Tag: yahoo!

  • Was telecommuting another broken technology promise?

    Was telecommuting another broken technology promise?

    Telecommuting promised, or still promises, to free caged office workers from their cubicles, relieve the sardine-tin conditions on our peak hour trains and reduce traffic congestion on clogged roads. But has that promise been lost like so many other predictions of the technology age?

    Banning remote workers is the latest edict from Marissa Meyer as she continues her daunting task of turning around Yahoo!.

    Meyer’s move follows Google’s Chief Financial Officer Patrick Pichette claiming telecommuting is counterproductive and discouraged at his company.

    One of the great promises of the computer age – almost up there with the paperless office – is the ability to work from home as if you were sitting in an office.

    So promising is telecommuting it’s one of the main selling points for Australia’s National Broadband Network.

    Having two of Silicon Valley’s biggest companies come out against remote working, particularly Google with its reputation for innovation and creativity, seems to damn the practice.

    This isn’t helped by Australia’s nanny state deciding that companies are liable for remote workers who manage to fall over in their own home – twice.

    Risk is the real barrier to adopting telecommuting, the risk of a compensation claim for a remote working employee falling over while rummaging in their kitchen fridge is one aspect but a more a bigger risk in the mind of a bureaucrat is that a subordinate is not under their control.

    Control is almost certainly what focuses Pichette’s mind. While Google is portrayed as a company full of original thinking, non-conformist geeks in reality only half the staff, at best, fit the stereotype while the rest are the same corporate bureaucrats you’ll find at an insurance company or a quantity surveyor’s office.

    In the case of Yahoo! a decade of mismanagement has left the company unsure of who exactly works for them, Meyer’s solution is to order everyone into the office so she can count heads.

    The fact that some Yahoo! staff will quit, others won’t be able to get to an office and some will turn out to have been long dead (with relatives gleefully cashing Yahoo!’s cheques) is a bonus for Meyer as she looks at reducing staff costs.

    In reality remote working is growing, partly because so much of the white collar workforce has been contracted out and few freelancers are interested in hanging around clients’ offices if they can avoid it.

    A bigger factor is that workplaces themselves are changing as fewer organisations need to have huge office blocks. While the cubicles themselves might not go away, they are going to be clustered where the customers and workforces are rather than locked away in modern ivory towers.

    That has some major consequences for our workforces and cities which the bureaucrats – both in the private and public sectors – have barely started to get their heads around.

    Photo of commuters at Liverpool Street Station courtesy of Genkaku aka James Farmer through SXC.hu

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  • Can Yahoo! disrupt the disruptors?

    Can Yahoo! disrupt the disruptors?

    Yahoo! CEO Marissa Mayer packed out the room for her interview at the World Economic Forum this week where she spoke about some of the challenges her and the company face.

    One of the areas she sees for Yahoo! is in collaborating with other tech industry giants.

    Mayer also is making a point of collaborating with companies such as Apple Inc., Google and Facebook, instead of competing.

    “It ultimately means there’s really an opportunity for strong partnerships,” she said.

    The problem for Yahoo! is that it doesn’t have a lot to offer companies like Apple, Google or Facebook – they are steaming along on their own and have moved ahead of the areas which Yahoo! dominated a decade ago.

    Generally in the tech industry partnerships are more the result of the sector’s also-ran coming together in the hope that their combined might will overcome the leader’s advantages.

    It’s the same philosophy that thinks tying the third and fourth placed runners legs together will make them faster than the winner.

    A good example of this is Microsoft’s tie up with Nokia over the Windows Phone. If anything, the net effect has put Windows Phone and Nokia even further behind Apple and Google in the handset market.

    Even when two tech companies have united to exploit their individual strengths, the results usually end in tears. Probably the best example of this was the IBM and Microsoft joint venture to develop the OS/2 operating system which eventually sank under IBM’s bureaucrat incompetence and Microsoft’s disingenuous management.

    Those two examples show how partnerships only work when each party has something valuable to contribute and all sides are committed to the venture.

    Marissa Mayer’s task is to find Yahoo!’s strengths and build on them, then she’ll be in a position to enter partnerships on an equal basis.

