Last week the internet exploded as the news of the new appointment of Marissa Mayer as the new CEO of Yahoo sparked.
Most of the discussion was centered around the speculation of why Marissa left Google - clearly the market leader in the search and advertising business compared with Yahoo! a company in deep trouble for a while, who seems to have lost its way and changed three previous CEOs in the past few years.
I was surprised though to see how little was said on what Marissa's plans are to save Yahoo!
In this post, I wanted to try and explore this, as well as add my my own personal thoughts about what Marissa could do to regain a leading position in the market.
What Yahoo! shouldn't be doing
Until now, the strategy at Yahoo! has centered around advertising, which was based on its core search engine, homepage and email.
Obviously, this strategy ought to come to its end, as both of these products are growing increasingly stale.
In addition to this, it would be almost impossible for Yahoo! to regain any kind of leadership position in that space as Jason Del Rey and Michael Learmonth argue in their article Predicting The Strange Future Relationship of Yahoo!, Google, and Facebook:
Perhaps, a hint of Marissa future plans - build products instead of chasing search
Clearly Marissa didn't join Yahoo! to continue her predecesor's strategy i.e. focus on content. So the question is, what could be the next viable option that Marissa should pursue. A hint in that regard is given in the Jason Del and Michael Learmoth article:
Ms. Mayer represented what Yahoo could become, a company that builds products instead of chasing search -- as it did for nearly a decade -- and social, which is now sapping the company of its once-formidable engagement with users.
The real question is what could that mean?
The elephant in the room
Most people are not aware of the fact that the main company behind the Hadoop project is Yahoo!.
In fact, Yahoo! is probably the largest deployment of Hadoop, and still the major contributor to the project.
Yahoo runs Hadoop on 42,000 servers--that's 1,200 racks--in four data centers. Its largest Hadoop cluster is 4,000 nodes, but that will increase to 10,000 with the release of Apache Hadoop 2.0, expected...
Yahoo uses Hadoop for its own internal analysis of information captured from user interactions. It stores 140 petabytes in Hadoop. Since Hadoop keeps all data sets in triplicate, over 400 petabytes of storage are needed to sustain its systems.
Having said that, Yahoo! has done a fairly bad job on monetizing the project, and has let other companies such as Cloudera, Amazon, IBM, EMC to build services and solution around the project.
Now here's the real elephant in the room: During a recent interview with InformationWeek Scott Burke, senior VP of advertising and data platforms provided a very interesting insight on some of the assets that Yahoo developed around Hadoop:
- Yahoo! can advise advertisers on the demographic that responds best to their campaigns so that they can adjust their ads as necessary to appeal to the widest audience. According to Burke, this can lead to improved results, sometimes even doubling expected response rates.
- Yahoo's data indicates not only who is viewing advertising, but also how much time they're spending on it, what their click-through rate is, and what they do on the Yahoo site after viewing an ad. This is all valuable feedback to advertisers, as it lets advertisers make decisions early in an ad campaign, and helps them plan their future advertising strategies.
- Yahoo has also developed a set of open source code called Cocktails, which gives advertisers the tools to extract information in Yahoo's Hadoop systems. Cocktails are written in JavaScript so they can run in browser windows; Manhattan is a server-side cocktail and Mojito is client-side.
What Yahoo should become? - The Web Analytics Company
Marissa already indicated its intent to move from the search business and into products but the real question is what that means.
This is where I wanted to add my own personal thoughts.
Yahoo! - The new Web Analytics company
IMO Yahoo should build on its strong Hadoop assets and become the leading Web Analytics Company.
What do I mean by that?
I mean that instead of providing content directly, it will give other companies services to manage and analyse their content using the tools and an experience gained within Yahoo.
Yahoo should also use this position as its ticket into the new cloud world, leveraging its existing data center operation and assets that it developed over the years in managing large scale data services.
Here are few concrete examples:
- Hadoop as a Service - similar to Amazon Elastic Map Reduce (EMR) but significantly simpler and richer with built-in analytics and reporting tools.
- Analytics PaaS - similar to GAE but focused in the area of Analytics where it would give users the ability to build apps that specialize in data analytics, rather than serving web apps or mobile apps.
Become the Market Place for Web Analytics
There are many services that collect data over the web including social media, and try to extract their own insights out of it.
By collecting this data and organizing it for other companies - Yahoo could give its users an easier path to building useful insights (rather than starting with collecting data). This would then provide a simpler way to build their own insights on-top of that data, rather than building it from scratch. It could also become the marketplace for such insights, where they would offer other analytics companies tools to provide specialized insights for companies consuming this data.
Win the developers mindshare
The web and social world is driven by developers - Yahoo can and needs to win the heart and mind of the developer community.
This is specifically true as Google and Facebook are starting to lose some of that mindshare. Given that it already has good assets in the open source community, such as the Hadoop project, Yahoo can leverage this to create even more traction within this community. With the right focus, this shouldn't be too difficult.
Anyway these were my own personal thoughts on this interesting excerise.
Good luck Marissa!
References
- 3 Challenges Yahoo’s new CEO Marissa Mayer shares with IT managers
- The real reason Marissa Mayer left Google: She had to
- Google's Marissa Mayer: 3 Leadership Traits She'll Bring to Yahoo
- Predicting The Strange Future Relationship of Yahoo!, Google, and Facebook
- Yahoo Has Seen Its Future; In One Word, It's Products
- How Yahoo Spawned Hadoop, the Future of Big Data
- Yahoo And Hadoop: In It For The Long Term
