I land in the valley and see in a surprising move, Jerry Yang takes over as the CEO of Yahoo. Terry Semel’s exit was more or less a foregone conclusion, but co-founder Jerry taking the CEO role is a definite surprise.
Few months back, when Yahoo announced a new restructuring, I wrote, the market perception remains pretty much to be desired. I also noticed that the peanut butter manifesto has not been taken too seriously. Come to think of it,If Yahoo can undergo this turmoil, fate of the innumerable web wannabe's are best left to the imagaination of their backers.
Jerry Yang outlineshis vision of a Yahoo! that executes with speed, clarity and discipline. A Yahoo! that increases its focus on differentiating its products and investing in creativity and innovation. A Yahoo! that better monetizes its audience. A Yahoo! whose great talent is galvanized to address its challenges. And a Yahoo! that is better focused on what’s important to its users, customers, and employees.
Quite neat. Yahoo has massive assets. It has the best content, vertical portals and a good share of coloborative tools. It has a good brand image among its customers –but probably it is not aggressive enough on building the me-first or me-best image. It has sustainable critical mass in terms of content, infrastructure and advertiser base. There are incredible challenges in running the optimal mix of businesses, which we have identified as content, portal, search, marketplace/e-commerce, communications (IM, e-mail, VoIP), and payments. Mobile foray could potentially help Yahoo create a new niche. Better execution and top notch performance in leveraging its assets is the key.
Yahoo is a global brand - a very liked one at that. Like what Jerry says, Yahoo has massive potential, drive, determination and skills, and he and his team has to make sure that the external perception of Yahoo!(read performance)accurately reflects that reality. They may not have much time ahead to make this happen.
Architecting high volume sites is a challenging task – Many engineering disciplines come together in creating a highly available site that users around the world can access routinely by typing a URL address. Recently, I called the architectures of high performance sites such as eBay, Amazon & Google as modern wonders of the world. Web site performances are becoming more and more important - once might see while downloading, users are asked to select their servers of choice from which to download – mostly geographical proximity /traffic bandwidth information helps users to choose from where to download. For an ordinary user, website availability and speed of loading the site is of paramount importance – whatever be the bandwidth availability – very often users think that fast loading sites are an important measure of the quality of the site. Jacob Rosenberg points out the range of variance that users may experience owing to location. Keynote tests of a single-site web application -Digg.com delivered from the West Coast of the US to: - San Jose, CA: 403ms (.4 seconds) - New York, NY: 1,993 ms (2.0 seconds) - Frankfurt, Germany: 3,658 ms (3.7 seconds) - Bangalore, India: 6,224 ms (6.2 second) Some believe that faster loading sites get better traffic. Yahoo’s chief performance Yahoo man, Steve Souders is writing a series of blogs on Yahoo! Developer Network describing best practices he’s developed at Yahoo! for improving performance. He advocates that 80-90% of the end-user response time is spent downloading all the components in the page: images, stylesheets, scripts, Flash, etc. Rather than starting with the difficult task of redesigning your application architecture, it's better to first disperse your static content. This not only achieves a bigger reduction in response times, but it's easier thanks to content delivery networks. A content delivery network (CDN) is a collection of web servers distributed across multiple locations to deliver content more efficiently to users. The server selected for delivering content to a specific user is typically based on a measure of network proximity. For example, the server with the fewest network hops or the server with the quickest response time is chosen. Steve’s recent presentation(made along with Tenni Theurer) on the topic of High Performance Web Sites emphasizes the optimizing website performance by focusing on front end issues. The content richpresentation is full of so much of data and covers several underlying principles. The golden rules of performance are: 1. Make fewer HTTP requests 2. Use a CDN 3. Add an Expires header 4. Gzip components 5. Put CSS at the top 6. Move JS to the bottom 7. Avoid CSS expressions 8. Make JS and CSS external 9. Reduce DNS lookups 10. Minify JS 11. Avoid redirects 12. Remove duplicate scripts 13. Turn off ETags 14. Make AJAX cacheable and small
In the end the advise boils down to: • Focus on the front-end • Harvest the low-hanging fruit • User response times can be controlled
WSJ reports that talks happened between the two companies & that the merger discussions are no longer active, but that doesn't preclude the two companies from some other form of cooperation. So the merger possibilities have died down – temporarily!! To me it points to a couple of things – both indisputable: There is no logic to say that large deals may not happen – as a matter of fact, I feel that in this current age, no deal, no matter how large, or one that appears audacious ,is out of the realm of possibility. Secondly, stakeholders are expecting Yahoo to act decisively to regain the lost edge it had in the internet space – where Google is sees as smartly marching ahead.Yahoo is massively under leveraging its brand strength, content and platform superiority. Companies like Microsoft, eBay and Yahoo would always keep talking about possibilities and frankly they should be talking and it is fair to expect some action centered around Yahoo in the days to come.
