Home / Technology / Bits: Farhad’s and Mike’s Week in Tech: The Cautionary Tale of the Fall of Yahoo

Bits: Farhad’s and Mike’s Week in Tech: The Cautionary Tale of the Fall of Yahoo

Also, Google is still minting money, as is Amazon. And Amazon said it employs nearly 270,000 people, which is up 47 percent from last year. That’s nuts, right? I can’t think of many companies that do that.

Farhad: At Microsoft, meanwhile, things are going the other way. In May the company said it would be cutting 1,850 jobs in its latest wave of layoffs; now in a new regulatory filing, Microsoft reports it will be laying off 2,850 more.

Mike: And practically every chief executive mentioned Pokémon Go on their earnings calls, which was funny and predictable. Even Hillary Clinton and Donald Trump have Pokémon fever. Or should I say, they’re pandering to Pokémon players. Anything to capture that Wigglytuff voting base.

Apparently Tim Cook doesn’t even know how to properly pronounce Pokémon — he said something like “pokey man” — which probably threatened to hurt Apple’s quarterly financials. Luckily, Apple didn’t do as poorly as analysts expected, and the stock actually fared well. And by “didn’t do as poorly” I mean they still made bazillions of dollars, as usual.

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Farhad: One thing they’re doing with those bazillions: Making self-driving software for cars, according to Bloomberg. Apple’s car project, known as Project Titan, has previously been devoted to building its own vehicle. But after lots of shifts in personnel, the company now seems to be trying to prioritize the autonomous car software. Apple still might also develop a car, Bloomberg reported, but it could establish partnerships with established car companies to realize its vision for the future of driving.

Which sounds cool, but when I’m a peregrine falcon, I won’t need to drive anywhere, because I’ll be one of the fastest animals in the world.

Mike: Yeah. In non-earnings news, folks are starting to think that the hackers who breached the Democratic National Committee may have been connected to the Russian government, which brings us full circle to the plot of “The Americans” on FX.

O.K., now onto the big thing. Yahoo, the company I never think about except to say “ha, ha, Yahoo,” finally agreed to sell itself to Verizon for about $ 5 billion, a relative pittance compared to Yahoo’s market cap in its heyday as one of the internet’s premier companies. And thank God for it. If I had to read another Yahoo story I was gonna quit journalism.

That said, I have an idea for its send-off from us. We should look at Yahoo not as a burning effigy to the god of irrelevance, but as a cautionary tale for tech companies of today, a history of how not to become something that, eventually, is sold only for the value of its parts rather than its potential.

I’d like to hear your thoughts first, believe it or not.

Farhad: I think Yahoo’s failure offers one lesson above all for tech companies: Invest in technology. I know that sounds obvious, but it’s one place where Yahoo totally missed the boat from the beginning. It started out in the 1990s as a guide to the web that was created by human beings. In other words, from its very inception, Yahoo was more of a media company than a tech company. And that origin story infected its culture — sure, it had lots of engineers and acquired lots of innovative tech, but at its core Yahoo never really saw itself as a company whose mission was to invent the next big thing.

Notice how today’s tech behemoths — Apple, Amazon, Alphabet and Facebook — offer a completely different outlook on the world. Each of these companies regards software and hardware as their essential areas of expertise, the basis from which they can spin out into so many different areas that are far beyond their primary businesses.

Yahoo never really got that, and so, when the tech world changed, it failed.

Mike: I really agree with this, mostly because I always like to see Wall Street’s reaction to tech companies reporting quarterly losses. Maybe I’m brainwashed, but it’s funny to hear people bemoan the death of innovation at companies and in the same breath criticize companies for spending heavily on research and development. I appreciate fiscal responsibility, but I think looking at a quarterly report without that appreciation is a bit shortsighted.

I will give Marissa Mayer this: She seemed to recognize what you just said, how the industry had changed around Yahoo and it had failed to adapt to the times. And that was her mandate coming in as a product-and-engineering-oriented C.E.O.: Buy and build a bunch of consumer products to try to catch up to peers.

Problem was, it was too late. Facebook owns photos, Google owns search, Apple owns mobile hardware and Amazon owns shopping. What was left for Yahoo? Basically what it had done for some time, which was become a sort of media company and portal, and that wasn’t the path Mayer wanted to pursue, at least not fully.

It’s probably more nuanced than this, but we’re out of time and I want to go lie in the grassy park with my dog. Till next week, Falco! I mean, Farhad!

Farhad: See you. I hope you don’t get fleas.

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