahoo! looks decidedly passé and
Google is setting the standard on the internet, both as a virtual brand and
an online hot property. For all of Google's shortcomings, we still say: Larry
Page and Sergey Brin, you're da men.
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