> Yahoo had very little of technological value and was actively trying to destroy its own search business amongst other properties at the time.
I'm not sure what you are referring to there. There was a lot of investment going on in search at the time. Certainly, critics (including me) felt it was maybe not the right investment, but "actively trying to destroy its own search business" doesn't ring true.
> They really were in a prime position and bungled it extremely badly, I think they had maybe 20% of the search market at the time.
20% market share was unfortunately, a very weak position that was deteriorating pretty rapidly. The network effect ensured that the search business would continue to reward the dominant player dramatically more so than the smaller players, even if the smaller players had a technically superior product, which was what Bartz was getting at.
"She made it very clear the equation for success was money spent === great search engine results, ignoring how Google came into being in the first place."
That's not ignoring how Google came into being, and the "money spent === great search engine results" isn't exactly what she said either. There's a reality that the business had evolved (not accidentally) to the point where barriers to entry were increasingly higher and more costly and the rewards disproportionately went to the dominant players. It is typical Harvard Business School stuff, because it's not at all an unusual circumstance in business.
> It still feels like a wasted opportunity to me, it seems so weak to just throw your hands up in the air and say it’s too hard to make your extremely successful search engine better.
If you'll recall, they made the engine better; it didn't matter. Less than a quarter of the market would switch to another engine even if you gave them absolutely the worst results, and smaller differences in search quality impacted the behaviour of less than 10% of the market. Hell, there was still a ton of traffic going to Alta Vista despite that engine no longer being different from Yahoo's. Meanwhile the advertisers hugely favoured larger market share, and the consequently more efficient market yielded huge marginal rewards in terms of quality and profit. The search engine battle had largely already been lost by then; it was largely lost several years prior (arguably as far back as Google's AOL deal). The opportunity wasn't "wasted": they'd thrown pretty much everything at it, and come up short.
To this day, Google still has a dominant market share, despite a plethora of would be competitors. Sure, there is a possibility for a market disruption to change the game, but in a decade and a half, that has yet to emerge, so if you'd bet on game changing disruption in 2008 (and many investors did), from an investor's perspective, you'd have lost that bet.
It's almost like there are more ways to make money than search. ;-)
Bartz really wasn't there long enough to execute on a strategy, but her point was that the opportunity cost of continuing to try to win the search engine wars was far greater than the likely value of the investment.
At least from a historical perspective she was right. Alibaba, social media, mobile, games, content, etc. All of those spaces had lots of opportunity for the right moves.
> Bartz really wasn't there long enough to execute on a strategy, but her point was that the opportunity cost of continuing to try to win the search engine wars was far greater than the likely value of the investment.
True, but don’t you kind of have to win at something to retain users?
It’s just unclear to me where they wanted to invest the freed money.
At such a large company? Not really. You can certainly start execution of a strategy, and she did, but it takes a long time to turn such a big boat and fully realize a strategic vision.
I didn't suggest she was "doing so well with this vision". If anything, I was pointing out that it'd be hard to know if the company would be "doing well" with her vision, given the limited time window.
It was a short stint, and my memory is dull, so I can't remember which products were launched under her watch, but that's the wrong measure in first place (indeed, this was the company from which the Peanut Butter Manifesto sprang). There's really not a lot of question about her changing a lot of things at the company though. I found this article talking about the impact she had after the first four months: https://www.reuters.com/article/stocksAndSharesNews/idUKLNE5...
It's been a long time but I seem to recall Yahoo's approach being decidedly old school. They were trying to create or buy must-read and must-watch content to sell ads against. The marketing message was that at Yahoo.com you will find all the news and entertainment you could ever need!
Google is doing that (particularly with YouTube), as is everyone else. I don't think they break down the search vs. other ad business any more, but at last check it was still the biggest single source of revenue for the company (admittedly, I believe YouTube and adsense collectively generate more revenue for them now, but both of these are primarily showing ads on other people's content).
Yahoo at the time was #1 in a number of categories, including fantasy sports, finance, etc. In other areas they were #2 and the marginal value of being #1 vs. #2 wasn't nearly as great as in search. The focus wasn't so much higher quality/yield ads (I mean, that was there, but everyone was always looking for that), but investing in other kinds of online services that would get a better ROI.
As did I
> I'm amazed share holders didn't sure Jerry Yang and the board for avoiding the sale.
There was a lawsuit: https://www.seattletimes.com/business/yahoo-settles-lawsuits...
> Yahoo had very little of technological value and was actively trying to destroy its own search business amongst other properties at the time.
I'm not sure what you are referring to there. There was a lot of investment going on in search at the time. Certainly, critics (including me) felt it was maybe not the right investment, but "actively trying to destroy its own search business" doesn't ring true.
> They really were in a prime position and bungled it extremely badly, I think they had maybe 20% of the search market at the time.
20% market share was unfortunately, a very weak position that was deteriorating pretty rapidly. The network effect ensured that the search business would continue to reward the dominant player dramatically more so than the smaller players, even if the smaller players had a technically superior product, which was what Bartz was getting at.
"She made it very clear the equation for success was money spent === great search engine results, ignoring how Google came into being in the first place."
That's not ignoring how Google came into being, and the "money spent === great search engine results" isn't exactly what she said either. There's a reality that the business had evolved (not accidentally) to the point where barriers to entry were increasingly higher and more costly and the rewards disproportionately went to the dominant players. It is typical Harvard Business School stuff, because it's not at all an unusual circumstance in business.
> It still feels like a wasted opportunity to me, it seems so weak to just throw your hands up in the air and say it’s too hard to make your extremely successful search engine better.
If you'll recall, they made the engine better; it didn't matter. Less than a quarter of the market would switch to another engine even if you gave them absolutely the worst results, and smaller differences in search quality impacted the behaviour of less than 10% of the market. Hell, there was still a ton of traffic going to Alta Vista despite that engine no longer being different from Yahoo's. Meanwhile the advertisers hugely favoured larger market share, and the consequently more efficient market yielded huge marginal rewards in terms of quality and profit. The search engine battle had largely already been lost by then; it was largely lost several years prior (arguably as far back as Google's AOL deal). The opportunity wasn't "wasted": they'd thrown pretty much everything at it, and come up short.
To this day, Google still has a dominant market share, despite a plethora of would be competitors. Sure, there is a possibility for a market disruption to change the game, but in a decade and a half, that has yet to emerge, so if you'd bet on game changing disruption in 2008 (and many investors did), from an investor's perspective, you'd have lost that bet.