As most people in the online business game realize, once-dominant Yahoo Inc. has struggled in recent years to keep up with the incredibly rapid growth of search engine rival (and fellow Silicon Valley resident) Google.
For a number of reasons, the largest measure of success has gone to Google in recent years. Perhaps its the company's willingness to go in unexpectedly new directions (the simplicity of their home page design); its tendency to innovate in bold ways (Google Earth, etc.); the appeal of its laid back go-getter corporate culture; or simply the sheer superiority of its search engine mechanism. Whatever the cause, It's become a household name and a market force like none other.
Still, sometimes it's easy to forget that Yahoo is technically still the most-visited site on the Internet. Yet it can't shake the stigma of being overpowered by Google. At one point itself considered fresh and cutting edge, Yahoo is now often disparaged for being behind the times in the rapidly evolving world of search engine technology, even as it branches out into new areas like web hosting. The result is plummeting stock value and loss of customers and advertisers to upstarts like Facebook.
In today's Los Angeles Times, Staff Writer Jessica Guynn analyzes Yahoo's current dilemma:
As its growth slows, Yahoo Inc. has taken steps to reorganize its management structure, narrow its focus and jettison some underperforming businesses. But it's still being outmatched in search advertising dollars by Google Inc. and in user growth by social networks such as Facebook Inc., which are rapidly gaining members and advertisers.
Observers expect to see evidence of a widening gap between Google and Yahoo this week, when the two companies report fourth-quarter financial results.
It seems everyone -- former employees, industry analysts, disgruntled investors -- has an opinion about what Yahoo should do: lay off 20% of its workforce, get out of the search advertising business, even put itself on the auction block.
[Silicon Valley entrepreneur Sramana] Mitra and many others in Silicon Valley are rooting for Yahoo to roar back and again capitalize on its status as the Web's most popular destination, if for no other reason than to keep Google in check. But, she said, she's not optimistic.
"Yahoo has a great opportunity still because it has tremendous traffic and a tremendous brand," said Mitra, who posted her Yahoo analysis on the popular technology blog GigaOM. "But it can't figure out what it wants to be when it grows up."
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