Yahoo’s Acquisition Strategy
Is there a method to the madness that is Yahoo’s acquisition strategy? Does Yahoo eventually plan on integrating its entire portfolio of web 2.0 acquisitions? Or is it satisfied holding this web 2.0 mutual fund?
When I think of Yahoo’s acquisition strategy, two names come to mind. They are the epitome of web 2.0 - simple, clean, and useful. They are the tagging kings, otherwise known as Flickr and del.icio.us.
Both trace their roots back to the origin of the Internet. By that, I mean they harness the ’semantic web’ - a vision of links and text. So what am I getting at? I don’t know. Something to do with words, links, and algorithms that does something cool and useful. Maybe call it Yahoo Neat-O.
I’m not getting paid big bucks to dream up the miracle app or service. On the other hand, those Yahoo execs need to stop drinking the corporate Kool-Aid and pull together on a cohesive strategy.
Check out this jumbled pool of web 2.0 properties:
Do you see a pattern? Cause I sure don’t. And my brain is beginning to hurt…
Or wait… it just hit me. They are creating a blog social network search engine that returns edited karaoke videos and playlists as desktop/embeddable widgets on a calendar grid. Ahhh, it’s all coming together now. It’s all too easy. Behold the master plan.
Anyways… add to that a 40% stake in Chinese B2B giant Alibaba.com and I’m starting to wonder whether the strategy was focused around darts, a corkboard, and a couple of cocktails after work.
However, there may be a saviour for the company. One acquisition dwarfs all others in terms of importance and potential. Nope, I’m not talking about GeoCities. I’m referring to Overture, the creator of pay-per-click. This auction-based system lies at the fore-front of Internet advertising as we know it. Google stole the idea from Overture and hasn’t looked back since. What Yahoo needs to do is not only leverage their own properties, but encourage users to create their own. What am I proposing?
I think a good acquisition target for Yahoo is SixApart. This blogging conglomerate owns Typepad (blogging platform for professionals), Movable Type (business blogging platform), LiveJournal (community of independent bloggers), and Vox (personal blogging). Why not kill 4 birds with one stone?
This would give Yahoo access to a wide variety of blogging platforms, publishing tools, and most importantly a blog community. This key area cannot be overlooked. Yahoo lags at a time when blogs are really starting to flourish and become mainstream. Failing to adapt and harness this trend will be to the detriment of the company. The space is growing exponentially and Google already has the upperhand with Blogger.
I think it’s a much more strategic decision that not only bodes well for future growth, but also revenue potential.
As for the rest of the acquisitions and the integration strategy going forward, I say screw it. Integration not only confuses the user (in many cases), but also creates a community backlash. Let them live as separate entities. This is vital for long-term success. Long live the web 2.0 mutual fund.
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