A fellow had just been hired as the new CEO of a large high tech corporation. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. "Open these if you run up against a problem you don't think you can solve," he said.
Well, things went along pretty smoothly, but six months later, sales took a downturn and he was really catching a lot of heat. About at his wit's end, he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, "Blame your predecessor."
The new CEO called a press conference and tactfully laid the blame at the feet of the previous CEO. Satisfied with his comments, the press -- and Wall Street - responded positively, sales began to pick up and the problem was soon behind him.
About a year later, the company was again experiencing a slight dip in sales, combined with serious product problems. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, "Reorganize." This he did, and the company quickly rebounded.
After several consecutive profitable quarters, the company once again fell on difficult times. The CEO went to his office, closed the door and opened the third envelope.
Why? It's a network of Web sites with fairly generic functionality, like a content publishing system (frontpage, news, sports, tech, health), a search engine querying Bing API, Web-based email and a few other projects.
If you were building such a project from scratch, would you just not get anything off the ground without hiring 12,500 full-timers first? Most likely you would.
There are several structural inefficiencies to Yahoo!, most of them rely on 1990 processes in areas such as ad sales (which are still strongly salespeople-driven, try to buy a premium ad with your credit card, for example), low investment in automation and tooling, low amount of shared code across the Web properties (no common UI element library, for example, just guidelines), and structure that lends itself to hiring as many product managers as possible to coordinate all those inefficiencies across various products.
I've been preparing to try to make an offer for Flickr in the event it goes up for sale (separate from the rest of the web business), organizing it as a benefit corp to be a long term business not to be put up for sale. It shouldn't be an Instagram. Its not a social network. Its a photo site that helps you organize/keep your photos, as well as share them (there's a difference).
I don't plan on making it profitable. I plan on just making it break even. It was previously profitable for Yahoo on Pro accounts alone (disclaimer: I am a pro account holder).
Indeed. It's the job of a good regulatory environment to make the two coincide as much as possible. (Including a tax system that internalizes externalities. See https://en.wikipedia.org/wiki/Pigovian_tax)
