Is it just me or is anyone else impressed with this move? I am not really a big fan of Yahoo! however the company seemed to have been in a state of disarray after being completely attacked in the media for not letting Microsoft buy them. The CEO of Yahoo! Jerry Yang,looked weak and really unable to direct the companies future. That was until he went out and did this deal.
Yahoo! has agreed to let Google place adds on its sites. This will result that the millions of people browsing Yahoo! will be bombarded with advertising adds from Google and not Yahoo! This does sound crazy in so many ways. Yahoo! who is a competitor to Google in the online advertising space is giving business to a competitor. But I think it genious for so many reasons.
Yahoo! just has never had the kind of success in the online advertising market as Google has. Letting a successful partner generate revenue for you is a smart business move. After all Yahoo! does have so many visitors to its sites. Yahoo! claims it will generate 800 million dollars in revenue in the first year of the deal. Thats not bad, actually sounds good.
What really impresses me about the deal is that Yahoo! is open to the idea of making bold moves to bring the company back to respectability. In my opinion this should be the first of such moves. The company needs to focus now. The best thing it could do is become leaner. Shed all the extra services and start to focus on some core services. These services would be products like Yahoo! mail and Flikr to begin with. They are both products that are prime for innovation. If Yahoo! can add new value to these core services by adding new features or providing a redesign that revolutionizes either of these products then a strong message is being sent. Yahoo! can still hang with the big boys and create excitement. This is just missing.
The worst thing Yahoo! can do is go out and buy another product or services. There is a crazy suggestion that they should buy Facebook. That would be hellish. What they should do is hire someone from Facebook or someone out their who has the innovation and creative mind to bring existing Yahoo! core services to the next level, not spend more money buying a product that just expands Yahoo! into another direction.
To sum it up, Yahoo! needs to chant only one mantra to capitalize right now on this great move with Google, and that is “Focus, Focus, Focus“!