I loved this article found in the Wall Street Journal called As Yahoo Falters, Executive Memo Calls for Overhaul. It references a 4 page memo called The Peanut Butter Manifesto written by Yahoo executive Brad Garlinghouse with what he thinks is wrong in the company and suggestions to fix it. What I like about it is that Mr. Garlinghouse had the guts to write the memo in the first place and according to the earlier referenced article, COO Dan Rosenzweig (a huge Springsteen fan) is starting to listen and investigate changes.
There are so many people these days who like to point out what Yahoo is or isn't doing and of course most of it is compared with Google. For example, some analysts think that Yahoo should buy Facebook for like a billion dollars. Me, I thought they should pass and I still do.
Unlike these analysts, Garlinghouse has an insider's view and as someone who has bought millions of dollars (not just search marketing) on Yahoo since 1999, I have to agree with most of what he wrote. I'll go over the exceptions in a second, but here's a summary of the memo and my observations:
PROBLEMS CITED IN MEMO
- Lacks focus and vision for the company - I can't really know for sure because I'm not on the inside, but unlike Google who is about 95% focused on monetizing search marketing revenues, Yahoo does seem to be spread thinly. Are they into content or aggregation? How about search versus display ads? How about youth versus adults?
- Lack clarity of ownership and accountability - When I spend enough money, especially as a financial marketer, I have a single point of contact and a great sales team behind them. That team is very accountable for my business and if I had a problem with say Overture/Search, they took ownership and solved my problem. So, I haven't experienced this problem as a big spender.....
- Lack decisiveness and then he listed out products that compete - This part I agree with. Seriously, what is the difference between Yahoo Photos and Flickr or myweb versus Del.icio.us? I'd like to know. The current one I'm struggling with is social media versus 360 (blogs) versus Groups (message boards).
I won't go into detail on what Brad's solutions are because they speak for themselves. However, a few of my own personal observations as an active Yahoo buyer over the years would be:
- The biggest advantages I've seen that Yahoo has are: web surfing and customer information to be used for modeling and content aggregation to keep people longer on the site. It is time that the behavioral modeling takes more of a forefront because it is unmatched in the industry.
- The Finance team works extremely hard and looks to be understaffed not overstaffed. The 15%-20% reduction would be very painful to absorb in that area and would probably impact bottom line results. Trust me when I say that once you go down the layoff path you sell your corporate soul to the wall street devil.
- However, getting rid of spare parts and overlapping products would be a good idea and streamline the business at the same time. Layoffs couched in selling off a business unit are not the same as cutting a % of your workforce when it comes to morale.
- Become offline content's best friend in the online world using the 60 minutes partnership as the example. Yahoo can take on Google/YouTube without the same headache.
The Peanut Butter Manifesto looks like it lays out a plan for or at least starting a conversation for what is wrong at Yahoo these days. I'm glad to see that someone had the stomach to write it and then someone had the guts to read and examine it for valid suggestions. More companies should look at how thin they spread themselves and instead focus on their core business.
Back at the old AT&T, a co-worker named Matt B. once told me "Eric, never leave the core business. Never", when he saw how AT&T Computers was closed after AT&T purchased NCR. The message from the Peanut Butter Manifesto is to stay focused on your core objectives. Because, once you start spreading peanut butter too thinly, you forget why you started to make your sandwich and all you care about is covering as much of the bread as possible and of course washing it down with New Coke....