Wednesday, April 26, 2017

Is Yahoo Lacking of a Clear Strategy Statement?

I remember the first email that I have was a yahoo email. It was in around 2000s. At that time, Yahoo was in its peak position. Not so long after that, Google beat Yahoo popularity. And in the last 15 years, Yahoo has been out of the radar. The recent news about it is that Verizon acquired that company with only $4.8 billion [1]. So, what is wrong with this internet giant?

If you read the HBR article "Can You Say What Your Strategy Is?" by David J.Collis and Michael G. Rukstad, you will know how a clear strategy is very important for an organization to lead into the right direction; however, many executives cannot articulate their strategy clearly in a simple statement. There are three components of a good strategy statement: objective, scope, and advantage. And this strategy statement should be known by the entire organization so they will have a guide for every decision they make.

Probably many factors caused the failure of Yahoo, but I believe one of them is their strategy. Even though everybody knows that Yahoo is an internet company, Yahoo does not have a clear objective and strategy about what they want to achieve. They are also not clear about what is their competitive advantage so they can compete with their competitors. "If you’d asked 10 of its executives to define Yahoo’s core strategy, you’d get ten different answers" [2].

There was an internal memo from Yahoo SVP Brad Garlinghouse in 2006 that famously called as the "Peanut Butter Manifesto." This memo pointed out Yahoo that became overgrown and lacked focus, as they were expanding their business across the multiple opportunities and continue to evolve everything in the online industry. It made their investment in each of their products are really thin, just like the peanut butter that is spreading on top of the bread [3][4].


In 2016, under Marissa Mayer tenure, Yahoo released their strategic plan that was trying to sharpen their focus by making a stronger strategy in their mobile, video, and social, or what they called as "Maven." [5] However, It still hard for Yahoo to sum up their objective. It is not as easy as when we said Google as a search engine or Facebook as social media or Paypal as a payment service. Besides, if we take a look at some of their strategies in their strategy statement, those are not clear enough regarding objective, scope, and advantage. For example, "Improve consumer and advertiser product quality and grow daily active users (DAUs)." We do not know which consumer, in what segment, by what is the scope, and what is their competitive advantage that can make their consumer choose them instead of their competitors.

[1] https://www.wsj.com/articles/verizon-finalizes-4-8-billion-yahoo-deal-1469380974
[2] http://www.foxbusiness.com/features/2016/07/26/rip-yahoo-why-marissa-mayer-failed.html
[3] https://www.wsj.com/articles/SB116379821933826657
[4] http://www.businessinsider.com/peanut-butter-manifesto-still-holds-true-for-yahoo-2016-2
[5] https://investor.yahoo.net/releasedetail.cfm?releaseid=952996

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