The Slow, Sad Death of Yahoo

Yahoo is up for sale again, and this time it seems serious about just getting out from under.

Yahoo began in 1995. Its founders, Jerry Yang and David Filo, were Stanford students much like the entrepreneurs at Google and other Silicon Valley mainstays. It started as an Internet directory that became the top navigational tool among people adopting the Web as an informational resource. There was nothing like it and, somehow, Yahoo maintained its top position right into the dot com crash around the year 2000.

But Yahoo evolved and changed to keep abreast with Alta Vista, then Google. It branched out into various user services such as news, email, photo archiving, groups, chat, classified ads, and on and on with many services shuttered as time went by.

The company had a string of unremarkable CEOs, all of who were ill-equipped and lacked the vision needed to guide the company. Perhaps the biggest failing was the organizational structure, which did not seem to exist at all.

Things got upended when a Hollywood guy, Terry Semel, took over as CEO in 2001 and remained until the middle of 2007. He showed up shortly after Yahoo bought Geocities for $4.6 billion, then followed up with buying for $5.7 billion, essentially squandering $10 billion and setting the stage for much folly. The company did joint ventures, one resulting in a syndicated TV show. There was also an excellent Yahoo magazine that came and went, part of the old Ziff Davis empire.

Yahoo Sports became a dynamite center for sports reporting that was never replicated in other arenas. I cannot fathom why. Who was behind Yahoo Sports? A smart CEO would have put this person in charge of all reporting site-wide and built out the operation as a premier news center for all segments. But no.

The Finance and Tech sites should have been as popular and noteworthy as Yahoo Sports with its brand-name writers and reporters breaking actual news. But alas, with Yahoo, stealing a good idea or buying what appears to be a good company and then letting it languish and die is the overall theme. It just never ends. And it's obvious that Google re-organized under the Alphabet umbrella just so it would not fall into the Yahoo pattern.

One irony is that I know a lot of very smart experienced folks who work at Yahoo. Unlike Google, a company intent on loading up with engineering talent, the Yahooligans are more the business creative types who understand engineering. It begs the question: How can a critical mass of geniuses accomplish so little?

That said, Yahoo still has a lot of usefulness for a lot of users. Will it make a difference if it folds? Probably. There are a lot of little known sub-products people rely on.

The current thinking is that Verizon is going to pay billions and buy the company. But why? Dumb telco executives often venture into messes like this. They buy for some "strategic" malarkey, realize they cannot manage the operation at all, make changes that do not work, lose the talent keeping the ship afloat, and, within a few years, take a huge tax loss and shutter the operation. Later they conclude that the tax loss was worth it.

That is the future of Yahoo. If you are dependent on any of its services, start to look for the alternatives right away.

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