Yahoo (YHOO)…the next AOL(AOL)?

By: ispeculatornew
Date posted: 02.05.2010 (5:00 am) | Write a Comment  (5 Comments)

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When I think about Yahoo, what comes to mind is a group of different segments that used to dominant in their fields but never were upgraded enough to remain at the top of their fields. Yahoo dating used to be a leader in the field. Of course now, other players such as IAC Interactive have websites that have a lot more traffic and revenues.

Then, think of Yahoo Finance, which used to be the ultimate financial resource. It was a great property to generate advertising revenues and seemed far ahead of any competitors. But look at the website from a few years ago and you will hardly notice any improvements in today’s version. It is not much of a surprise to see that others such as Google and Marketwatch are stealing market share constantly.

Yahoo mail is another good example of a service that once was a leader with Microsoft’s Hotmail but has since been made to be the inferior product mainly by Google’s Gmail service.

What Yahoo used to be….

Yahoo was once a terrific web portal, a leader in all kinds of sectors on the internet. But then time went by and they did not adapt quickly enough. Now think of AOL. A decade ago, AOL was riding high as the leading internet service provider which helped generate traffic throughout its network. But after being merged in Time Warner, the company’s decline started and it never successfully moved on when it started losing those subscribers.

Now that AOL has became an independent company again, it has been busy selling off dead services and properties. Remember ICQ, the messenging service that was used by nearly the entire web? It had been bought by AOL to merge with its own messenger service to become a dominant force. Of course, who uses ICQ nowadays? But it is part of the pieces now being sold off by AOL.

Same for Yahoo?

Well Yahoo is still early on that path but it is going full speed trying to “catch up” on AOL. One of the early moves came yesterday when Yahoo confirmed it was selling “Hotjobs”, a once leading emplyment service to, for 225$ millions. A few years ago, the value of HotJobs was much higher. But as the quality of the website did not improve to match competition, it lost users and revenues.

Yahoo does still have a few valuable properties, especially in its Asian operations, but also in Flickr, its social image network. But I would say the trend is still very clear, Yahoo is going down and is only a few years away from AOL, trying to get funding to somehow get momentum through fresh and popular content that would generate enough revenues to offset the other declining parts of the company.

What are your thoughts on Yahoo? I know I have been criticised for being negative on Yahoo but honestly I just don’t see how Yahoo can avoid becoming the next AOL.

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  1. Comment by Zavi — February 5, 2010 @ 8:46 am

    Nahhh I think you are exaggerating by comparing Yahoo to AOL! Like you said after the merger with Time Warner, the image of AOL had changed drastically… with number of consumer complaints and lawsuits over claims.

    I can’t say it’s a sell for Yahoo. I still remain in the opinion that Yahoo is a good pick (maybe a hold then!). The company need to stay innovative and become more profitable.

    hehe I was on ICQ for quite a while. I like the “Ohh Ohh” sound effect!

  2. Comment by IS — February 11, 2010 @ 9:31 am

    @Zavi – I can see how this might look extreme but I don’t consider Yahoo to have many “solid products” right now apart from Yahoo Japan and Flickr. There are a few ok players but most of them are not improving as fast as the competition… a brand will only get you so far! And yes, I remember that sound oh too well!

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