

Can Yahoo Buy Enough Companies to Compete With Google? - shawndumas
http://beta.fool.com/joekurtz/2013/05/28/can-yahoo-buy-enough-companies-to-compete-with-goo/35350/?source=eogyholnk0000001

======
precisioncoder
Marissa Mayer has done one thing very very well. She's changing Yahoo's image.
I see Yahoo consistently in the news, and am actually interested in what it's
doing. It feels interesting. Beforehand I mostly thought of them as an
outdated company that was popular in the 90's.

~~~
Alex3917
"I see Yahoo consistently in the news, and am actually interested in what it's
doing. It feels interesting. Beforehand I mostly thought of them as an
outdated company that was popular in the 90's."

I don't understand this. The strategy she's using now is the same one that
Yahoo was using in the 90s: Buy a company for a huge amount of money and then
watch Yahoo's stock skyrocket so that every acquisition becomes free. Except
for that the stock no longer skyrockets every time they buy something.

So as far as I can tell, they're using the exact same strategy as they used in
the 90s, except for that the economic reasons for doing so have evaporated.
This strategy might still make sense for other reasons (e.g. based on the
intrinsic values of the acquisitions), but it hardly strikes me as being
rebranding away from their 90s image.

~~~
9999
The talk of a Hulu acquisition gave me some flashbacks to their broadcast.com
acquisition (and would be similarly without value for them).

------
pavs
At this point I don't think they are trying to compete with google or anyone
in particular. I think right now they are just trying to be relevant and not
be just a lost cause.

I think I am one of the few who actually wants Yahoo to be a success. But the
reality is that they are far behind from years of just sitting on their ass
that it will take a herculean effort to turn itself around. I actually think
they are on the right track in doing this.

Here is my take as an arm-chair analyst:

Yahoo has a shortage of superstar developers to turn themselves around. This
is hard problem because there are too many big companies with lots of money
and very interesting place and projects to work at who are also after these
so-called superstar developers. So in that regard Yahoo is the least
interesting place to work at. What can Yahoo do?

\- They can offer high wage, but its not always about the money. So it is
unlikely that they will get many good developers like that.

\- They can make yahoo relevant and interesting place to work again but
acquiring new projects, developing new projects and improving existing
projects. I believe Yahoo is doing that right now. It takes time for public
perception to change, but I think they are doing a good job.

\- Acui-hires is the easiest way to get good developers under yahoo roof and
thats exactly what they are doing.

So I don't think they are competing with google, but instead they are trying
to get their base in order and clean up their existing products. Once they are
moderately relevant and people starts caring about their product and then
maybe they will start looking at challenging the big players like Google.

They are in no position to challenge google now.

~~~
nostrademons
FWIW, my experience (knowing a bunch of ex-Yahoos who are now at Google) is
that Yahoo doesn't actually have a shortage of superstar developers, and in
fact has quite a bit of very solid engineering talent locked up there. They
have a shortage of qualified _managers_ , and so many of those developers are
working on projects that will never launch or are largely inconsequential or
are beset by political problems. In that light acquihires are an attempt to
bring in whole teams with a track record of shipping, to change the culture to
one where launching is expected and not an anomaly requiring superhuman
effort.

------
sghill
I think Yahoo has a lost generation[1] problem on its hands. Gmail in
particular has made Yahoo's products look like Detroit's cars in the 70s and
80s.

Anecdotally, at some point in the 2000s, it became embarrassing to have a
Yahoo email address. It invited in jokes of 'she must love spam!' or 'he must
love getting his account hacked.' From here, it's a long and difficult road to
recovery. From the 1991 article linked below, this quote sounds like it
applies:

> "A lot of people would have trouble admitting to their peers that they
> bought an Oldsmobile even if they thought it was every bit as good as a
> Honda," said Chris Cedergren of J. D. Power & Associates, an automotive
> marketing company in Agoura Hills, Calif.

[1]: [http://www.nytimes.com/1991/04/09/business/detroit-
strives-t...](http://www.nytimes.com/1991/04/09/business/detroit-strives-to-
reclaim-lost-generation-of-buyers.html?pagewanted=print&src=pm)

~~~
ajays
"Gmail in particular has made Yahoo's products look like Detroit's cars in the
70s and 80s."

Have you tried the Yahoo Mail mobile app?

~~~
tiatia
Nope.But

\- does Yahoo have free IMAP or POP? No \- does Yahoo have a decent SPAM
filter? No \- how much free space for storage? Too little \- can I use my own
domain with yahoo mail? Don't know \- does Yahoo have a decent interface? no

It is just totally outdated. I don't know if google makes money with gmail
Honestly, I doubt it. But it helps them to keep (and track) its users. From
the privacy perspective, gmail is a nightmare. But is is just too good thought
out. It just works.

