The Truth From Inside Yahoo!

Brad Garlinghouse’s memo is worth reading if you do business with Yahoo!, work for them, own their stock, or care about competition at the top of the Internet pyramid.

Having sold a few companies to Yahoo! and watched another sell out before we could invest, I found this part of the memo to be particularly true.

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.

• YME vs. Musicmatch
• Flickr vs. Photos
• YMG video vs. Search video
• Deli.cio.us vs. myweb
• Messenger and plug-ins vs. Sidebar and widgets
• Social media vs. 360 and Groups
• Front page vs. YMG
• Global strategy from BU’vs. Global strategy from Int’l

When Delicious was sold to Yahoo! I hoped and expected that they would merge delicious and myweb, at least the backends, and ideally the entire services into a single social bookmarking system they could propogate across their entire network, particularly search. It never happened and I think they missed a huge opportunity, in fact the opportunity that Delicious presented them.

It appears that Yahoo! likes to hedge its bets. But that means they don’t have confidence that they can make the right ones.

Brad argues that Yahoo! must make the tough calls:

Kill the redundancies. Align a set of new BU’s so that they are
not competing against each other. Search focuses on search. Social
media aligns with community and communications. No competing owners for
Video, Photos, etc. And Front Page becomes Switzerland. This will be a
delicate exercise — decentralization can create inefficiencies, but I
believe we can find the right balance.

It’s good advice and I hope they listen to Brad.