Susan L. Decker became president of Yahoo! in early May. Her target: Google. Can Yahoo! out-Google Google? No. Yahoo! lost their focus years ago, and Google was all too happy to snatch it up.
According to a July 1, 2007 article titled "Can She Turn Yahoo Into, Well, Google," in the New York Times:
By many measures, Yahoo remains one of the most successful companies on the Internet. It attracts nearly 500 million visitors around the world every month to its Web sites, where it offers a plethora of content and services, from news, sports, financial information and entertainment to e-mail, photo-sharing and online communities. And it is one of the largest sellers of Internet advertising, which it places both on its Web portal and on other high-traffic online destinations like eBay, Comcast.com and hundreds of newspaper Web sites. Last year, it earned $751 million in profits, on sales of $6.4 billion.
Yet over the last 18 months, Yahoo has suffered its biggest slump since the collapse of the dot-com bubble. The company has been eclipsed by the phenomenal rise of Google, which handily beat Yahoo in the most lucrative business on the Internet: search and search advertising. As a result, Google now makes far more money in one quarter than Yahoo does in a year, and Google’s market value of $162.8 billion is more than four times that of Yahoo, which stands at $36.5 billion. As Yahoo races to close that gap, its bread-and-butter business — the sale of banners and other graphical ads — is showing signs of weakness amid growing competition from MySpace, Facebook and countless other sites.
Analysts, meanwhile, say that Yahoo, a company with 12,000 employees, has grown bureaucratic and slow, causing it to miss out on some of the hottest Internet trends, like social networking. They say it has also missed out on some of the smartest potential acquisitions, including YouTube, which was bought by Google, and Facebook, which Yahoo once considered buying. Now Facebook says it is not for sale, and even if it were, the price would likely be far higher than the $900 million or so that Yahoo offered last summer.
When a company loses their focus, they open themselves up to be attacked from all angles. It is better to be strong in one area than weak across many.
Al Ries said, "Successful generals study the battleground and look for that one bold stroke that is least expected by the enemy. Finding one is difficult. Finding more than one is usually impossible."
As long as Google does not lose their focus, they will remain on top. And poor Mrs. Decker may be given a hardy heave-ho by investors and the board, both of whom have unrealistic expectations.
The lesson is clear, here: find one thing and focus all of your efforts on it. Be a specialist. Be narrow. Turn away customers and clients who don't fit your bill. In the short term, you may lose a few battles. In the long run, you are setting yourself up to win the war.
Read the article here.
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