Yahoo The Next AOL?

December 4, 2006

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I don’t think there is any doubt that Yahoo has problems, but every large company has problems to some extent. AOL suffered from a dying dialup internet access business, along with a bad merger. I think it’s hard to really equate Yahoo with AOL in this case as they aren’t so locked into a business that was obsolete due to technology.

Yahoo seems to be in a negative spot right now for the media and financial world, and I think so much of that has to do with them not beating Google at search and search monetization along with not acquiring YouTube or Facebook. Search is obviously a huge business, and Yahoo needs to improve there. But Yahoo kicks Google’s ass in many other areas, as the recent shutting down of Google Answers while Yahoo Answers thrives.

While Google seems to dominate technology, Yahoo is ahead of Google when it comes to actually relating to and building services for real people. I don’t think this should be underestimated. Yahoo has a top content property in every major vertical. It’s tools such as Yahoo Mail, MyYahoo, Yahoo Photos, and others also continue to lead in their areas. Not only that, they continue to monetize those properties in many ways, and have long been a leader in display advertising.

Sure, Yahoo didn’t buy YouTube or Facebook, two deals which looked too expensive to me, but it’s not as if they’ve ignored the social web altogether. They’ve acquired some of the best properties such as Flickr and del.icio.us, and those properties have flourished under Yahoo.

So I’d agree they could use some stronger leadership, a cohesive vision, and probably improve in many ways, but by no means do I see Yahoo dying a slow AOL-death.