Could’ve Seen Yahoo!’s Fall Coming From A Mile Away

yahoo office
Free falling always feels like absence of gravity until you hit the ground.
Free falling always feels like absence of gravity until you hit the ground.

 Ah Internet! That sweet sweet thing that keeps us all connected. Much of the internet’s wide popularity is because of the early use of email, search engine and messengers. Most other stuff including the social media came as a result of that. Yahoo!, the first internet giant was a pioneer in getting internet into our daily lives. We owe it much of our gratitude for making internet what it is today. This is why it hurts all the more to see the company in shambles.

What is happening to Yahoo! marks an important transition in the history of internet. The new generation of businesses grow faster than any business of the past. Traditional, family owned businesses used to take decades to reach where these modern “startups” get within 5-6 years. We all marvel at the phenomenal rise of tech unicorns and witness them dominate the market in no time. Somewhere between the fanfare, venture capitalism and IPO launches, we overlook the importance of financial tempering. Yahoo! brought in a radical business philosophy that obscured the traditional approach. Suddenly, we started believing that internet was a great way to build a business… easily and quickly. Traditional businesses started reeling under the pressure to expand quickly or began suffering from low self esteem. In the years following 2000, internet based companies sprung up from nowhere. With the new found belief that billion Dollar businesses can be built by turning people into users who can be capitalized with advertisements, internet businesses became data sellers. This has become a talisman today for every online startup that thinks in terms of data.

Yahoo! is stated to be in a situation where its core internet business is valued at almost nothing. If this was true then we can really question the very basis on which internet businesses stand today. What happened to the data? With users gone, data loses its relevance. For years I’ve not signed in to my Yahoo! account. Quite frankly, I don’t care about Yahoo! anymore. The question is whether I will care about Google 10 years from now? Sure, If I have a self driving car in the future that is promised to me. Then again, will I not have a Tesla or a Mercedes? Does Google have core competency in automobiles? Yahoo!’s inability to move to the next segment of profitable business is not unique to itself. With giant business valuations, comes massive appetite for taking risks. Unlike local and traditional businesses that play it carefully, new age tech businesses take innovation as a justification for almost every business miss-step.

Companies like Google, Facebook and Twitter are also not very different from Yahoo! for that matter. With expensive failures such as Google Glass, how long will it take before we see a massive bad investment sinking the ship? Just like the banking crisis of 2007 when we saw the likes of Lehman Brothers and Bear Stearns fall, the present situation with Yahoo! is a reminder of the fact that no one is “too big to fail”. 

Somewhere down the line, rapid growth of a business becomes its own cause for doom. Slow and steady might still be the way to win the race. Just having the capital is not enough for a business. People who work for you are your biggest asset. Tech businesses have turned this fact into a force to conquer. Acquiring talent has become a matter of establishing superiority. Naturally, this makes the professionals highly aware of their economic value and as a consequence makes it necessary for businesses to consider them replaceable at any given time. Its like a vicious circle. Where’s the trust? Contrary to that, family owned business have remarkable employee-employer relationships that often span decades. It is a factor of trust not the greed. Work cultures based on monetary valuation of talent is a slippery slope where betrayal is inevitable despite your organization being a brilliant corporate culture paradise. Sure, small businesses may not get to a stage where they can pull off employer branding gimmicks like offering inexplicably large salary packages to freshers. However, they can give something even better; years of stable employment to local talent. 

The expensive lifestyles that come with working in giant corporations based at ‘high rise’ urban centers increases everyone’s personal demands. Taxes go up, commodities become expensive and people become lonely as their lives start revolving around meeting those demands. Apple and Facebook offering women employees a facility to freeze their eggs is the epitome of corporate interference in private lives. It was sold as a great feminist advancement but then diamond companies taught us that you can’t propose without a rock. The point being that whether you’re a man or a woman working in a giant multi national company, your life’s worth is measured in terms of your financial worth, not your hard work or your loyalty. Sure, you’re good until you’re performing but you’ll be chewed up and spit out one day. Believe me, I’ve seen people getting laid off en-mass going through at least 7 stages of grief.

If all local businesses are replaced by or become dependent on a few monopolistic companies, it will be impossible to maintain sustainability. The talent migration from local communities to urban centers has already contributed a massive wealth gap. Our physical resources are drying up and climate change is affecting life everywhere. Yet, we tend to think that the next smartphone model will change everything, that an awesome app will improve life. We are at a crossroad and we have to reconsider the real purpose of technology. There is absolutely nothing tangible that Yahoo! has offered in last 15 years which has contributed to positive development of society or economic well-being of a community. All its other business acquisitions have been with the intention to improve market valuations to stay afloat. This singular focus on profitability has led the company to a situation where they have lost track of the purpose of their existence. Moreover, they have become deaf and blind to public opinion. It almost feels like an episode out of Gordon Ramsey’s Kitchen Nightmares! While everyone was criticizing them for their lack of diligence and bad investments, they were out there defending their actions. While everyone was pointing out Marissa Mayer to be the poor choice of CEO, their senior officials were arguing against it because of her Google background. One could have seen this coming from a mile away if only this sycophancy was avoided. I’m not writing off Yahoo! yet but clearly, they are the victims of their own praise and the corporate maneuvering by those who have orchestrated this deterioration. 

This opinion is inspired by the recent reports on Yahoo!’s troubling condition. There are other similar references in big tech businesses. The local business aspect is consequential to the big business failures as markets are affected by the mistrust that develops because of companies failing like this. Drop in investor confidence also hurts potential business opportunities. I’d love to hear your thoughts on this. Please leave your views in the comments below. I’ll appreciate if you rate and share this post. 

Written by Koustubh Bhattacharya 

The following two tabs change content below.
The articles published under TLB Bureau are either written by our staff writers or are selected works from contributors who are featured by our publication and are published with permission of authors.