Will Microsoft buy Yahoo? That’s the prospect that’s gaining currency this morning . I wrote a brief note at Sandhill.com on this emerging development. Few days back, I wrote that Google’s aggression is not only going to help its cause but very likely to drive Yahoo and Microsoft to come together. Its interesting to see what all a shrewd market leader can do – expand the market, consolidate its position and define what competition needs to do!! The increased likelihood for consolidation within the Internet space given the challenges of running the optimal mix of businesses, which we have identified as content, portal, search, marketplace/e-commerce, communications (IM, e-mail, VoIP), and payments looks like is waiting to happen. Every advance being made in anyone of the spaces here needs resources to build and expand but Google’s money making machinery makes all these advances from players like MSN & Yahoo look puny. How can the competition get on an even keel – perhaps when Microsoft buys out Yahoo. It needs a sustainable critical mass in terms of content, infrastructure and advertiser base and Yahoo comes in handy there. Chances of organic growth look too dim for Microsoft to look at alternate ways of getting there center stage and literally fight eyeball to eyeball with Google for traffic and monetization opportunities. Outside of Yahoo, the only other player that Microsoft can look at is eBay. The acquisition can provide Microsoft with powerful assets – proven scalable platforms, stakeholder relationships, monetizable content and channels drawing eyeballs. On the flip side, mega deals always carry huge risks – no one can forget Time Warner – AOL fiasco . I get a sense that something might happen – but as again execution would be the key – the opportunity to change the rule of the game is very bright if these two players choose to come together. Read the full note here.
The web advertising business has become too hot suddenly. Hot on the heels of Google Doubleclick deal Yahoo today announced acquisition of Rightmedia . While commenting on the Google-Doubleclick deal,I wrote that Google’s aggression is not only going to help its cause but very likely to drive Yahoo and Microsoft to come together. Its interesting to see what all a shrewd market leader can do – expand the market, consolidate its position and define what competition needs to do!! Well Yahoo has responded swiftly – they have acquired the remaining stake in Rightmedia,which runs an ad exchange, quite different from an ad network Lets look at this : Historically, Yahoo has been the leading players in the banner display ads segment. Till recently, Yahoo had the highest traffic on the net and it used to charge advertisers to let their brand reach out to users and in the process collect money for this. Yahoo’s revenue stream used to be based on charging cost per thousand/million traffic for ads and this is not linked to clicks – much like a static TV audience coverage . RightMedia could help Yahoo go beyond, it can help bring together an ad exchange for display ads with something like an auction style pricing model. The key difference that is brought out here centers on the fact that Right Media owns an ad exchange, quite different from an ad network. While Ad networks typically aggregate ad inventory from publishers and resells it to advertisers ad exchanges are more like a marketplace where publishers and advertisers can come together – do a mix and match and finalise ads the way they want to be run etc. In this revised model, Ad networks become the consumers of the ad exchanges –albeit a very big class of customers by themselves. This is different from Google’s forte : text based ads that appeal to a broad based set of advertisers – typically small business. On paper, this is a smart position for Yahoo to take – the market exchange brings together both the publisher & consumer as against just being a powerful context synthesizer with wider delivery reach like Google. With this RightMedia edge, Yahoo’s ability to build more and more traffic and rope in high quality advertisers would be very integral to its renewed success – execution will decide how smart this move is and whether the acquisition pricing is right. Yahoo publishing network could never compete effectively with Google’s adsense despite some occasional good reviews in its favour. Infrastructure like Right Media/DoubleClick would have to integrate well with the display engines like that of Yahoo/Google to produce lasting success. Terry Semel points out that supply and demand should be regulated by the marketplace, not a closed platform. Right Media provides a democratic model that empowers advertisers with all of these benefits. Fact is that with this acquisition, Yahoo gets a small chance to get one better than Google in the ad business – but one will have to see how fast and effective its execution would be to capitalize on this. Execution will make the difference.
Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld "All views expressed are my personal views are not related in any way to my employer"
