Yahoo: 21 Years, 23 Mission Statements. 1 Lesson Learned

If the markets are right, Yahoo has a funny way of erasing value, aka sucking the life out of everything they touch.

While some of us have somewhat followed the rise and fall of the internet giant and watched it aggressively acquire some of the biggest internet properties over the years and somehow “screw them up”, I think there are a few valuable lessons to be learned for small businesses.

Let’s start with some data:

Even with more than $30 billion in ownership of Alibaba and Yahoo Japan, the market is valuing the full company at about $28 billion as of earlier this week. If we factor out those stakes (after taxes) and the company’s cash, the core of the company is apparently only worth a little over $1 billion.

That’s strange enough math when considering only the resale value of Alibaba and Yahoo Japan, but what about all the other companies that have been absorbed by Yahoo over the years? Since 1997, there have been more than 120 smaller companies that Yahoo acquired to fuel Yahoo’s growth.

The company’s reported transactions were purchased for a total of about $17 billion, and it divested about $1 billion, meaning that Yahoo gobbled up about $16 billion in new ideas and fresh talent without much apparent gain. And that’s not even counting the acquisitions without reported transaction costs.

CEO Marissa Mayer, who took control in July 2012, is responsible for only about 15 percent of those acquisitions, including the $1.1 billion purchase of Tumblr, which appears to be operating under a very light touch from Yahoo. Under Mayer’s tenure, Yahoo has spent at least $2.5 billion on material acquisitions and sold $670 million — a basket of properties that are collectively a lot closer to the company’s likely core value.

We can’t blame Marissa Mayer for the overall poor performance of Yahoo. Most of the deals made by Yahoo were closed way before she took the position as CEO.

Here is a sample of the companies they acquired within a 4 years time span:

So Yahoo purchased a bunch of companies, forcefully inserted them into the Yahoo branded offering and somehow still managed to suck. Bought Flickr: forced all the Flickr users to become part of the Yahoo family as they put it; turned what was the first image based social media into an image graveyard that fewer and fewer people cared about. Bought del.icio.us, a great link sharing community reddit like, forced it to swallow some Yahoo branding in exchange for its soul; now the links are automatically curated by some “algorithm” since no real human is there to actually curate and vote for links. Bought Tumblr, but for once, decided to leave it alone and as we can all see: it was Yahoo’s greatest decision.

It’s clear, Yahoo buys web properties, devours the soul of each and then puts them into the Yahoo graveyard of (once cool) websites.

What’s the problem?

Identity.

Yahoo for the past 10 years has been trying to figure WHO they were and WHY they existed. They flip flopped from one vision statement to another hoping that their users wouldn’t notice: Yahoo’s history of mission statements “flip floppage” (21 years, 23 missions). While we are sure few have ever read their about page, users “felt” the changes of Yahoo’s soul time after time. Instead of “sticking” to one mission and doing it well, they rushed behind giants like Google trying to emulate and re-create what other where doing a year late in the trend. They have proven to be good at jumping on trends, just always too late.

So what’s in it for you, small/medium sized business owner?

Branding is your soul. While you might not have deep pockets like Yahoo to acquire a company and hoping it to save you, you have all the power to create a meaningful brand experience. It all starts with a vision statement that you can honor.

You probably expect me to talk about your logo, don’t you? A logo can be part of a brand, but it’s not the whole story — not by a long shot. Your brand is the experience customers have when doing business with your company. It includes:

The benefits you commit to delivering. These are things like more time or money, recognition, acceptance, security or pleasure. Does your product or service deliver any of these benefits?

These are things like more time or money, recognition, acceptance, security or pleasure. Does your product or service deliver any of these benefits? The promises you make and keep. These include the features your product or service offers, and how you deliver them. Do you meet the deadline or delivery date? Do you include extras, or go above and beyond the ordinary? Do you find ways to add value?

These include the features your product or service offers, and how you deliver them. Do you meet the deadline or delivery date? Do you include extras, or go above and beyond the ordinary? Do you find ways to add value? How you follow up after you’ve delivered. This covers aspects of your business like how you keep in touch, how you deal with problems that arise and how you nurture your business relationships over time.

Yahoo flip flopped all along on what it promised to deliver and what it promised to be. Make sure you don’t fall for the same mistake. Find what you are good at as a business and stick to it, create an identity/brand that people trust and feel that they know deeply. Just because a trend tells you that an industry is changing don’t blindly follow it, figure out what your customers want and behave accordingly. Be critical.

Instead of doing what Yahoo did: ASKING people what they wanted, LISTEN for what people are saying they want. It might sound like the same thing but it is not. Use every tool available to you to get a deep understanding of your customers and keep giving them exactly what they came for, the first time.