360, Blo.gs, Babel Fish, Bix, Brickhouse, Briefcase, Buzz, Fire Eagle, FoxyTunes, Gallery, IndexTools are all names of products that Yahoo launched and discontinued or never took off. Mind you, thats only a very selective list that covers just the first 9 letters of the alphabet. - Lots of failed attempts at innovation
Now, there is nothing wrong with discontinuing a product or if a product never took off. Thats the price you pay for innovation - you quickly implement products / features, listen to feedback from early adopters and iterate - most of your products or features will not take off, but the few that do will make all the difference. The public debate and concern over Yahoo is because, after all these numerous attempts at innovation, nothing has taken off in a long time. Google, whose annual revenues were once less than Yahoo's quarterly revenues, now posts Yahoo's $6.5 billion annual revenue as its own quarterly revenue - everyone talks about how Google is going to grow a Yahoo every year and wants to hit $100 billion in annual revenue. - Failing during the innovation process is ok.
All the public debate and concern about Yahoo is not because we dislike Yahoo, its because we have fond memories of Yahoo from its early days - it was the first web service that reached mass adoption at its scale - and would love for Yahoo to regain that leadership position. - Constructive criticism for Yahoo!
To be restored to its former glory, Yahoo needs a few killer products. Killer products come from a culture of innovation. Innovation happens, when you can rapidly release a basic prototype to early users. With over 600 million users using Yahoo's current services, I am not sure its easy to find who the 600 early adopters are. Even if Yahoo Product Managers identified those 600 early adopters, it is incredibly difficult for them not to leverage the company's biggest selling point - its 600 million users. Even if Yahoo were to test innovation with only 1% of its user base - thats still 6 million users. In order to release a product to 6 million users and expect most of them to be happy, Yahoo will have to anticipate what 6 million people need and build all that into the product in the hope of a "complete product", when what is actually needed is a "minimum viable product" that thrills 600 people. Not only does this lead to a product "designed by a committee", it also leads to delays, since any changes affecting 6 to 600 million users rightfully have to be scrutinized, approved by a hierarchy, load tested, QA tested etc, etc. - Y!'s biggest strength (600mn users) is its biggest challenge to innovate.
In contrast, even though over a billion users come to Google everyday, Google doesn't own its billion users the way Yahoo does. Google does not have any media property on which it can promote its innovations. Google's prime service is a merit based search platform, where Darwins "survival of the fittest" prevails. So Google Product Managers don't have immediate access to 6 million users the way Yahoo does through its home page. So they have to do with innovation the way most startups do - release it to a small group, write a blog post, get Technology blogs to write about them and hope that the products brilliance will trigger word of mouth. Because of the absence of these 600 million users, Google's innovators don't have to go through long approvals, design processes, infrastructure requirements . Case in point - Paul Buchheit added the "by invitation only" feature to gmail, because he couldn't get enough hardware resources initially to scale gmail. - Innovate like startups do (with 600 users)
I don't know about you, but I always find out about Google's new services (maps, news, Buzz, blog reader etc) from friends or Google's blog or popular technology blogs. In contrast, I almost always find out about Yahoo's new services either on their home page or on one of the many other Yahoo pages. What does that tell you - thats word of mouth marketing versus running a superbowl ad (Google's 2010 superbowl ad is an exception). Think of all the websites you cant live without and think if you ever saw a mass market ad for those websites. Its like the hammer and the nail analogy - when you have a hammer, every problem looks like a nail. Yahoo's hammer is its 600 million users. Yahoo's nails are the products it launches. You don't need a 600 million user hammer to launch a killer product. What Yahoo needs is a screwdriver with 600 early users. Yahoo doesn't need sharp nails as products, what Yahoo needs are screws - blunt around the edges - that will fit in after a little twisting and turning - but once fastened will hold on better than a nail.
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