The Yahoo disadvantage

Yahoo’s 22-year life as an independent company has come to an end with its sale to Verizon for $4.8 billion. For all the promise it held as the first port of contact for a generation that was new to the Internet and its possibilities, the end has been anti-climactic. Yet, such an ending had been increasingly anticipated for many years. After a heady start as ‘Jerry and David’s guide to the World Wide Web,’ a list of Web links named after its Stanford University student founders Jerry Yang and David Filo, Yahoo quickly lost the first-mover advantage. The company survived the dotcom bust of 2001, but from then on Yahoo could only play catch-up to a company younger by two years and founded by fellow Stanford students: Google. An end to the journey was imminent especially after the struggles in recent years to make itself relevant again in an Internet world very different from the one it had been born into — one dominated by search and social media. It is noteworthy that Google and Facebook, leaders in this world, were in the past considered by Yahoo for acquisition. Efforts by Google-import Marissa Mayer, Yahoo’s CEO since 2012, to give it a new direction resulted in a few high-profile acquisitions such as Tumblr, but evidently Yahoo could not fundamentally reinvent itself.

Ms. Mayer could have only done so much. It could be argued that Yahoo lost direction pretty early. Experts have repeatedly pointed out that Google figured out what the Internet was all about much better than many of its rivals at the time, including Yahoo. While Google followed where the user went, Yahoo created a portal and expected to box in the user to its properties. Yahoo’s choices led media expert Jeff Jarvis to refer to it as “the last old-media company”. The lesson is not lost on anyone: platforms always trump portals. But this is not the only opportunity that Yahoo missed. It bought Flickr much before the dawn of the Instagram age but could not do much with the photo-sharing site. Then, in 2008, Microsoft made a bid to acquire Yahoo for a whopping $44 billion. Yahoo rejected the offer, saying it was “substantially undervalued”. It also recently decided to write down a good chunk of the value of Tumblr, the blogging network it had bought for more than a billion dollars just a few years ago. Perhaps its best decision, amid missed opportunities and misreadings, was the $1 billion investment made in 2005 in the then fledgling e-commerce company Alibaba, which is today a giant. After the sale to Verizon, this investment is all that Yahoo’s shareholders will be left with. And this amounts to a very healthy $41 billion.

Important Words

1>Anti-Climactic(Adjective) --Something that causes disapointment

2>Anticipate(Verb) -- To realize beforehand

3>Imminent(Adjective) -- Likely to occur at any moment

4>Acquisition(Noun) -- the act of acquiring or gaining possesion

5>Fledge(verb) -- to bring up until it is able to fly.

6>Whopping(Adjective) -- Very large, huge, massive, enormous
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[Editorial From The Hindu Only for Educational Purpose]

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