Yahoo! was founded in the year 1994 by two guys namely Jerry Yang and David Filo. Before officially as Yahoo! it was previously known as “Jerry and David’s Guide to the World Wide Web”. It was popular back then because they were the ones who not only introduced the search engine website but also had cool options like news, web, answers, etc. But its decline was equally intense as its rise was. So, what basic reasons could be. Here are few points that lead to Yahoo’s decline, being observed by one of its former employees who worked for nearly three years:
1. Founders’ least involvement in launching new products – It is always mandatory that the founders get involved with making decisions regarding the launch of the new products and/or services plus updation of the existing ones, if they really want that their business reaches new heights and never collapses. This is the key reason why Mark Zuckerberg (Facebook) and Larry & Sergey (Google) are so deeply involved.
2. No guts of taking bold steps – There was no fixed decision made and the managers were too afraid of taking really risky and bold, yet creative steps. They never encouraged unique and brilliant ideas. Google on the contrary has been a huge risk taker since its beginning, which was the only reason for its success, and it is indeed an irony that it was well recognized nearly during the same time as that of Yahoo’s decline. There were so many products that were made but never got launched. If some of them did launch but their versions were edited to entirely different product that didn’t match the original idea.
Take a look at YouTube and you will get to know that its server used to crash after every 10 minutes once upon a time but the owners didn’t back down. Today it is one of the most popular websites for uploading as well as downloading videos of few seconds to hours. Google became so popular that it could afford purchasing YouTube and it did in the year 2006.
3. Communication gap – There was a huge communication gap internally for setting the priorities and strategies among the higher authorities and the sub-ordinates, even regarding the serious matters and issues that the company was facing. In every meeting the executives never really talked about they were actually delivering inferior products as compared to its competitors, rather boasted about how great its achievements were.
4. Low hiring bar – Yahoo! had really high hiring bar during late 1990s and early 2000s. Since it emerged into hugely popular website there was contiguous requirement of more and more employees. It then ended up hiring less talented employees (B grade) in large numbers who would simply deliver the supposedly high quality projects on deadlines. Engineers were then considered merely as “service organization” that made many good engineers resign who actually had great caliber. Now in order to manage those B players the organization decided to increase the number of level 1 and level 2 titles. There came a point when it literally had more than 300 VPs.
5. Execution discipline dearth – For successfully launching a product there has to be clear launch process, through regular meetings where certain actions are decided to get carried and checked whether it executed properly or not. This is how a consistent product review process is done. The product managers didn’t pay much attention to closely watch everything.
6. Lack of real talents – When there is a lack of vision, poor communication and unwillingness to take risks the best talents start leaving, which is what actually happened with Yahoo when the whole scenario was understood by those visionaries. The mediocre’s couldn’t really deliver the expected outcomes even if they were large in numbers.
7. Image decline – Yahoo has already messed up with all of its engineers who were responsible for its rise; plus in the eyes of consumers it still has long way to go to literally compete in the market. For that it needs to hire thousands of talented engineers which cannot be done now simply to fix its whole lot of bugs.
The above points were the viewpoints of an employee who used to work at Yahoo!. Likewise everyone might be having varying experiences but one thing is clear by going through all. The company has been dealing with unorganized approach since many years which is the main reason for its decline that cannot be undone. Now it’s official that Verizon is buying Yahoo for $4.83 billion. Had it been finalized its deal with the Microsoft which was offering straight $44 billion in 2008, the loss mustn’t have extended this far. Well it is still unclear whether its brand name Yahoo! will be there or not then after.