For Sale: One Used Internet Company Called Yahoo
Yahoo goes on sale Monday. At least some of you reading this are thinking, "Yahoo? Are they still around?"
Yes, this company founded in 1994, is ancient by Internet standards, but, according to the measurement company comScore, Yahoo sites are the third-most trafficked on the Internet. Among its properties are Yahoo Finance, News, Search, Mail, Tumblr and Flickr.
Why is Yahoo on sale? Despite having a billion monthly unique visitors — as the company claimed in its 2014 report — Yahoo just hasn't been able to make its investors happy.
Over the last decade, six different CEOs have passed through its doors. The latest, Marissa Mayer, is a talented computer scientist who was one of Google's earliest employees and played a crucial role in its success. But Yahoo is a puzzle that, after nearly four years, even Mayer can't solve.
"It's not like Yahoo doesn't have revenue coming in, they do," says analyst Rob Enderle. "They just don't have enough revenue coming in to cover the costs."
When Yahoo was founded, the Internet ad business was small and Yahoo was popular. It seemed like it could be a big player as the Internet grew up. But now, Facebook and Google have eclipsed Yahoo, with sophisticated algorithms that target the ads to the most-interested eyeballs.
Yahoo, for its part, is expected to capture more than $2.6 billion in worldwide digital ad revenues, according to eMarketer. But that's only 1.5 percent of the online ad market. Google and Facebook control 40 percent.
Though CEO Mayer has made some high-profile content acquisitions, such as the blog site Tumblr and talent like David Pogue and Katie Couric, she and her predecessors have spent a lot of time trying to make Yahoo search better.
Yahoo may be the number three search engine in the United States, but that only amounts to less than 13 percent of the market share. Google has nearly 65 percent and Bing has the rest.
Enderle thinks Yahoo instead should have tried to be a social site more like Facebook. "Facebook is incredibly profitable," Enderle says. "They should have focused more on making the communities their center of power than the information."
We asked some Yahoo users what has kept them loyal to the company. Yahoo Finance, for example, has garnered praise from many people who like its tools for learning about stocks and companies.
Many of the people who responded to the NPR inquiry said they stay on certain Yahoo sites because they've been there for a long time.
"Yahoo itself has never been anyone's favorite," says Jen DeMayo, who co-founded a listserv for parents in the Washington, D.C., area with 6,500 subscribers. "It's just sort of the platform where it started and no one's moved it anywhere."
There's been debate over which companies are going to bid for Yahoo. The sale is not expected to include Yahoo's most valuable assets, namely its share in the Chinese online retailer Alibaba and Yahoo Japan.
Potential buyers of Yahoo's other properties include Verizon, AT&T and Comcast. These companies have a way to reach people over the Internet, but ownership of Yahoo might give them a better relationship with consumers and a lot of that precious stuff called "user data" which will help them further understand tastes and demographics.
What will the sale mean for those tens of millions of people who still use Yahoo products? It's not clear. Whoever buys Yahoo may try hard to keep its users — or not. Or it could mean the end of the Yahoo brand and with it, an era of Internet history.
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