Yahoo’s got an identity crisis

Adriene Hill Apr 4, 2012

Sarah Gardner: Yahoo today announced it’s going to lay off 14 percent of its workforce. That’s 2,000 employees. They were all supposed to get pink slips today.

This is the sixth major layoff in four years for Yahoo. The Internet company says it’s going to focus on its “core purpose.” But with the online world changing at warp speed, just what is Yahoo these days?

Marketplace’s Adriene Hill explores Yahoo’s identity crisis.

Adriene Hill: Yahoo still gets a lot of traffic. Nielsen ranks it as the third top web brand in the U.S., behind Google and Facebook.

But Yahoo is not one of the cool kids.

David Hellerman: Yahoo and its traffic, even though it’s large, is no longer fashionable.

That’s eMarketer analyst David Hellerman.

Part of the problem, he says, is Yahoo’s identity.

Hellerman: Their identity today is very hard to define. In that you think of it, Facebook you know social media. Google, even though they have their hands in other things, you think search.

Yahoo used to be the convience store of the online world — the portal where you could check your email, scan the headlines, do a quick search.

But today, people don’t use the web that way. They cherry pick. And Yahoo is left doing some soul searching.

Philip Birnbaum-More: What to do? How to act basically? What choices to make?

Philip Birnbaum-More is a professor at USC’s Marshall School of Business. He thinks Yahoo’s got to focus-up. But on what?

The analysts I talked to didn’t all agree. Here’s IDC analyst Karsten Weide.

Karsten Weide: There are three areas that are kind of hot that Yahoo needs to focus on.

He says: mobile, social and video services. Hellerman thinks the company could do well to concentrate on ad sales.

But the one thing everyone seems to agree on: a successful Yahoo will likely be a smaller one.

I’m Adriene Hill for Marketplace.

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