3 Important Lessons to Learn from Yahoo’s Blunders

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Last week, Yahoo CEO Marissa Mayer spoke about her combative plan to simplify the company in hopes to gain back traction.

Reporting a 4.4 billion dollar loss in Q4 last year, Yahoo announced plans to raise more than $1 billion by selling non strategic assets to aid in the drastic plan, according to Fortune.

Yahoo’s revenue is declining even though Mayer has dished out more than $3 billion on acquisitions and introducing features designed to bring in more traffic and advertising. They have cancelled three TV shows and will be shutting down the Video Hub Mayer built, Yahoo Screen.

The company faced a hefty layoff in 2012 and now faces the same situation with plans to cut 15% of staff (1,700 jobs) and close five offices by the end of this year, putting the staff count down to 9,000, Fortune reported.

Yahoo said their focus will be on global platforms including Search, Mail, and Tumblr, as well as on their Media articles: News, Sports, Finance, and Lifestyle.

Overhaul, in all likelihood, represents Mayer’s last chance to win over uneasy shareholders as she figures out how to restore Yahoo’s growth after three and a half years of ineffectiveness.

Unless a spin-off or a sale happens, Mayer said in response to displeased investors during the fourth quarter earnings call, her highest priority is “making sure we really execute inside the company, because that’s what unlocks the most shareholder value.” She added, “We need to create the best version of Yahoo we can possibly create.”

 

Three lessons companies can learn from Yahoo's blunders:

  • Having a clear vision is key. Yahoo has gradually lost focus and does not have a clearly defined purpose.
  • Cutting staff makes existing employees feel strain and stressed. Watching others be let go is discouraging and can make employees feel insecure. Yahoo's rough patch has made it a challenge to retain top talent. New York Times reported more than one third of Yahoo's workforce has left within the past year.
  • Streamlining the outside brand strategy plays a crucial part in the company's value. From a PR perspective, Yahoo's mistakes will be extremely hard to bounce back from. A strong brand is critical as it can attract or deter top talent and business partners.
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