Magazine

How Yahoo Got So Ho-Hum


By Timothy J. Mullaney

I'll never forget the day I met Yahoo! (YHOO) President Jeffrey A. Mallett. Probably a dozen BusinessWeek editors crowded into a room like so many college kids waiting for a chance to see the Beatles. Such a picture he painted: Voice over the Web will take off in 2000. Yahoo will help people pay their bills online. The company will revolutionize direct selling with a huge consumer-preference database. And so on. We editors ate it up. We did everything but stand outside his hotel and scream.

But instead of Baby, You're a Rich Man, Yahoo's plans have produced A Hard Day's Night. Yahoo.com looks an awful lot like it did in 1999. And that's the problem. Yahoo set the standard for Web portals--with clean layout, information from all over the Web organized in handy directories, and a MyYahoo! feature that lets you personalize news and other information on your screen. But nothing has been added since 1999 that's nearly as fresh.

GRINDINGLY DULL. In fact, too much that Yahoo has done since has been mediocre or me-too. Its 1999 purchase of GeoCities brought tens of thousands of personal Web sites that are simply too boring to make either good content or good business. The Broadcast.com deal brings TV online, but Yahoo's programming is uninspired. The portal has auctions and instant messaging, but so does everybody else. And its new subscription services don't deliver distinctive value or offer Yahoo a competitive advantage.

Take GeoCities. I looked at more than 100 GeoCities pages and wouldn't visit any of them again. Why? For starters, the basic page is pretty limited. On most sites for unsigned bands, for example, there isn't enough server space set aside to offer downloadable tunes or streaming video clips. But there is room for pictures of the Massachusetts bar band Ace*Hole giving the camera the finger. Charming. Site after site is as grindingly dull as your pal's vacation slides.

Yahoo! Broadcast, n?e Broadcast.com, may be even more disappointing. On the day I write this, its featured events include a hockey game, a basketball game, and an interview with actor Ed Asner: respectively, one on ESPN, one on TNT, and one so boring I wouldn't watch it. There are two problems with consumer Webcasting: a shortage of interesting content not already provided on TV or radio and a shortage of bandwidth to provide streaming-video content. If I have a computer available, I'm probably near a TV, and if I'm near a TV, I'm not watching a National Basketball Assn. game online, ever. Webcasting does improve Yahoo's news and finance coverage. But most of its video clips are a few seconds or perhaps a minute or two long.

Yahoo's paid services look like another bust. Online bill-paying doesn't seem promising. Banks bundle bill-paying services with their computer banking. Brokerages bundle into trading commissions the real-time stock quotes and alerts Yahoo would like people to pay $9.95 a month for.

It's hard to see where Yahoo's edge is going to come from. A music-downloading service is coming this summer, but it'll be tough to catch up with America Online (AOL), which has the well-regarded Spinner music channel and is building synergies with its new Time Warner divisions.

Over the years, Yahoo followers spent a lot of time debating whether Yahoo was a technology company or a media company. But since 1999, it hasn't been great at being either. AOL has stepped up from where it was in 1999. Yahoo hasn't. Mullaney writes the Clicks & Misses column for BusinessWeek e.biz.


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