~~~
ajays
"- does Yahoo have free IMAP or POP? No"

Hmm... then how does the iPhone client fetch mail from Yahoo?

"- does Yahoo have a decent SPAM filter? No"

I get more spam in my INBOX in my GMail account (which I have protected quite
steadfastly) than my Yahoo account.

" - how much free space for storage? Too little "

Are you kidding me? Yahoo went to "unlimited" storage like 5 years ago!

Looks like you have a pretty strong bias. Time to re-think those
assumptions...

~~~
tiatia
"Hmm... then how does the iPhone client fetch mail from Yahoo?" Dunno. Maybe
via an app or something? As far as I know, I have to pay for POP accesss.
Otherwise I could access my yahoo mail from my gmail account and via alpine.

------
netcan
It's interesting how much closer to Yahoo's internet keiretsu model Google is
looking these days.

Google used to be, very clearly a search box. Then they were a search box with
an ad platform and an email client (that had a good search box). Then search
with lots of cool, free web apps.

Now you definitely couldn't define Google as a search box. You'd need to say
something lie technology company or somesuch. The revenue still mostly comes
from the search box, but the buzz is mostly around (very interesting) other
stuff.

~~~
jacquesm
Google is an advertising network that creates content in order to be able to
sell more ads.

~~~
rz2k
I'm not sure why variations on this comment are posted so often. What is
profound about it, if most people understand how Google makes most of its
money, and it provides little insight on understanding the company's
decisions?

A more useful model would come from acknowledging that ad revenues do not make
it different from other companies, and like most companies its purpose is to
maximize its value to its owners. How do they do this? Given a set of {•stuff}
what will maximize revenues right now, and increase profits in the future over
some time horizon (by reducing costs and by increasing 'stuff' like new
product lines or users).

Perhaps I am responding more to other comments that are similar, more than
yours in particular, but statements about there being nothing further to
understand once you realize Google is ad supported seem to support a couple
oversimplifications. One, the primary focus is on monetizing users, while
creating services that provide value to users is simple. Two, selling
advertising is simple, too.

Let's say that roles could be categorized into revenue strategies and product
development, or even that the hours each person works could be categorized
this way. How much of the total compensation to employees is paid to each of
these categories? And yet, eventually there are no products if they sell no
advertising, but there is no way to sell advertising if users don't find value
in the services either. Advertising decisions too involve a more complex
system of interactions. Even though clients purchase ads based on their
perceived value, Google must assume that eventually perceptions will catch up
to the actual value of ad impressions if they target the wrong people, or if
there is a decline in how clicks translate into sales. Furthermore, though
they might make more money this quarter if they placed more ads per page, or
made them stand out more, it could cause a decline in users for the future.

I suppose this is a long way of saying that it makes little sense to me why
people focus on an intermediate part of the business model as though it is
fundamentally different from any other business. Somewhere between creating
products and services in order to increase the company's value to its owners
there is a step involving advertising. However, there is also a step involving
the purchases of electricity. Couldn't people also talk about how Google
purchases megawatts of electricity so that it can purchase more megawatts of
electricity? The same might be said about terabits of bandwidth capacity or of
computing power. Yet, just like advertising, none of those intermediates tell
the whole story about how Google creates something of value for its customers
and users in order to increase the value of the company. When people talk
about other parts of Google than the advertising platform, the larger context
is the system of creation and business growth. The larger context is not some
aspect of how they monetize.

[•] stuff might include:

\- product lines and active users

\- talent currently in their employment

\- management practices and culture

\- assets like data centers

\- information only available to Google

\- proprietary systems and trade secrets

~~~
jacquesm
It gets reposted so often because many people still seem to think that
organizing the worlds information or 'search' is google's core business.

~~~
rz2k
I may not have been very clear about the point I was trying to make. Search
(and other services) _do_ make up their core business, and people confuse the
issue when they exclusively focus on advertising because it is the source of
most of their revenues.

One could choose to talk about Mozilla as a front end to Google, or newspapers
and broadcast television channels as sellers of advertising. However, focusing
on this intermediate step to the exclusion of the complete system obscures
rather than clarifies an understanding of how these businesses operate.

It is not merely a question of semantics. Fixating on advertising alone
doesn't shed much light on how Google optimizes its business decisions and
creates value for its owners. A parallel might be to focus only on the income
statement, cash flow statement, or balance sheet of a company rather than
looking at all three. Narrow perspectives, even when masquerading as pithiness
or cynicism, are poor aids to understanding.

------
Duhck
The difference between how Google acquires companies and Yahoo has under Mayer
is that Google focuses on Acquihires, bringing each of their hired companies
teams on board and integrating them into the culture, etc.

Yahoo seems to be going willy nilly with their acquisitions, even admitting
that some of the companies they acquired _cough_ Summly _cough_ were not
acquihires but rather for other reasons.

This seems like a waste of money and time to me, and the only people to win
are the founders of the acquired companies.

