How Yahoo Can Survive Its Current Woes

Yahoo was once the be-all, end-all of search engines, and it was really the first big search engine to become a household name. However, Yahoo has come a long way from the days of $118 shares. In fact, thirteen years after it burst onto the internet scene, its CEO has been fired, thousands of employees have lost their jobs, and Yahoo’s shares have dropped. In fact, the site has been so over-shadowed by Google that it has been in major talks with several companies regarding a take-over.

What has caused all of this? There are several reasons. The first is that more competitors have appeared on the scene. Besides Google’s sudden domination of the search engine world, MSN, AOL, and http://Ask.com have all fought Yahoo for users’ attention. What’s more, Google’s emergence seemed to only really detract from Yahoo’s client base—the other three search engines have actually remained steady in recent years.

Yahoo has gotten away from its roots—the search market. That’s what they were originally known for, and it’s what they really do best. Searching the internet was once Yahoo’s entire reason for being, and it’s this purpose that they need to refocus on, especially now that sites like Google are expanding (and possibly repeating the mistakes of Yahoo’s past? Only time will tell on that one).

Yahoo also needs strong, new leadership to help give its employees a new sense of direction and purpose. This leader needs to be able to bring new ideas to the table while at the same time focusing the company. Yahoo is trying to be everywhere, and that strategy simply isn’t working. They’re running Yahoo Music, Yahoo 360, Yahoo Greetings, Yahoo Personals, Flickr, and much more. With the exception of Flickr, all of these sites have been done and have been done better. Yahoo 360, for example, is a social networking site, but it doesn’t enjoy anywhere near the popularity of sites like MySpace of Facebook. Yahoo Personals, likewise, has nowhere near the users that use dating sites like eHarmony.

If Yahoo is truly to survive, these services may need to be dumped. They don’t bring much to Yahoo’s resource pool and are, in fact, financial drains on the company. While Google spread out, too, they’ve actually spent some time revitalizing their search engine capabilities. They’re not spread thin, and they tend to dump anything that doesn’t work out like they expect it to.

Google has also worked on integrating its many services, something Yahoo has not yet done or has done poorly. Yahoo is trying to be known for so many things that it’s no longer really known for anything. They also need to stop spending money on Web 2.0 services. This puts them in direct competition with hundred of other companies, and it’s simply not needed. Yahoo should have two rivals, MSN and Google. They’re fighting a war on so many fronts that it’s hard to count them all.

Overall, if Yahoo wants to survive in the coming years, they need strong leadership that isn’t afraid to cut and run when services start to fail. They have many services that aren’t bringing in nearly as much as they’re costing the company, and these services need to go. Yahoo basically needs to embrace the idea of getting back to their roots. They’re a search engine. If they remember that and refocus themselves on doing what they do best, they can stage a come-back. If they can’t, the future of Yahoo may be grim.