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Yahoo: So Sometimes A Tech Company Is Really Just A Tech Company?

Posted by: Jon Fine on October 18, 2006

Regarding Yahoo’s current slump: A bunch of questions are rattling around my brainpan, which I list below in hopes of hearing your thoughts on them and Yahoo’s situation in general. I’m going to lean, crutchlike, on the excuse that I’m still jetlagged from work-related travel in Europe last week to account for both my inability to land on any one of these answers and my utter silence for the past week.


1. Mediaheads like myself—that is, East Coast and employed by old-media entities—were all nodding our heads when Yahoo began hiring people like Greg Coleman (former head of publishing at Reader’s Digest Association), Wenda Millard (sales exec at Ziff Davis and elsewhere) and LA-ers like Lloyd Braun and Terry Semel to senior positions. You know—how smart to bring old-world media savvy to the brave new frontier, etc. In retrospect, this leads me to …

2. Did Yahoo make a mistake in thinking theirs is a media-driven business and not a technology-driven business? After all, Google has done much better focusing on building off one very good thing, instead of building off an aggregation of many, many things.

3. Is it possible that if you factor out Google that there is a growth slowdown brewing for the biggest players in new media—and note I said ‘growth slowdown,’ not ‘recession’ or anything like that—and that Yahoo is the leading edge of this?

4. A year ago, many ad and marketing types just loooovvved Yahoo. Do they still?

I honestly have no idea what the answers are the points 3 and 4, and would like to know if I’m all wet.

Reader Comments

David Neubert

October 19, 2006 1:36 PM

You are still seeing good revenue growth at Yahoo - Yahoo reported a 19% increase and Google similar growth. But there does seem to be something affecting the whole internet advertising market. In his blog ( Henry Blodget writes of the declining ROI for advertising dollars on the internet.

(You don't mind me mentioning another blog do you? It in no way affects my loyalty to this one)

Another comment: Most financial types are calling for some sort of restructuring/house cleaning at Yahoo right now. Management seems to be getting the much of the blame for Yahoo's recent woes.

Disclosure: (I own YHOO for my personal account, I do not own GOOG).

Edward O'Meara

October 23, 2006 5:22 PM

I'm a little confused as to whether you think Google is a tech company or a media company, as you've categorize Yahoo. Google is also hiring lots of traditional, senior media people into sales jobs (except Google requires straight A's since pre-school) and being distracted by lots of different businesses all which seem to chase advertising dollars.

As to the slowdown, could it not be that there are so many types of new media, many of which are not accounted for by the financial markets or syndicated data providers, that you just can't see what's being spent?

Jon Fine

October 24, 2006 5:50 PM


I don't see Google as a media company. I see them as a company that creates applications and uses a few of them to sell ads around other people's content. They're not at work shooting short films to put stuff up on Google Video isn't what they're making in-house.

Regarding your second point, I broadly agree. But it's always weird when one player is hit by a slowdown and others aren't, and you're not hearing from any other major Internet players that things are slowing slightly in the big, basic ad categories.


November 3, 2006 8:14 PM

Mr. Fine, I just found you and I think you're great. Okay, enough flattery. Yahoo's problem is its lack of focus. It cannot be all things to all people. Mass media isn't working on TV, radio, or movies -- why on earth would it work on the Internet?

Also, I believe there is a slowdown coming, because of recent research I have read. (I should probably disclose that I work for a media research and consulting company.) All the same, the Internet is suffering, severely, from annoying and often unbearable advertising. This is a huge problem.

In order to monetize the new media, consumers need to see the ads on the page. Right now, they do not. This leads me to believe that the overall effectiveness of Internet advertising is fairly low. (I do not have specific research to back up this statement.)I fear that if Internet advertising doesn't work, then we're going to see companies jump away from the Internet for a while.

Frankly, all forms of advertising and media have their place. They just, well, need to do a better job of finding it.

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