Dear Carol:I am writing to apply for the job of president of Yahoo.
I understand that, in the wake of recent executive departures, Yahoo’s board has begun discussing a new management plan, one in which they will hire a No. 2 to help you restore the company to growth and then eventually take over as CEO.
I respectfully suggest that I am the best candidate for that job.
For starters, by hiring me, you and the board can avoid the anxiety-ridden discussion of whether to “hire from within” or “recruit from the outside.” I bring the best of both worlds: As a host of the phenomenally successful Yahoo Finance show TechTicker, I have been been a flag-waving Yahoo for three years. At the same time, as CEO of the phenomenally successful content startup Business Insider, I also bring an outside perspective.
(And did I mention that, when I was a Wall Street analyst in the 1990s, Yahoo’s stock soared 50X after I recommended it? Yeah, baby! True, I also kept recommending the stock while it subsequently plummeted 90%. But perhaps that can be viewed as evidence of my loyalty.)
In any event, as an internal AND external candidate, I’m like a 2-for-1 special!
And now on to more important matters.
If I may be so bold as to speak frankly, Carol, Yahoo has some serious problems.
For starters, the company has no idea what it is. When asked a few weeks back what Yahoo was, product boss Blake Irving rambled off on a speech that made Alan Greenspan seem succinct and direct. You can’t run a tight ship when no one on board knows what kind of ship it is or where it is going. So the first thing the company needs to do is answer that question.
Here’s what I think Yahoo is, Carol: A content, communications, and commerce company. A content, communications, and commerce company with one of the biggest web sites, most recognisable brands, and most powerful distribution platforms in the world.
Back in the 1990s, we used to call content, communications, and commerce sites like Yahoo “portals.” This was a dumb name, considering that what these sites really were were “hubs,” but plenty of Internet names are dumb. If someone wants to think of a new name for a digital content, communications, and commerce company like Yahoo, I’d be happy to use it. But until then, that’s what Yahoo is: A content, communications, and commerce company–a.k.a., a portal.Once you define what Yahoo is, of course, the strategy for future growth begins to fall into place. So allow me to sketch out my plan…
The most important asset Yahoo has is its front page, which should support all three of its businesses (content, communications, and commerce). The front page is already doing this, to some extent, but it could do it better, especially with respect to communications and commerce. So I would make a few tweaks to the front page.
Yahoo’s second-most important asset, one it has severely under-funded in recent years, is Yahoo Mail. Yahoo Mail used to be the dominant web-mail platform, and, as a result, tens of millions of people visited Yahoo dozens of times per day. In the past decade, however, thanks to various strategic missteps, Yahoo has forgotten the value of Yahoo Mail and allowed Google to leapfrog it. Unlike search, which is a lost cause (blame the 1990s crew and Terry Semel for that), the communications game is not over. To have a chance of maintaining its still impressive position in this business, however, Yahoo needs to attack the opportunity very aggressively, catching up to Google and others and then eventually surpassing them.
Restoring Yahoo Mail, Messenger, et al, to their former glory will require immediately building the best integrated communications suite available–one that integrates contacts, email, voice, instant-messaging, AND external services like Twitter and Facebook. The recent improvements in Mail have helped, but there’s a long way to go–especially now that Google is waking up and making some improvements of its own.
To help give the Yahoo communications mission every chance of success–and to support several other initiatives, as well–one of the first things I would do as president of Yahoo is buy AOL. By combining the Yahoo and AOL mail and instant-messaging user-bases, we will amass added scale, and scale is critical in this business. With added scale, we can spread our technology investments across a wider user base, which in turn will allow us to increase our rate of investment. Given the size of our communications platform, we should soon have one of the most lowest costs-per-user in the industry, even while investing more than any other company. (I’ve described the many other reasons why I would buy AOL immediately in this post here, which I incorporate by reference.)So my first two areas of focus will be the front page, which will serve all of Yahoo’s businesses, and Yahoo Mail, which will drive the communications business. The third will be the content business.
At risk of understating the case, Yahoo has an extraordinary opportunity in the content business. Even in its desiccated state, Yahoo throws off more than $1 billion of cash flow a year, and it has the world’s largest content distribution platform. At the same time, almost every traditional content production business on the planet is getting hammered by the world’s shift to digital. It is beyond disappointing, therefore, that Yahoo has not moved more aggressively to amass control of the global digital content business.
Yes, Yahoo has invested in properties like TechTicker and Yahoo Sports, which have done extraordinarily well considering the tiny amount of investment they have received. But this is a drop in the bucket. Yahoo should be spending billions of dollars a year acquiring and building the best online properties and brands across a wide range of verticals, including Finance, Business, Sports, Games, Celebrity, Entertainment, and others.
For example, Yahoo should already own all or some of major online upstarts like the Huffington Post, Gawker Media, Politico, Business Insider, Sugar, Hulu, et al. And Yahoo, not AOL, should be the one buying companies like TechCrunch.
At the same time, Yahoo should be aggressively hiring the best online talent from decaying traditional media companies like Newsweek, the New York Times, the Wall Street Journal, Sports Illustrated, et al. (Not the tenured folks who feel oppressed and exploited when required to produce more than an article or two a week–the young, hungry folks, the ones who have yet to make names for themselves).
And, yes, Yahoo should use the recently acquired Associated Content to supplement this premium content with a vast amount of low-cost freelance content, thus driving huge search traffic to the site in addition to direct readership. And Twitter and Facebook and other social distribution should be immediately and fully integrated into Yahoo, along with “badging,” self-publishing, and other loyalty systems that make it fun and rewarding to be a member of the Yahoo community.
After a couple of years of investment like this, Yahoo’s content business would be an absolute powerhouse–the envy of every other media company on earth (many of which would be lining up to pay through the nose for distribution). And this content business would be the broadest and most valuable platform for the next generation of display advertising in the world.
So that’s my plan for the “Content” and “Communications” arms of the business–both of which will be amplified by a better-designed front page. My fourth major initiative as president of the company would be “Commerce.”
I have a powerful plan for “Commerce,” one that could drive massive new revenue growth for the company, but here I’m going to be circumspect. As they say, there’s no reason to buy the cow if you’re already getting the milk, so I’ll save the details of my commerce plan for later in the process. Suffice it to say that it’s a bold and powerful plan that could restore Yahoo’s luster (and stock price) to the heady days of yore.
So that’s a sketch of my plan for Yahoo–which, if I do say so myself, is a better plan than any I have heard from anyone at Yahoo. As a long-term fan and shareholder of the company, I think it’s the best way forward, and I can’t wait to get started on it. So as of this moment, I am available immediately.
(I should state upfront, though, that I’m not about to leave my colleagues and investors at Business Insider out in the cold while I dance off for some exciting new gig in Sunnyvale. If this deal is going to work, the way it’s going to have to happen is that you’re going to have to buy Business Insider and then promote me to president of Yahoo. The good news is that I think Business Insider would be an excellent acquisition for Yahoo, one that is directly in keeping with the Content strategy I laid out above. Once we plug Business Insider into Yahoo Finance, our traffic and revenue will explode, and Yahoo Finance’s BI will become the world’s most influential business publication. And buying us won’t set you back much, especially relative to your massive cash hoard.)
So, in conclusion, I am writing to apply for the job of president of Yahoo. I wish you and the board all the best in your search, and, at your convenience, I would be happy to discuss the opportunity in person. I thank you in advance for your consideration.
CEO, Business Insider
Host, Yahoo TechTicker