The End of Yahoo Era by Verizon

Yahoo was one of the first companies which opened the way in the internet world for many of us.

Now Yahoo reached almost end of its life as an independent company.The American telecommunication company Verizon Communications announced on Monday that it acquires Yahoo’s core internet business. Yahoo’s board approved the sale at $4.8 billion. From just a cell phone company to transforming to something more is the purpose of this deal. The news grabbed the attention of tech giants, industry leaders, and mobile app development companies USA and across the world.

So we have to know first why Yahoo failed:

What went wrong with Yahoo?

A leader in email as well as online news and search in 90s and early 2000s- Yahoo, why it failed to sustain?

1. The series of bad choices of CEOs 

It is easy to criticise the current CEO of Yahoo Marissa Mayer and her strategy, but she is just the current CEO in a long line of sub-optional CEOs of Yahoo.Yahoo appointed CEOs at an increasingly rapid rate before appointing Mayer.

 In 2008 Carol Bartz was appointed as Yahoo CEO, then Tim Morse, Scott Thompson in 2012. The change of CEOs at this rate could not give time a company to sustain. Scott Thompson did 2,000 job cuts, earned himself $7.3m for 130 days’ work. Then Ross Levinsohn became the Yahoo CEO and left before Mayer became CEO in July.

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2. Yahoo didn’t rate technology and didn’t hire good programmers

"Yahoo treated programming as a commodity. The job of programmers was just to take the work of the product managers and designers, and translating it into code," claimed former Yahoo employee Paul Graham.Facebook, Google, Microsoft hired the best programmers, but Yahoo put everything in the hands of project managers and designers.

3. Yahoo behaved as a media company, not a technology company

  Yahoo continued as a media company with dollops of technology, though, it didn’t come in the race of Google and Facebook. Google and Facebook advertisement platforms are effective with content-strategy. But Yahoo created advertising products and platforms, but not created user-centric content. No-one wants to pay for subscribing to newspapers and magazines without getting pre-subscription benefits. But Yahoo focussed more on it and get nothing as compared to Google and Facebook.

4. Hadn’t buy Google 

 In 2002 Yahoo had a chance to buy Google. Then after months of negotiation the Chief Executive Terry Semel balked at the $5 billion price. Somebody tech leaders says this was the biggest mistake done by Yahoo.

Yahoo Timeline

• 1994 – Yahoo founded
• 2000 – Yahoo valued at $125bn at height of dot.com boom
• 2002 – Yahoo didn’t purchase Google
• 2008 –Refused Microsoft’s $44.6bn offer
• 2013 – Yahoo acquired blogging site Tumblr
• 2015 –Yahoo faced net loss of $4.4bn
• 2016 – Verizon agreed for $4.8bn deal to buy yahoo

DEAL FROM THE EYE OF VERIZON

This is a quite big amount for a company whose online business falling from grace. Yahoo at one point was the first name coming into mind for internet search, but now another companies are doing that job quite good.

Verizon chief executive Lowell McAdams wants a larger share of the booming digital advertising pie. And he thinks this deal will help him. Verizon is a leading US mobile phone network, which has a wealth from smartphone users.

Verizon purchased AOL a year ago. Now with Yahoo, Verizon will gain Yahoo’s 600 million monthly active mobile users, also its email service, Tumblr, Yahoo Finance etc.

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Sites like Engadget, Yahoo Finance, Huffington Post and TechCrunch will now do advertisements for Verizon, that can be more effective depending on the knowledge of Verizon about its mobile customers. It will help Verizon to compete with Google and Facebook.

Simply Yahoo couldn’t do it alone as it doesn’t have enough data on its one billion or so monthly users to target and to stand in the race of Google and Facebook.

We will hear more concrete details from Verizon in coming time. It may be using Yahoo brand, or maybe not.

Regardless, Yahoo as an independent company is finished and there is new era started with the name Verizon.

This is the lesson for all tech industry including web application development companies USA, mobile apps development companies NYC and overall software industry across the world.

Bottom Line

 “If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success.” - John D Rockefeller (Founder of  the Standard Oil Company & Philanthropist).