Hey, everyone else is telling Marissa Mayer how to fix Yahoo!, I thought I would, too.
First of all, congratulations for getting the job. Second, my sympathies. It’s not going to be easy. But this has taken that first big step: people are at least paying attention to Yahoo again, and seeing possibilities there. that’s better than a week ago, when I think almost all of us just expected Yahoo to continue its slide into the dusty mists of irrelevancy. It’s a small victory, but it’s a key one; people are paying attention to Yahoo again, at least for a little while.
That window will be small; don’t waste it. Get your vision out where people can see it as soon as you can, and then start showing that Yahoo is taking steps to implement it. You will likely run into parts of Yahoo that don’t want to work that hard — when Steve returned to Apple, he ran into organizations that had the “we do things our way, we outlasted the last two CEOs, we’ll just ignore you until you’re replaced, too”. He solved it the old-fashioned way: he had some public executions and put a few key heads up on pikes outside of Infinite Loop 1, and then watched as the rats scurried off the ship. The ones that didn’t scurry fast enough he took care of himself. Don’t be afraid to do the same at Yahoo; in fact, I’d strongly recommend finding one or two very visible, long-entrenched people and make sure the world knows they’ve decided to spend more time with their families (I can offer names privately if you want suggestions…)
I realize I’m down to two sets of things that use Yahoo — my mom’s stocks are on Yahoo finance, and I still use Yahoo groups for some email groups I manage. That’s a long, slow decline from when I left Apple and fully planned on hiring myself off to Yahoo. Came close twice (closest was with the Igor group), and over time, rattled that cage a couple of other times, but never found a match both sides could agree on. In retrospect, I have to thank Yahoo for not hiring me, because I’m frankly glad I’ve missed the last few years of fun there. Funny how life works out some days.
If I were in her shoes (which I’m glad I’m not, high heels make my calves cramp), here’s what I’d do with Yahoo.
I view Yahoo as three major pieces: content, product, and technology. Content are those sites that produce information for Yahoo users, such as Finance, Weather, Sports and Movies. Products are sites that offer services that attract users: Yahoo Groups, Flickr and the fantasy sports sites are some significant examples. Technology  is broken down into two subsets: user visible (external facing) technology suites like YUI and Pipes, and internal technologies that are used to drive the rest of Yahoo (like the advertising engines).
I would split the company into these three parts, each reporting to a GM. Each major component reports up to the GM. Content and Product both become P&L’s, and each major piece needs to be examined. If it’s determined it can’t be made profitable again, sell it, give it away, or shut it down. If it can, build a plan to make it “best of breed” for its segment, fund the plan, and get going. Some of the more profitable sites will probably surprise you (and the geeks); I’m betting omg does better than most folks think. Actually, I’m guessing most geeks don’t know omg exists.
Technology has a GM, but serves two masters. Some technologies are externally facing and are used both by Yahoo and outsiders, like YUI and Yahoo Pipes. Yahoo Pipes desperately needs some TLC. These technologies can be useful tools for outreach and recruiting, if you engage and evangelize the users. All of Yahoo’s externally facing properties have gotten rather quiet and reclusive in the last few years. Time to make some noise. Internally, I’d examine all of the technology systems you use to actually run the business and ask a few key questions, like “are we supporting duplicated technology stacks that need to be merged?” and “is this a proprietary solution where we can adopt something open source and contribute back to it and it’s community instead?” and “is this something we should open up and build a community around rather than keep private?” — from what I’ve seen, you’re not going to be happy when you start digging into the infrastructure inside Yahoo’s data centers. An interesting question to ask might be “what is the average CPU utilization in each data center?” followed by “Why the @#$@#$@ are so many of the CPUs spending so damn much time idle?” (hey, has Yahoo ever figured out real virtualization? Just asking). I could be wrong, but I think there are a lot of efficiencies to be found by some intelligent cleanup of the things Yahoo uses to build and deliver stuff to users. Or so I hear.
I think Yahoo’s opportunity is make itself a place people want to be again. There are a lot of core pieces. Facebook owns where people share their lives with each other, but a dent can be put in that by creating a place where people create their own little reality. There are chunks of pieces in place: the content pieces. They need to be glued into pages where a person can define themselves and what they are, and a page where they can see the stuff they’re interested in easily.
To start solving that problem, I’d suggest buying Rebelmouse and Prismatic. Rebelmouse has done a really nice job of aggregating in a view of what a person is and what they say and Prismatic is all about figuring out what a person is interested in and showing it to them (see mine here). Rebelmouse is 90% of that personal profile/portal that Yahoo has tried to build a half dozen times and failed at (remember Yahoo 360?). Prismatic is what Google Reader should have been long ago, except Google got bored and stopped trying to improve it. These two pieces can be a key to centering a Yahoo comeback, I think, by creating a place for users to organize what they present to their friends and the world, and a place where they organize what their friends and the world present to them, with no programming and a little coaching. And some careful integration with Yahoo content sites like Movies and Weather and Sports. Which is where the ads are. Which is what drives revenue. Hmm.
