Yahoo’s Missed Opportunity: The Social Web


 

Social media may be big on some levels but is mostly hype also. Twitter is not worth a damn and is pimped as the greatest ever. The hype is so strong an outsider would deem twitter bigger than Facebook. Facebook has been around and is great to keep people close when distance is an issue. A legitimate need has existed there always. Linkedin may or may not work. I have used Linkedin for quite sometime. The very big firms like to have employees on Linkedin and many fools use it as the solution to all business needs. Linkedin has very limited use also if you actually actively try to use it. The majority of people in business who actually count are smart and do not join Linkedin and everyone thinks the opposite is true. You never know until you actually do things and articles such as this one touch things on the surface.

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from HarvardBusiness.org by John Sviokla
As far as I can tell, Yahoo did a lease/sale deal with Microsoft, thereby exiting the growing online search business to focus on the fragmented, super-competitive, online media business. Yahoo CEO Carol Bartz and her advisors said they could not marshal the capital to fight against the billions in R&D that Microsoft and Google were spending and planning to spend on search. Yahoo’s mistake is that they want to fight the last war — traditional search and traditional “portal” control.

What the Yahoo executives missed is that the hottest part of the internet — the social web — takes tiny amounts of capital and is garnering a lion’s share of the incremental growth in attention. Therefore, it can be hugely beneficial to any advertising-driven company — like Yahoo. As my venture capital friends once lamented to me, it took practically no capital to launch Linked-In, Twitter, and even the early days of Facebook.

I find the most interesting way to think about the social web comes from my friend, and Diamond Fellow, David Reed of the MIT Media Lab. He says we now have “the third cloud.” The first cloud was connection to the internet; the second cloud was resources like Yahoo and Google. The third cloud is social connection. Twitter, Linked-In, and Facebook are all examples of services that comprise the social cloud.

We know from the history of technology that social functions always top mechanical ones. Alexander Graham Bell expected his phone to be used to broadcast symphonies; remember, the phone came before the radio. Yet simple “talking” won the day. On cell phones, it’s still talking and text messages that are the bulk of all revenues. With computers, the killer application has always been email — which was vibrant long before spreadsheets. In large part, computing is social computing, and everything else hangs off the social aspect.

So I think it’s a shame that Yahoo decided to sell out at the very time when Google and Microsoft are both vulnerable to a company that can harness the social web to garner even more eyeballs and involvement. How could Yahoo have done it without spending billions? They could have gone back to their roots. Many years ago when I was teaching at Harvard Business School, Tim Brady was a student of mine and he did the early marketing plan for Yahoo as part of our course on “Managing in the Marketspace” — back in the spring of 1994. Tim had been a Stanford roommate of the two Yahoo founders, Filo and Yang. Yahoo was created as the best aggregator of useful content.

Today, there is a need for some high-traffic firm to act as a sophisticated aggregator of social content.One outstanding example of this type of aggregator is a little firm called Xobni. Xobni is a simple add-in to your Microsoft Outlook, which does many things including linking to people’s Linked-In and Facebook profiles — all from within Outlook. This is a new-fangled version of exactly what Yahoo did at the birth of the Web, but this time it’s about social information and it links intimately with the way people already work. I don’t know the statistics, but my bet is that corporate users spend more time with Outlook than with any other application — including Facebook. Even if Yahoo could not do the Xobni deal, it would not take billions to create a competitor.

Every company can benefit from aggregating social information about their target market or their product/service category. For instance, my colleague Chris Curran started the CIO Dashboard, in which he chronicles all the CIOs who use Twitter, and offers his own sage advice on CIO issues. He now has 145 CIOs on the dashboard across 29 industries and has garnered over 1,200 followers in less than a month.

Any company can do this if they are thoughtful about who they want to talk to and the natural, emergent social cloud that already exists. Remember, the social trumps all — so just follow the people.

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