Have you ever been to a thoroughbred rescue? Those horses aren’t all losers. Some were stakes winners, but they were gelded, meaning that no money could be made from breeding stud fees and so they were often run until they could run no more or started losing and then cut loose — donated to a rescue or a slaughter house. Even former Kentucky Derby winners can end up that way.
If that reminds you of the book Animal Farm, it should. Loyalty wasn’t necessarily rewarded because regardless of any ideology, Yahoo! was a business.
While I was at Yahoo! Search Marketing, there was a lot of mumbling and grumbling. Originally, when Yahoo! bought the Pasadena-based Overture, after the job anxiety had passed and we knew we were still employed, there was joy. Could anyone think of the Internet without thinking of Yahoo!?
Overture, originally called GoTo, was founded in Pasadena in 1997 out of Idealab and bought by Yahoo! in October 2003 for $1.63 billion. The quarter before the acquisition, $25 million of Yahoo!'s revenues were brought in by Overture. Google's billions in revenues are from the monetization from Web searches and based on Overture's original ideas of pay for performance.
In spring of 2005, Overture, now renamed as Yahoo! Search Marketing, began moving to Burbank and by early summer of 2006, the move was completed.
Theoretically, it was a good investment. Yet as time passed, the joke made by some Overture underlings was that we were Yahoo!'s unloved stepchild. That perception was not so far off.
Former Sunnyvale Yahoo! confirms this sentiment in his ruminations on what's wrong with Yahoo!:
Yahoo! makes its money from advertising. To make money in advertising on the Web, you need to have "inventory" (popular Web sites that a lot of people visit). But you also need a way to sell those ads. You need tools like campaign management, analytics, budgeting, reporting, A/B testing, and a whole host of others that are compelling, easy-to-use, and generally encourage advertisers to spend as much money as possible. In short, you need to meet the needs of advertisers, who in turn will give you money.
This former employee had worked on the inventory side (Mail, Messenger, Photos, Groups, and 360) for three years. All he knew about ad sales was they had a requirement to include space in the design for standard units. No surprise. What was surprising was his attitude. When his colleague in research wanted to go into product design, he suggested to go to the ad sales group where he believed, "there was a ton of low-hanging fruit and a ton of opportunity to tangibly improve Yahoo!'s financials."
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