Does Yahoo Still Need to Slim Down or Is It Bulimic?

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yahoo_smallADOTAS – We knew it would be arriving any day — the layoff wagon finally rolled into Yahoo this week, its haul filled with pink slips. Though Yahoo corporate fluctuated from tight-lipped to extraordinarily vague, around 4% of the workforce were given severance packages — the final figure was 600 of Yahoo’s more than 14,000 global employees.

There was plenty of media rubbernecking (Live-blogging the layoffs? Really?) and cut employees lashing out on Twitter and other social mediums, with the common sentiment best represented by a five-year veteran and pink-slip receiver telling TechCrunch he’d “never seen this place in such shambles.

Oh, but he didn’t know about the services being “sunset” — leak of an internal post-layoff presentation showed that social bookmarking product Del.icio.us is getting shelved, along with Altavista, MyBlogLog, Yahoo Bookmarks and Yahoo Picks. While eight products are getting killed, services such as Upcoming, FoxyTunes, Sideline and FireEagle were listed under “Merge.” Internet users were outraged; Business Insider has a great roundup of some of the Twitter responses.

Alas, with these latest staff and service cuts, the “Yahoo Is So Over” headlines are coming out in force. Many similar headlines appeared last year after another round of layoffs… You know what? I think I see a “Yahoo Is Dead! DEAD DEAD DEAD!” headline every two weeks.

Just about every service getting the ax is outdated, hasn’t been updated or frankly irrelevant. Think of them as residents at a Web 2.0 nursing home — many were great ideas that had run their course or been perfected or improved by startups or other Internet giants. Just like with MySpace and News Corp., the Yahoo acquisition of MyBlogLog and other startups might have been the death knell.

(For some reason I can’t help thinking about StumbleUpon, which bought itself back from acquirer eBay and is now more successful than ever. The social discovery service could have easily inhabited the Web 2.0 nursing home up the street.)

Many of the just-cut services were just waiting to die. The Flickr department was once again smacked with pink slips, which isn’t surprising considering Facebook’s domination of photo sharing.

Yahoo keeps stripping down, but the company was an unfocused behemoth (unlike Google only in that Google is a highly successful unfocused behemoth). Now it’s focusing on what it does best — serving as an Internet portal and media company. It still has a 16.2% of all display dollars (though that share is getting chewed into by Facebook and Google).

The real question — one that AOL is pondering as well — is whether being a portal is a viable enterprise in the current climate, especially as Facebook yearns to become the access point to the web. Is Yahoo getting too skinny? Will its services seem too slight to warrant attention? Or does it still have more fat to trim?

2 COMMENTS

  1. Yahoo continues to lack a clear vision or direction that will help it overcome it’s ‘been there done that’ products and services. Unfortunately most large companies lack innovation or disruptive products and services, yahoo is one of those large ‘me too’ companies now. Long gone are the early days of growth and innovation. Such examples like Right Media just drive home the point. Pining for the past is hopeless, consumers and investors have moved on to other disruptors like facebook, groupon, rubicon, etc. Only a select few can continue to innovate while being massive. Yahoo isn’t one of them.

  2. Well Gavin, I would go as far as saying that Google is an unfocused behemoth. Their recently launched project boutiques.com, though it looks not very Google like on the look and feel of it but it is Google like all the way to its core.

    If you check Google’s mission: to organize the world’s information and make it universally accessible and useful. This is what boutiques.com does. Or another example why Google started buying all those dark fibers five years ago, such long-term capital expenditures are quite obvious today with their various projects. So there is some method to their madness. FYI, I do not work for Google.

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