Yahoo! in 2006: Sacrificed vision for versatility

By siliconindia   |   Thursday, 11 January 2007, 18:30 IST
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The year 2006 has been one that the world's most-visited website Yahoo! would rather forget. For starters, the firm issued a series of profit warnings, reported a 38 percent drop in third-quarter profits to $155 million, and watched its share price drop by more than 25 percent. Its disappointing performance indicates that the Internet services company has somehow lost its way. Providing a raft of products and services from its search offering to email, music, mobile, shopping, health advice and small-business services, not to mention related sites such as Yahoo! Answers, the brand could be accused of trying to do too much, reported The Economic Times today. For Yahoo!, 2006 ended dramatically, with the announcement that chief operating officer Dan Rosenweig and media group head Lloyd Braun were leaving the firm and also a shake-up of its organizational structure. Brad Garlinghouse, Yahoo!'s senior vice-president, in a memo that somehow got leaked concluded that the firm lacked a clear vision and needed to cut its workforce by as much as 20 percent, and rejig seems to be a result of that. Yahoo! Chief executive and chairman Terry Semel is leading the restructure efforts and aims to increase accountability and speed up decision-making. The US management has, in the past, kept a tight rein on the portal’s operations across the Atlantic, and managers at Yahoo!'s European operations hope that the restructure gives them more freedom to build the brand in their own markets. Priorities include the creation of more social media environments and the roll out of its much-delayed search-advertising system Project Panama, which aims to make its paid-search options more attractive to advertisers. Though search is one of the most lucrative opportunities on the web, Yahoo! has lost out on this count to Google. The latter’s system, which uses a combination of pay-per-click and rankings based on the price-per-click paid by advertisers, rakes in up to 40 percent more ad revenue per search than Yahoo! Though Yahoo!'s social search engine Yahoo! Answers has done very well since its 2005 launch, with more than 100 separate services under its kitty, the brand is in desperate need of streamlining.