~~~
jacquesm
> even admitting that some of the companies they acquired cough Summly cough
> were not acquihires but rather for other reasons.

Are we 'admitting' now that some acquisitions are not acquihires?

That would seem to me to be the norm and a positive thing.

------
BaconJuice
No, looking back at the track records of Yahoo's acquisitions I think Yahoo
should consider buying Google to compete with Google.

~~~
jasonlotito
To be fair, I'm willing to see this question posed as "Can Marisa's Yahoo!" as
opposed to "Can pre-Marisa's Yahoo!", and I see them potentially being two
different things. In some ways, like Apple before Jobs can back, and Apple
after Jobs came back.

~~~
schoper
Where does all the bizarre over-the-top Marisa-love on HN come from? Yahoo
couldn't actually be wasting money on paying for this PR could it?

I'm beginning to think that there is some bizarre Natalie Portman nerd
obsession phenomenon going on with Marisa. There certainly hasn't been an
ounce of business evidence that she has any more gifts than the average CEO.

~~~
PakG1
Evidence:

1\. Since Mayer was hired, Yahoo stock is up approximately 64%. This is the
measurement by which all CEOs are eventually and finally judged. Whether that
trend will sustain itself for the long term has yet to be seen, but nobody can
see the future. We can only examine what data we have today. And we do have
this correlation (acknowledging that correlation != causation).

2\. There is a buzz about Yahoo. That hasn't happened with Yahoo's prior CEOs
for a long time. For a consumer company, if you have no buzz, guaranteed that
consumers won't be interested. Especially for online consumer companies, where
customer loyalty seems to switch so easily and quickly.

3\. There have been a number of product revamps that have been well received.
The biggest one obviously is Flickr. Another one was Yahoo. When was the last
time we saw a well-received Yahoo product revamp before Mayer?

Yeah, Mayer's time there has been short. But in less than a year, she's
accomplished more than Yahoo has accomplished in several years.

~~~
schoper
She's popular because she's so popular? Sounds like Google should hire
Angelina Jolie as CEO to compete.

------
elaineo
Google didn't get to where it is today by amassing a bunch of random
overvalued startups.

~~~
aaronharnly
Maybe not "random" or "overvalued", but it did buy (and then further develop):

* YouTube

* Google Earth

* Google Docs

* Picasa

* Android

* Doubleclick

While none of these is the very heart of Google (Search, AdWords), they
encompass some of the most popular and most strategically important of
Google's offerings, don't you think?

~~~
ajays
"While none of these is the very heart of Google (Search, AdWords), ..."

Think again. AdWord/AdSense came out of "Applied Semantics", that they bought
in 2003 for $102MM.

Here's the full list:
[https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...](https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Google)

~~~
ccera
Applied Semantics had nothing to do with the creation of AdWords. AdWords was
created in-house by Google years before they acquired Applied Semantics. It
was an extremely successful and lucrative operation long before Applied
Semantics ever entered the picture.

Google also developed and launched AdSense prior to acquiring Applied
Semantics.

They acquired Applied Semantics because it was complementary to what Google
had already developed.

~~~
yawn
[http://googlepress.blogspot.com/2004/04/google-acquires-
appl...](http://googlepress.blogspot.com/2004/04/google-acquires-applied-
semantics.html):

"A key application of the CIRCA technology is Applied Semantics’ AdSense
product"

Is this wrong?

------
viame
Very simply, they cannot. You need to know how to run a business and how to
adapt to changes, if you want to be as successful as Google. In my opinion
Yahoo! needs to learn that first.

~~~
sigzero
Do you have any idea what you are talking about? The new CEO knows ALL of
that.

------
michaelochurch
The fact that someone would even pose this question proves what a sham the
software industry has become.

If your method of growth is acq-hiring, your company ends up like that tower
of random debris (that looks like a dick) that Kefka lives in at the end of
_Final Fantasy 6_.

------
dotcoma
No.