    Whether its worth entering into partnerships with the big players though is another question. It may well be that Yahoo! has more to offer smaller businesses and disruptive startups.

    Entering into a desperate alliance with Apple or Facebook could possibly be the worst thing Yahoo! could do, the company is no longer a leader and now needs to be a challenger or a disruptor.

    Facebook’s locking competitors out of data feeds is an example of how complacent the big four internet giants are becoming, Yahoo! are in the position to upset that comfortable club.

    The value of partnerships is that we all have weaknesses and strengths, a properly thought out venture builds on the various parties’ strengths and covers their weak spots. Right now Yahoo! has more weaknesses than strengths.

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  • Has Yahoo got its mojo back?

    Has Yahoo got its mojo back?

    One of the disappointments with Yahoo in recent years has been management’s inablity to effectively use the impressive portfolio of online assets that they’ve built up over the last 15 years. Could this be about to change as Marissa Mayer finds her feet as CEO at Yahoo?

    A first step may be Yahoo’s free offer of Pro accounts on their Flickr photo sharing service which is coupled with a new iPhone app and a marketing drive.

    Their timing is exquisite as Instagram, the file sharing service of the moment, struggles with privacy concerns. Flickr offers far better control over photographers’ rights than Instagram or most other social media services.

    While the Flikr offer won’t reverse Yahoo’s long term decline on itself, it could be the start on a long journey of re-establishing the company’s credibility as one of the leading web companies.

    2013 promises to be a turbulent year for the big four online empires as Apple adapts to life without Steve Jobs, Amazon fights on a number of fronts, Facebook tries to justify its massive market valuation and Google digests Motorola while dealing with declining internet advertising rates.

    If Mayer and her management team can get a coherent strategy that realises the strengths of Yahoo’s product portfolio, then the company might be in a position to challenge the Internet’s big four.

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  • Bubble economics

    Bubble economics

    You know you’re in an investment bubble when the pundits declare “we’re not in a bubble”.

    A good example of this is Andy Baio’s defence of Facebook’s billion dollar purchase of Instagram.

    Justifying the price, Andy compares the Facebook purchase with a number of notorious Silicon Valley buyouts using two metrics; cost per employee and cost per user.

    Which proves the old saw of “lies, damn lies and statistics”.

    The use of esoteric and barely relevant statistics is one of the characteristics of a bubble; all of a sudden the old metrics don’t apply and, because of the never ending blue sky ahead, valuations can only go up.

    Andy’s statistics are good example of this and ignore the three things that really matter when a business is bought.

    Current earnings

    The simplest test of a business’ viability is how much money is it making? For the vast majority of businesses bought and sold in the world economy, this is the measure.

    Whether you’re buying a local newsagency outright or shares in a multinational manufacturer, this is the simplest and most effective measure of a sensible investment.

    Future earnings

    More complex, but more important, are the prospects of future earnings. That local newsagency or multinational manufacturer might look like a good investment on today’s figures, but it may be in a declining market.

    Similarly a business incurring losses at the moment may be profitable under better management. This was the basis of the buyout boom of the 1980s and much of the 1990s.

    Most profitable of all is buying into a high growth business, if you can find the next Google or Apple you can retire to the coast. The hope of finding these is what drives much of the current venture capital gold rush.

    Strategic reasons

    For corporations, there may be good strategic reasons for buying out a business that on paper doesn’t appear to be a good investment.

    There’s a whole host of reasons why an organisation would do that, one variation of the Silicon Valley business model is to buy in talented developers who are running their own startups. Google and Facebook have made many acquisitions of small software development companies for that reason.

    Fear Of Missing Out

    In the Silicon Valley model, the biggest strategic reason for paying over the odds for a business is FOMO – Fear Of Missing Out.

    To be fair to the valley, this is true in any bubble – whether it’s for Dutch tulips in the 17th Century or Florida property in the 20th. If you don’t buy now, you’ll miss out on big profits.

    When we look at Andy Baio’s charts in Wired, this is what leaps out. Most of the purchases were driven by managements’ fear they were going to miss The Next Big Thing.

