Welcome to the Ecosystem

Find your place in the Ecosystem.

I know I said I was running away, but I thought I ought to explore a strange phenomenon that seems to be going on around Yahoo! Although I haven’t been around that much, I have been popping in now and again to see what is going on. On each of these visits, I seem to find a 360 friend who is baling out or an email pointing me to some petition blog.

It seems that we are all involved in some evolution. I could have decided to sit down and check if I was to retain my reversible thumbs, see if I was growing some extra appendages or find out if I could imitate the cat by licking my important little places. Instead, I decided I should explore what was going on. (Note 1)

It seems that the 360 community is being stirred up by whispers from the Yahoo ivory towers as Jerry Yang and his merry band of faceless pixies announced Yahoo!’s financial results for Quarter 3 2007.

Given the rumours and the various mails and messages going around, I thought that I should see if this all made any sense. (Note 2)

With any set of corporate results, the raw measure of how good or bad they are is the effect on the share price. On Wednesday morning the share price jumped - but as it says in that CNN article “The results won qualified praise from Wall Street analysts, though most acknowledged that Yahoo still has a lot of work to do to revive its business.”

It seems that as far as the Wall Street analysts are concerned, all is not well inside of Yahoo! (Note 3)

The problem is that Yahoo! has seen the amount of money it is making falling over the last year or so. While other rivals appear to be powering ahead. In particular, Google appears to be going from strength to strength. Two days after the Yahoo! Results, Google announced a massive 46% leap in profits.

When you look at the history of the two companies, you will see that both started off in the Internet search engine business. It is in this area that highlights how Yahoo! has got left behind as in August, Google powered more than half all internet searches.

Yahoo!’s income stems from advertising and from us ‘users’ (Note 4) and from our willingness to pay for their ‘premium’ offerings like the Flickr Pro account. Either way, they require that we keep coming and keep eyeballing the ads and patronising their services.

Now, my flavoursome yeomen, this gives us two very interesting observations.

The first stems from searching my friends list for Wall Street billionaires. Although I didn’t find any of those, I did notice that there is an interesting demographic. Unlike some sites, you would care to mention, Yahoo! 360 appears to attract a large number of older people – with disposable income. There is also a large number of women. In advertising this would be considered a profitable market segment – but also a segment with conservative traits that would not react well to change – especially if they didn’t feel part of the process.

The second is how Yahoo! appears to have forgotten that it is us and our willingness to provide content that generates the hits on their pages. The level of communication between Yahoo! and their clients has been incredibly poor. They have also been slow to react to feedback they receive. While they busily work in the background to develop the ‘new and improved’ Yahoo! product, what is already in place has become neglected and plagued by performance and technical issues.

Whatever the new offering we are promised in 2008 consists of, someone in Yahoo! needs to start engaging with their clients. Already people are beginning to experiment with alternatives and some are moving away already.

Yahoo! takes it’s client base for granted at its peril. There are alternatives out there. We use 360 because it suits our style and that are likeminded people here. When those people will move on, the trickle of leavers will turn into a flood.

On the Yahoo! Q3 2007 Earnings Call, Jerry Yang described the Yahoo! offering as an ecosystem, saying “We determined that to win in this marketplace, we must take advantage of our unique assets to drive value across a broad ecosystem of users, advertisers, publishers and developers.”.

Well, Jerry, listen to your clients. You and your people may consider that we are mere plankton in terms of our contribution to your fortune, but without us plankton, your ecosystem will collapse. Listen to your clients, make us feel that our views are important then perhaps your broad ecosystem will start to thrive

NOTE 1: as you probably guessed, I haven’t discovered any extra appendages or the ability to lick my own important little places. To be honest, if I had, I would probably to busy to contemplate working on this blog. Click to return

NOTE 2: And I will have to keep some of my natural political instincts in check as I do. It would be very easy to go of on tangents about the dealings between Yahoo And China – but I should let you go discover those for yourself. Click to return

NOTE 3: I’ve checked my friends list on 360. As far as I can tell, nobody there is a Wall Street analyst. Somehow, I don’t get the feeling that Gordon Gecko would relax by rattling off a blog entry or uploading a series of photos of his latest financial killing to Flickr. Click to return

NOTE 4: I still detest the term ‘user’ when applied to a person who displays loyalty and devotion by visiting an internet site or brand. The term ‘user’ has a derogatory air, it likens us the customer to a drug addict who visits the site to get a fix and that despite everything will come back again and again unable to break the habit…..

…. Errrm…. Maybe this is a dangerous analogy. Maybe there is a certain amount of habit in the way we use Yahoo! – I just don’t like being reminded of it. Mind you, Yahoo! isn’t the only dealer in town… Click to return