Yahoo's Investment in Academia: The "Used Car" of The Internet Tries to Get Back in The Race

Friday's Wall Street Journal featured an article about how Yahoo is trying desperately to catch up to its more focused rivals by hiring a slew of outside academics, most notably economists. Terry Semel, Yahoo's CEO, apparently hopes loading up the company with economists will let it overcome years of stagnation and lack of focus.

As an example of this, look at the five-year price chart on the left (click on the chart to enlarge it). It displays the prices of Google, Yahoo and the S&P500 for the period.

Well, God knows the company needs something. To me, Yahoo, has always been a sort of "used car" entrant among online information/data site companies. My partner continually asks me why I use that term. I suppose because, somehow, Yahoo always seems to be that "other" online provider that is seen as stumbling forward, without purpose. A type of bland, basic online information "transportation" vehicle.

AOL was a first generation vehicle. Yahoo blasted onto the scene with a dizzying variety of services, but no clear focus. It seems to offer a bit of everything, and the best of nothing.

Then came eBay, Google, and even MSN.

eBay rules auctions, for better or worse. Certainly better than Yahoo.

Google rules search and online advertising. After minting money with these, they have begun to "cover" all of Yahoo's more noteworthy features, such as free email and chat, at the same "free" price point. Game to Google.

MSN has now charged into video ads and ads for MySpace. At least it seems to have an awareness of how badly it stumbled and missed online advertising after it destroyed Netscape and foolishly felt safe in the online world.

While the rest of the online world focused on racing to dominate some identifiable, profitable online product/market, Yahoo seemed to be the used stock car of the internet, tuned-up a little on Saturday to run at the track.

The Friday piece actually cited Yahoo CEO Terry Semel, for whom I actually have a great deal of respect, as,

"confiding a concern to his top lieutenants that the company risked missing long-term developments. Who in the company is considering what might happen in three to five years, he asked, according to one executive at the meeting."

The incredulous, laughable result, was to name Usama Fayyad, Yahoo's "head of data," to head up what passes for the answer to Semel's question.

By the way, Terry, those of us adults who have worked in corporate America for a while refer to that function as "strategic planning," "strategy," "planning and development," or even "corporate strategic planning and development."

It's a little concept GE developed somewhere back in the mid-1950s. Yes, that's right- 50 years ago.