Off late, the name Yahoo appears synonymous with depression and whatever can go wrong with a company. The top level reshuffling didn’t have the much needed impact and there are rumors (expectations?) about impending job cuts. If I were a Yahoo shareholder, I would be deeply frustrated with what is happening in the company. Right now, atleast to the eyes of the outsiders, Yahoo appears like a deer in front of the headlights. The morale inside the company appears to be very low and the top management appears to be totally clueless about the necessary fix. Can Yahoo come back from its mess? Can it become competitive again? Sramana Mitra made a passionate call to Yahoo to fight back in her guest post at GigaOm. I am going to approach it from a different angle. I feel that Yahoo has the necessary tools it needs to have a bright future but they need to have a better vision and execute it well. Their vision should be consistent with the changing technology landscape and they should realign their strategies to take advantage of their existing verticals. The success of this once internet poster child depends much on how they execute in the coming months.

Yahoo was once a poster child of the internet but now their homepage looks like a web 1.0 era relic. When I log into My Yahoo, the only personalization options available are different news categories, weather, TV Guide, Horoscopes, etc. This is what I got from them even in the Web 1.0 era. The main page of Yahoo.com still looks like what I saw during their hey days in the so called Web 1.0 era and the only difference I see now is the addition of some Ajaxy features. I feel like I am visiting an ancient relic and I don’t even visit these pages anymore. In short, I am running away from Yahoo these days. Having said that, I also want to point out that three of my favorite internet hangout spots are Yahoo properties. I have invested considerable amount of my time and data into these Yahoo properties. These vertical properties of Yahoo, Flickr, Delicious and Upcoming, are the reasons why I still want Yahoo to succeed.

Flickr, Delicious and Upcoming are some of the hot properties of Web 2.0, all three of them owned by Yahoo. Yet, Yahoo is not considered a major player in the Web 2.0 era. Let us analyze why this is the case. Yahoo stopped innovating after their initial success in the previous web 1.0 era. They completely missed the shifting of ground underneath the Silicon Valley and elsewhere in technology sector. All they could show as their innovation in the new era, is the addition of some Ajax features on their main page and their refurbished mail product, which appears “bulky” like a desktop application. Refurbishing a product with some glitter is not innovation, period. In fact, I am so pissed off with their spam filter and lack of features like imap, I have completely stopped using their mail system. Their mail system is frozen in the email of the 80s era (didn’t someone talk about lack of innovation in the email recently?) and it is even more frustrating if you get used to Google’s email system. Google has completely changed the way we do email and all Yahoo can do is to spend valuable human hours in producing a product that could, at best, mimic yesteryear desktop mail clients.

I am not dismissing Yahoo as a non-player in the Web 2.0 space. In fact, they have acquired three of the hottest properties in the Web 2.0 space. Flickr and Delicious are, in fact, leaders in their respective verticals. The number of people visiting flickr has increased by 145% in the last year alone (Compete Stats) and del.icio.us has got a 60% increase in the last year (Compete Stats). I have seen upcoming gain some traction as well. Yahoo Mail is the leader in the webmail space with 250+ Million users. It stands second to Google.com in the US Internet usage market share and the traffic growth for Yahoo.com is still on the positive side (a solid 9.4% in the last year (Compete Stats)). In fact, their performance in the Web 2.0 space is not all that gloomy. Why, then, is their name stirring up so much antipathy among the TechBiz elite? The answer is simple.

Lack of vision and no execution. They just couldn’t capture the imagination of technology and business elite, in spite of having some of the greatest verticals in the Web 2.0 space. This could very much account for the lack of buzz in the TechBiz circles and the much talked about demoralization in their workforce. What did Yahoo miss in the Web 2.0 era and what can they do to position themselves in an advantageous position in the upcoming Web 3.0 (disclaimer: I think this Web n.0 notation is a plain marketing gimmick but I am using it in this article to keep up with the crowd) era?

Web 2.0 brought in social to the web apps. My idea of an ideal social network is a collection of verticals, serving to different niches, controlled by a central dashboard. Yahoo has many verticals (some of them being highly successful in the marketplace) and they could have bought many more verticals in various niches (as Sramana Mitra suggests in her GigaOm post). They could have ripped off the ancient relic called Yahoo.com Main Page and converted it into a dashboard for its users. Instead of reading news and analysis from handpicked sources, Yahoo users could have added different vertical Web 2.0 properties (both Yahoo’s and other’s) in their global dashboard. If 250+ Million Yahoo users had got a dashboard that helped them to connect with their social graph (identified by the email addresses in their addressbook), Myspace and Facebook wouldn’t have gained any traction in the first place, leave alone their current  dominance in the social networking marketplace. Yahoo had a tremendous opportunity to become social dashboard for every one of their 250+ Million users but they just missed it due to lack of leadership and vision. In the hindsight, I think ex-CEO of Yahoo, Terry Semel, played a major role in this miss, by projecting Yahoo as a media company instead of a social-media company.

All is not over for Yahoo yet. They could adopt a two pronged approach to generate the necessary buzz in the TechBiz space and turn Yahoo into an exciting company to work with. Such a turnaround could lead to innovation and, thereby, offer the much needed oxygen to position themselves as innovator in the next web era. On one side, they should try to establish themselves as a player in the enterprise space and, on the other side, they should innovate and capture the imagination of consumers. It is definitely going to take lots of perseverance on the part of Yahoo and its shareholders. In the end, they might be able to get back into the Silicon Valley’s hot internet companies list.

On the enterprise side, they have already made a valuable acquisition in the name of Zimbra. If they manage to acquire a company like Zoho, they could position themselves to compete with Google and Microsoft in the Office 2.0 space. There is no leader in this space yet. Yahoo can definitely compete to get a big market share in this space. Zoho is already a mature company in the Office 2.0 space with a diverse range of products including CRM and Online Communication tools. Zoho has already established themselves as an innovative player and if Yahoo can offer the much needed big company legitimacy, businesses will take a hard look at their offerings.

In fact, Yahoo is better positioned for success on the consumer side than even the enterprise side. They should acquire more verticals in niche areas (like travels, real estate, etc.) and tear down the Yahoo.com ancient homepage and turn it into a social dashboard for all their users. They have already announced that they will support OpenID. If they support other open standards like OAuth, more Microformats (they already support microformats in Upcoming and Yahoo Local), etc., it will help them position themselves to compete hard in the upcoming semantic web era. A global social dashboard with open standards is actually the dream of many tech evangelists and such a dashboard also empowers the users than locking them in to proprietary standards. This dashboard will spur the imagination of TechBiz elites as the web timeline shifts from 2.0 to 3.0. Such a buzz will put back Yahoo in the “hot companies to work” list and, thereby, making Yahoo the epicenter of innovation once again.

Well, I do agree that I am not taking the current business reality into account here. There are many other blog posts (including the one by Sramana Mitra, quoted above) that talks from that angle. The idea behind this post is to start a conversation on how they can put the buzz back into Yahoo and offer an image makeover from a purely technology angle. I also agree that it could be just a wishful thinking than anything concrete, considering a company of Yahoo’s size. But, I am just arguing that Yahoo needs a completely different vision that is in tune with the current buzz in the TechBiz space. Like how Ronald Reagan called upon Gorbachev to tear down the German wall, I think we all should call upon Mr. Yang to tear down the old relic (called Yahoo Main page) and infuse new energy into the great organization.