Yahoo Sold Off to Verizon and What It Means

Marissa Mayer arguably did her job when she finally found a willing buyer for Yahoo in Verizon. Already, Yahoo had been tossing assets overboard in trying to make themselves attractive. Even the few strategic buys like tumblr proved fruitless over time in an effort to stay independently afloat. Thus, the real exit strategy in a market like this one is the buyout. But considering that the end price tag was $4.83 billion, one must ask if this was worth it?

As a long time Yahoo user, I have no sympathy towards this loss of identity. At this point, Yahoo’s primary value is the brand name, their remaining email user base and the few key properties like flickr, tumblr, etc. that may have an active and loyal user base. I doubt that Verizon will do much with the existing properties beyond possibly tossing more overboard with few life rafts while trying to make sense of any useful data.

But the thing is that the company has long been deceased at least in spirit since the dot com collapse. Their original identity as a portal site became irrelevant over time because they could not expand from a technological point of view to differentiate themselves in usefulness compared to Google. In addition, their real money maker, which was ads, had long been bypassed by Google Adwords, even though Yahoo originally had the IP for ad placement bidding.

Most of Yahoo has been a series of failures since making miscalculations for buyouts. Rather than try to grow organically, Yahoo went after growing, hot properties. The ones they successfully managed to purchase only were integrated into their monolithic portal with little means of featuring them. In turn, the people leading the charge for some of these companies either just “rested and vested” (like in the Silicon Valley TV series) or left.

But that partly can be attributed to typical large corporate politics, poor monolithic management and egos competing for attention. In the meantime, competitors developed far better technologies and let their staff grow, where they felt they could contribute meaningfully and be rewarded meaningfully.

By the time Marissa Mayer grabbed the helm, the damage had already been done to Yahoo. Shareholder greed and management apathy created an internal culture of decadence. Shareholders, you could say, ought to be some of the worst offenders. Often times you’d read reports where each new person would come in, attempting to appease the shareholders’ lust for quarterly profits/growth but not be given sufficient time nor holding a concrete plan. Part of that problem also was that those elected into the office were for their pedigree rather than vision. Some weren’t even properly validated. But all of them upon their exit would get a nice golden parachute as appropriate for people in that status.

I honestly doubt that anyone in that position would be effective simply because of how bad the situation was internally. Marissa Mayer gets a lot of criticism, some rightfully so, but most unfairly in my opinion. In fact, unlike her predecessors, even the returned Yang, did absolutely nothing to halt the bleeding or institute corporate change. Marissa Mayer did some changes and managed to get the company sold, which is far more than anyone else had notably done in that spot.

I do feel that if Marissa Mayer had any personal vision of what Yahoo could become it would’ve been stifled by shareholders, board members and other corporate politicians. Despite being CEO, there’s a limit on what she can do. You could be a CTO, for instance, but if there’s someone else who funded that company who pays your bank account, then you’ll report to that person. The same can easily be said for someone hired into a spot like Marissa Mayer. She wasn’t an empress just a figurehead for overseeing the operations and signing off on the hard decisions with some oversight from the board.

In terms of the board and corporate politicians, I speculate that they let the company rot on purpose. Most probably managed to carve out a nice niche for themselves where they didn’t have to do much. So any drastic change to their habitat would’ve threatened their petty lifestyle. Obviously, they wouldn’t outright admit to desiring the company to rot and would want the company to be profitable. But fixing any core problems with the company would entail too much real work and thinking.

Also, I don’t want to make it seem that there was an absence of talent. In fact, I would argue that the people I’ve seen or have managed to work with from Yahoo were all bright and talented people. But most efforts probably would go unnoticed by the general public just because Yahoo failed to market many of the cooler projects successfully. Rather than seeing some of their new search technology emerge for instance, we only saw crappier and crappier versions of their homepage emerge. And many core issues that have plagued Yahoo such as the incredible amount of spam to Yahoo Mail, the numerous fake accounts on Yahoo Chat, etc. never have been fixed.

So when Verizon finalizes gobbling up Yahoo, most likely we’ll see a large number of layoffs (hopefully to all the useless middle management, marketing and MBA types clogging their ranks), maintaining properties and anything that generates some revenue or usage like email and a slow unplugging of everything else.

It’s really not sad in my opinion. I think the only thing that would make me emotional is if they close down my Yahoo account, mostly because I’ve used it since day one and have a ton of email going there still. There’s so many better places on the internet to go at this point and the only reasons I ever bother returning is because of my legacy email and old habits.

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