Grads, brace yourselves. Yahoo cut 2,000 from its workforce last Wednesday, which is bad news – really bad news – for those of us looking to work in the Bay Area. Those freshly unemployed, highly qualified Yahooligans will flood the labor market, making the job hunt that much more difficult for outgoing seniors such as myself.
But I can’t say that I am completely surprised. The financial forecast for the Sunnyvale-based company hasn’t been, well, sunny. For the past decade, Yahoo has watched itself slip into irrelevance as Facebook and Google flew by on technology that was faster, better and more equipped for the mobile era.
It’s not that Yahoo isn’t popular. Yahoo is, amazingly enough, still one of the most heavily trafficked sites in the world. Every month, over 700 million unique users visit at least one of Yahoo’s branded sites (Finance, Sports, News, etc.) – that’s nearly half of all internet users worldwide – but the company can’t seem to profit from its visitors.
Yahoo remains one of the largest websites in the United States. So why, then, is such a huge force in the tech world struggling to keep its head above water? I was intrigued and proceeded to investigate.
Well, for one, the company can’t seem to commit to anything. It has serious internal problems‚ having had five different chief executives in the past 10 years. It also has major identity issues. Yahoo was just a search engine before growing into a web portal, like Google, offering e-mail, news and such. But today’s cash-strapped Yahoo hasn’t yet decided whether it wants to focus on technology or media. Is the money in search or content?
This last question seems obvious to me. Yahoo has outsourced its search to Microsoft’s Bing since 2009, rendering its in-house search team useless. Its branding sites bring in the majority of its traffic anyway, due in part to its stronghold over fantasy sports fanatics. But alas, the deeply troubled company is too proud to let go of the technology that brought them to the Web in the first place.
Yahoo’s decline matters for two reasons: a) the aforementioned influx of ex-Yahoos that will push the ever-diminishing supply of jobs down even further and b) the lessons it teaches us about the volatility of tech companies, and the investment risk those companies pose.
I realize that thinking about investment seems premature. In my economics class, in which there are hundreds of graduating seniors, our professor asked who among us had already secured a job. Only two students raised their hands. The job prospectus is not looking very bright. Our pockets will not be as deep as our parents’, but investing in stock may be a course of action for those who feel they can play their cards right. But, amateur investors, be wary of companies like Yahoo that lack direction and are resistant to change. Know when to jump ship.
Yahoo has grown far too corporate, far too bureaucratic, to function. Michael Smith, formerly of Yahoo Southeast Asia, wrote on his blog rather bluntly that his former employer needed to “trim the fat.” Perhaps that meant laying off 14 percent of the company. Ironic, really, for a company whose name stands for “Yet Another Hierarchical Officious Oracle.” Yahoo is indeed another bureaucratic self-important authority — one that is bound to fail if it keeps on its current track.
This administrative oversaturation is symptomatic of a company that went wrong after it went public, something to keep in mind as Facebook’s lucrative billion-dollar IPO nears. One should take heed of the rise and fall of online empires (also the name of an amazing infographic by CenturyLinkQuote — just Google it), and how they eventually fade into oblivion. The technological environment changes so often that evolving can be difficult for highly organized companies with large governing bodies and slow decision-making processes. The tech industry is conducive to small, risk-taking startups for this very reason.
These days, Yahoo is so preoccupied with filing patent-infringement suits that it has failed to create any new technology of its own. Yahoo’s latest lawsuit, against Facebook, seems like a lame attempt at prolonging its own demise. As the Hollywood Mark Zuckerberg once said, “If you invented Facebook, you would’ve invented Facebook.”
Oh silly Yahoo, tech giant of yesteryear, how desperate you are to stay relevant and alive.
You can reach NICOLE NGUYEN at her non-Yahoo-affiliated address, firstname.lastname@example.org.