    The most notorious of all in Andy’s chart is News Corp’s 580 million dollar purchase of MySpace, although there were good strategic reasons for the transaction which Rupert Murdoch’s management team were unable to realise.

    eBay’s $2.6 billion acquisition of Skype is probably the best example of Fear Of Missing Out, particularly given they sold it back to the original founders who promptly flicked it to Microsoft. eBay redeems itself though with the strategic purchase of PayPal.

    Probably the worst track record goes to Yahoo! who have six of the thirty purchases listed on Andy’s list and not one of them has delivered for Yahoo!’s long suffering shareholders.

    The term “greater fools” probably doesn’t come close to describe Yahoo!’s management over the last decade or so.

    While Andy Baio’s article seeks to disprove the idea of a Silicon Valley bubble, what he shows is the bubble is alive, big and growing.

    One of the exciting things about bubbles is they have a habit of growing bigger than most rational outsiders expect before they burst spectacularly.

    We live in exciting times.

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  • The dying Yelp of Sensis

    The dying Yelp of Sensis

    This story originally appeared on Technology Spectator

    Fifteen years ago Sensis, the directories arm of Telstra, was untouchable. A listing in the Yellow and White Pages was essential for every business and Sensis’ monopoly was a true river of gold.

    Sensis’ launch this week of an Australian partnership with the US based review site Yelp is Telstra’s desperate throw of the dice to survive in a market where its directories business has become irrelevant.

    Attempts to stay relevent

    There have been many attempts by Sensis to overcome this erosion of its core maket including purchasing an IT services business and unsuccessful forays into publishing and online search with Trading Post and CitySearch.

    Probably Sensis’ lowest point was the squandered millions of dollars and years of management time wasted in trying to compete against Google after Telstra CEO Sol Trujilo made the sneering comment of “Google Schmoogle”.

    Declining values

    At the time of Trujillo’s comment in 2005 Sensis was valued at $10 billion as a stand alone company. After last week’s disappointing results that saw revenue drop 18 per cent for the year, the value of the division is an optimistic $5 billion.

    Yelp itself is unlikely to help Sensis’ revenue woes. Despite filing for a $100 billion public offering, Yelp has never made a profit in its seven years of operation. Although licensing their service to failing directory companies around the world might prove to be a handy revenue stream.

    That lack of profit – on North American revenues that are tiny compared to Sensis’ Australian cashflow ­– shows the fallacy in the social media business model that many of the popular online services are faced with.

    Users of social media services like Yelp are looking for a community of trustworthy and relevant referrals. The directory sale model is based on displaying the biggest advertisers prominently, which is exactly what social media users don’t want.

    Yelp also comes into a marketplace already crowded with competing, established services like Word Of Mouth Online, Eatability, and the faster moving social media platforms like Foursquare.

    Competitors’ Missed Opportunities

    In many ways Sensis has been lucky in that most of the competition has been from smaller upstarts while their bigger competitors haven’t capitalised on the market opportunities.

    Google Places, the biggest competitor to the world’s Yellow Pages directories, is mired in bureaucracy and isn’t doing a good job in telling business its story while Facebook’s local search function isn’t getting much traction either.

    Of the local Australian incumbents, ninemsn isn’t interested in local business with its international partner Microsoft not offering an Australian product and the local team preferring to deal with big spending advertising agencies, while Fairfax squandered its early advantage and eventually sold the CitySearch service to Sensis.

    News Limited’s True Local is having limited success while it struggles with the transition from print to online. At News’ recent launch of its new digital platform, the company’s executives stated they expected journalists to develop a “digital mind”.

    Lacking a Digital Mindset

    That “digital mindset” is the key to the problem at companies like News Limited, Fairfax and Sensis. In a marketplace where customers, advertising and readers have moved online it requires management, not just the lower workers, to “think digital”.

    Sensis’ key problem is its management structures – and more importantly its sales teams’ commissions and KPIs – which are still based around its traditional business models that will make selling services like Yelp difficult.

    The phone directory business model is a product of the 1920s and in many ways Telstra and the other Yellow Pages franchisees around the world should be grateful it has lasted so long.

    Whether the phone directories that have been so profitable for phone companies can make it to their one hundredth birthday is an open question. One thing is for sure, bolting on an unprofitable and late to market social media service isn’t the answer.

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