A Renewed Digital Flair for Yahoo’s Lackluster Online Media
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It somehow misses the point to speculate whether Yahoo (NASDAQ: YHOO) will scale back from its stagnant online media operations and shift into more of a Web-technology company now with Marissa Mayer, a computer programmer by training, at the helm. Such a move in strategy would seem obvious and might even sound logical. And granted, internet companies like Google (NASDAQ: GOOG) should expect some toe-to-toe competition from a future Yahoo under Ms. Mayer. But Yahoo doesn’t need to become a Web-technology company like Google to get back on a growth path. Coming in as a former Google executive and having overseen many Google product developments, the new Yahoo CEO may have just been presented with a fitting opportunity to apply her coding expertise to fine tune Yahoo’s sprawling online media offerings. A better pairing of Web technology with online content helps deliver a better digital experience for content users.
It’s said that Ms. Mayer has a love for fashion and enjoys reading fashion magazines. To start, Yahoo could really use both her professional skills and personal interest to make its Style/Fashion section on Shine, one of the many Yahoo sites, a more interactive content offering. That would be a symbolic move as to where she might take the company--the most cutting-edge Web technology for the best online content delivery. An often self-cited motto of Marissa Mayer highlights her unusual work focus on user experience, a practice well regarded at Google. There’s no reason why she won’t bring the same guiding principle to what she’ll do at Yahoo. Online content companies are also about user experience. A more unique user interface for Yahoo’s online content helps improve user experience, and having more satisfied users attracts more advertisers and ultimately better rewards Yahoo investors.
The questions then is what kind of vision Yahoo has in order to meet its long-sought turnaround. I would argue that the challenge for Yahoo is how it can better serve its content users through Yahoo-defined experiences, rather than rolling out stand-alone tech offerings with Google-resembled products. Remember that Yahoo started as a Web portal. The term Web portal may sound distant today as no single information hub can ever alone host the vast amount of information on the Web, and users now go directly to their individual Web destinations. But back in the late 1990s, Web portals were a popular Internet commodity and mostly the starting point of Web information browsing. Part of that early Web development, Yahoo has always been about information and content offerings first and foremost and uses Web technologies only as a means of better digitalizing its content. While many of its old peers have gone out of business, Yahoo has managed to stay in the operations. Some of its sites today are among the most popular on the Web, including Yahoo Finance and Yahoo Sports.
Looking at Yahoo’s Company Overview from its online corporate information page, one can get a clear sense of what Yahoo aspires to be in the digital world, which is to create a content platform and provide users with “deeply personal digital experiences.” Many would agree that such a business vision is still relevant today. The problem with Yahoo’s lackluster business performance in recent years is in its weak execution that hasn’t really impressed users. When it comes to providing digital content, it’s no longer about the quality of the content per se; it’s also about users’ digital experience of consuming the content. And I believe this is where Marissa Mayer’s past Google product involvements can come in handy. As an investor, I would bet on the new Yahoo CEO’s ability to formulate a strategy that would help improve the company’s current content delivery by designing and applying better Web technologies to make everything from Yahoo more interactive and personalized for its users.
Speaking of formulating strategies for online content companies, Yahoo can also learn something from past strategic pursuits by America Online (NYSE: AOL), its direct competitor in the online media market. AOL has repeatedly shown an over interest in content acquisitions, noticeably the failed merger with the old media content company Time Warner and the most recent acquisition of The Huffington Post, an online news content outlet. In both cases, AOL gave little regard to obtaining digital tech know-how critical to online content delivery, and this is definitely what Yahoo should avoid in its future expansion.
I've heard of this notion how one could, in the future, read news in a digital gaming setting, which I understood to mean that one could play with an array of background information data under different scenarios to better appreciate a news piece. It sounds like a novel digital experience for consuming online content, doesn‘t it? I’m not sure if that might be something Yahoo would be able to pursue now under Ms. Mayer’s leadership. But I'd like to think that Yahoo has the technological potential to perfect its online content delivery. Anyone who uses or knows about IntoNow, a digital tool from Yahoo, may just have the same confidence I do (IntoNow complements one’s TV watching experience by means of the app automatically generating a show’s background information for real-time access on a companion iPad).
With Marissa Mayer, a veteran digital product developer, now leading Yahoo’s way, their vision may have just shined brighter on the horizon. Building content offerings with a focus on providing uniquely digital experiences, Yahoo may finally deliver as a media company.
JJtheArdent has no positions in the stocks mentioned above. The Motley Fool owns shares of Google. Motley Fool newsletter services recommend Google and Yahoo!. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.