Before you touch EITHER of those companies, though, call up the founders of Delicious and ask them to explain what happened from their point of view. Don’t hear the Yahoo side, listen to the founder side. Because if you don’t fix the “everything stops for a year while you port your system to whatever systems Filo is in love with this year so we can move you to our data centers” problem, it won’t matter.
Flickr is your well-loved, neglected crown jewel that everyone is rallying around to convince you to save. It’s a bit sad that part of the reason it’s so well-loved is that unlike so many other technologies and companies that Yahoo bought (and screwed up) over the years (like Delicious), it’s still doing as well as it is partly because Yahoo was committed to keeping hands off and leaving it alone. That’s changed in the last year or two, and it shows, not for the better. But Flickr is a highly visible property with a lot of goodwill and karma in the community. Some public commitment to love and caring of Flickr will go a long way towards building both interest and momentum. As you work to figure out how to make Yahoo a place people want to visit and be again, rallying those plans around Flickr seems like a smart way of starting.
Another two properties I’d focus on: Yahoo groups and Fantasy sports. Fantasy sports is a huge draw and the yahoo fantasy sports engines are some of the better ones. It can drive a lot of traffic (and page views) onto the sports pages, and gives sports geeks a reason to come to the site. Don’t’ underestimate it’s ability to draw in the male audience and drive them places to generate pageviews.
Yahoo Groups? It’s main competitor is Google Groups, which is even more stagnant and ignored than Yahoo Groups is. Both of them are pretty outdated and smell of mildew and neglect. The google site is where tech geeks go to use email to share stuff, where yahoo is where consumers go to use email to share stuff. (every time someone tries to tell you email is dead or dying, go see just how much communication still goes on via this dead and boring technology). I have to be blunt: this is an area dead ready for disruption; I know someone (who has the chops to pull it off) that believes it can be done, and is working in that direction, and I’ve spent a little time looking at some of her plans and giving them feedback, and mailing lists have a lot of life and innovation in them still (or more correctly, group communication systems. Not JUST email any more). These are still ways people use to tie groups of people together — and those ties draw those people onto the site. Yahoo groups isn’t just a mailing list system, it’s a water cooler that draws people around it to chat. Do it right, and it’s a recruiting tool to bring people into Yahoo as users. and Yahoo users drive page views through the content areas, which drives revenue.
So… the plan?
Rebelmouse, as the place users put their stuff to share to others.
Yahoo’s content sections, which is where that stuff originates. And drives ads onto that stuff, which drives revenue. This is your users new newspaper
Prismatic, as the place users go to see stuff shared to them. This is your users new, personalized newspaper front page.
Yahoo Groups becomes the social hub users use to cooperatively share information among each other. It’s not just a mail list system any more (right?)
Flickr for pictures and video, and there’s already a solid social sharing hub here (bring it up to snuff, use it as a model for everything else where you want social sharing)
Fantasy sports which draws in the sports geek crowd, and drives a lot of page views off into the sports ares.
Yahoo mail is positioned to replace gmail and hotmail as the place these users get their email.
There are lots of interesting pieces around Yahoo that don’t need LOTS of work, but need coordination and integration, and a social hub that helps people share those pieces with each other and drive them to be the default sources of that information for users. And — how coincidental — if that happens, it takes a chunk out of Facebook, but even more amusingly, takes big chunks out of various Google properties. I’m sure that’s of no interest to a former Googler, though. (seriously, though, I think a well done integration of Rebelmouse with Yahoo Mail, Yahoo groups, the content pages and an upgraded flickr can put a stake through the heart of Google+ and kill it stone cold dead, and Google won’t be able to stop it).
Lots of work to do to make this happen, but for the first time — I see someone who might make the changes needed to make Yahoo relevant again. And has the technical background to know how to make it happen. (I was, if folks remember, a fan of Carol Bartz going to Yahoo; the Yahoo I saw her building was a lot different than this one I see today, but she was either unwilling or not allowed to put those heads on the pikes, and so Yahoo played the “I outlasted the last few CEOs” game with her, and outlasted her. Don’t make that mistake again, Marissa).
But I think if nothing else, the thing to remember was this: two weeks ago, I was planning my exit from the few Yahoo properties I still used in any way, because I figured it was only a matter of time until everything faded to black. Now, Yahoo’s brought in someone that gives it some time to prove it can fix itself. Apple was the same way once, and look at it today. that doesn’t guarantee a comeback. but at least now some of us see a glimmer of hope. Time is short before that hope fades again. Time to get to work….