"The company to beat remains Yahoo." - Bloomberg, 1996
"Yahoo just gets bigger and fatter and gets more and more revenue." - James Moloshok, senior vice-president at Warner Bros., Bloomberg, 1998
"Yahoo today is widely considered one of a handful of companies destined to dominate its portion of the Internet space.... Most impressive of all, Yahoo is the rare Net company that is profitable." - Fortune, 1999
Hard to believe that Yahoo! was once the most talked about company in the world; a hot spot on the WWW, and one of the prime influencers and motivational force of entrepreneurs and investors chasing down the next big thing.
Hard to believe that a company once in the stratosphere of public company valuations has a Wall Street closing price, today, only a couple of dollars more than its closing price on the day it first went public some 20 or so years ago.
In what is in hindsight a prescient comment - although at the time meant to be high praise, Randall E. Stross wrote in Fortune in March of 1998:
Once upon a time, Yahoo! was an Internet search site with mediocre technology. Now it has a market cap of $2.8 billion. Some people say it's the next America Online.
$2.8 billion? That's about $700 million less than the founders expect to take off the table these days, as Verizon, AT&T, Google's parent company Alphabet, former AOL partner Time Inc. and others plan to make a bid for it...prescient in so many ways.
And while there is so much to ponder around Yahoo!'s demise and so many ways to point fingers, I looked for and was fascinated to find a lesson that I believe is a universal warning to all of us...no matter the category...no matter the business segment...no matter the product or service base.
CNET in April of 1996 wrote about Yahoo! as follows:
"Brand value counts no less on Wall Street than it does on Wal-Mart," [said Stave Harmon, investment analyst at Mecklermedia]. "Yahoo has the name and is just starting to build it to be a very significant company in the future."
Too big to fail? Brand name too powerful to fail?
One researcher tracked Yahoo!'s "boilerplate," the block of text that describes a company's self-description found at the bottom of most press releases. In 24 years the boilerplate changed 24 times!
As Wired wrote just a few months ago: "As revolutionary as it once was, it's unclear if we need Yahoo anymore."
And why is that?
David Carr, the late New York Times media columnist, once tried to understand what Yahoo! did and by extension how it made money. He questioned Carol Bartz, the then CEO, and Carr wrote: "After 5 minutes of listening to her I still had no idea."
NO BRAND PURPOSE. NO TRANSLATABLE VISON. NO BRAND CLARITY.
And that lack of clarity and inspiration continues, according to the Wharton School of Business:
When Marissa Mayer took the reins at Yahoo, she was hailed as a visionary leader who would rescue the floundering company. But she failed in her most important task: explaining - to investors, customers, employees and the world, really - why Yahoo should continue to exist.
Leaders of great brands use brand purpose as compass and engine for their organizations - driving, aligning, and guiding everything they do. Without the long-term commitment to a definitive purpose, Yahoo has been rudderless.
The lack of direction and purpose becomes even clearer when you listen to Mayer's VISION for Yahoo!:
As digital content becomes richer, as search and mail become richer, we need to change what the format of that guide is, as we move to mobile, wearables, TVs, cars, and all the other formats in the future. So, we're focused on search, communications and digital content, all of which we think are incredibly important parts of that role as a guide, and those are the products that we're investing in and building on.
There is nothing here but cost of entry, basic, no special sauce...repetition of what is driving the market.
Now read Larry Page's vision for the future when he launched Alphabet to the world:
We've long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.
And in the same Wharton article mentioned above, the contrast between the two companies becomes clear:
Less than two weeks after Google's parent company, Alphabet, became the world's most valuable public company, Yahoo put its core business up for sale. The contrast between the two companies couldn't be sharper.
While many theories have been offered to explain Yahoo's downfall in light of Google's ascent, I would like to suggest that the difference in the companies' brand approaches may be the most illuminating. While Google has mastered brand strategy and management, Yahoo has lacked a definitive brand purpose and future-oriented brand vision - and these deficits have led to key brand missteps including introducing an impotent visual identity.
Google's brand mission is well-known and well-established: to organize the world's information and make it universally accessible and useful. Yahoo's brand mission isn't so clear - actually it isn't to be found. An official mission statement doesn't exist on its site, and the statements I did uncover elsewhere were varied and often conflicting. The company lacks both a definitive, compelling description of what it does and why it does it.
According to BAV, Y&R's proprietary global brand database that measures brand perceptions, 70% of brands in the US are in decline or are stagnating and the trend continues and grows.
BAV data suggests that a prime cause driving this is, what was once a brand's competitive edge is now no more than the basic price of entry into the Brandsphere:
High quality
Reliable
Trustworthy
Cares
The very attributes that once propelled brands are now nothing more than table stakes.
What does boost a brand that has a place at the table - if you will - is VISION. A brand needs to be VISIONARY and meet the basics.
Unless you can be open 25/8 or make nano-second response visibly measurable to me, VISION is what inspires and motivates usage and purchase.
And a brand needs to have a strong visual language...
Yes, we can talk about Yahoo!'s poor technology. And, you are right to finger its misreading the market dynamics, and there is some evidence that it engaged in bad hiring practices.
But at the end of the day, all of that is symptomatic of a company, a brand, without a defined and clear vision:
Yahoo has also been vision-less....In fact, Yahoo has been operating in reactive mode for the last decade. Even the new homepage design it recently introduced is merely an incremental evolution of its past designs and its latest attempt to mimic the popular features of other sites.
If ever there was a lesson to be learned from the fall of an icon, it's here - and it's a universal lesson for all businesses - no matter how big or small - high tech or low - service or product...Listen:
Without vision, even the most focused passion is a battery without a device. - Ken Auletta
And no matter how powerful the battery, without a purpose to power, they just drain away...
And don't forget Helen Keller:
It is a terrible thing to see and have no vision.
As articulated by Wired..."Yahoo was once a trailblazer. It was a Titan. It was right, actually, about the future of the web."
And all wasted...a cautionary tale!!
Put another way, Digital is Everything but Not Everything is Digital.
Digital is the basic, cost of entry. Enough with digital ready, digital first, digital transformation...it's meaningless.
What's your vision to change the world with what you do? That is where greatness lies and that is where the great companies are focused.
What do you think?
Read more at The Weekly Ramble