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| Yahoo needs much more than just reconstructive surgery |
| Jeff Segal / May 04, 2009, 00:47 IST |
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New Yahoo boss Carol Bartz doesn’t seem to have a problem with change. Less than four months into the job, she’s getting rid of stagnant legacy businesses and cutting employees at the struggling internet giant.
But that alone won’t be enough to turn Yahoo around. Yes, it needs such reconstructive surgery. But more importantly Bartz needs to give it a mission.
The list of Bartz’s alterations is growing fast. Yahoo is currently shopping around Hotjobs, the job listing site it bought for $436m in 2001.
Hotjobs has fallen behind industry leaders Monster.com and Careerbuilder, but could still fetch a solid price. Gannett paid $135m for just 10% of Careerbuilder – which Comscore says has 48% of the market to Hotjobs’ 30% – last year.
Yahoo’s also looking to hawk its personal ad business. It’s in talks with IAC/Interactive about a deal that would merge it into Match.com. That business could fetch some $500m, according to analysts.
Then there’s Web 1.0 relic Geocities. Yahoo bought the Facebook/MySpace ancestor for $3bn in 1999, and it was one of the internet’s first real forums for personal expression.
The company plans to shut it down later this year as it has been eclipsed by newer technologies. And to top it all off, Yahoo cut 600 employees this week.
These changes were called for. The company has struggled ever since it flubbed its courtship with Microsoft last year. Its earnings fell 78% last quarter from the year-earlier period and it expects operating income to plunge as low as $80m next quarter.
But while making Yahoo less of an internet hodgepodge is a good start, Bartz’s knife-wielding skills won’t be a cure-all.
What the company really needs is a mission. If Yahoo wants to focus on search, it should turn all its resources towards that goal and try to snatch MSN from Microsoft.
And if it really wants to become the start page of the internet, as former chief Jerry Yang suggested, and exploit its display advertising expertise, it needs to build or buy the interactive functions that make Facebook and Twitter so trendy.
Bartz infamously used the English language’s most popular four-letter expletive on the company’s recent earnings call.
That kind of abrasiveness, and the willingness to shake things up that goes along with it, is a welcome change for Yahoo. But for Bartz to really turn the purple-loving company around, she’s going to need to show some long-term vision as well.
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