When Steve Jobs returned to a half-bankrupt Apple Michael Dell advised him to return the money to the shareholders and let Apple go to its fate. Then the opposite happened and it was Dell who returned the money. It's the same advice Lex's Financial Times columnist gave Marissa Meyer after Yahoo! presented the quarterly results.
Thankfully, Yahoo! she's as full of cash as a piggy bank on Christmas Eve, but all her typical businesses stagnate if they don't retreat. These businesses are going badly, they tell Yahoo!, because there's old technology, outdated technology. Not a problem at all! Far from reviving the corporate culture and rejuvenating a prestigious brand by finding a new positioning for the younger and more active mobile audience! A task that Marissa Meyer had taken on with the energy that a young technologist coming from that machine of ideas that is Google can be capable of.
The forty or so acquisitions made by Mayer in two years have failed to revive the fortunes of Yahoo! It is still early to draw conclusions, but the perception is that we are still stuck at the starting point. Shareholders are getting really nervous. Some are calling to split the huge capital gain from the stake in Alibaba (of which Yahoo! is a shareholder) and then go about a merger with AOL. A prospect that terrifies Tim Armstrong, the CEO of AOL, more than the executives of Yahoo! On closer inspection, it doesn't seem like a great idea since AOL has the same disease as Yahoo!
Why is it so difficult to get Yahoo! back on track? Simply because she's aged, and rejuvenating an old man is alchemist's work. Few have succeeded in the technological behavior: Apple and IBM have made it, Motorola and RIM have not, there is a question mark on HP. Here we go: old technology. Yes, because if technology isn't everything, it's almost everything. If you have that, you have 70%, but if you're a nerd, however, this competitive advantage can quickly fade. Marissa Meyer is certainly not a nerd and her strategy towards Yahoo! and its emboldened shareholders is a very balanced calculation. Part of Alibaba's loot will go to the latter to quench their appetite. Part will go to a new round of investments in video, mobile and management technology.
A strategy that has appeared clear since the first post-Alibaba acquisition: BrightRoll a programmatic video advertising platform, the online advertising sector destined to grow the most. eMarketer estimates that in 2016, 40% of online video ad spend will be programmatic adv. Today it is worth just 10%. 80 out of 100 big spenders in video adv use BrightRoll's platform.
The acquisition of BrightRoll has raised many eyebrows among observers, especially for the figure that Yahoo! paid to incorporate it The FT wrote that "chasing the latest trend in advertising is an expensive hobby." Then he let himself go with a lunge typical of Lex's dry and direct style. The gist is this: if the technology is really old, isn't it time for Yahoo! to retire? There's nothing rash about this statement: retirement time is upon us all and Yahoo! is truly the doyen of the web today.
