All the major tech sector firms have their issues. Apple just lost its transcendent leader. Google’s sprawl, some fear, may be leading it down the same path that Microsoft took as it lost its crown as king of the tech mountain. Facebook, well, really, doesn’t have many real problems considering that its rumored-to-be-coming-soon IPO is expected to take in $100 billion. But privacy concerns persist — so much so that an FTC investigation led the agency to mandate the social network to undergo 20 years of privacy audits and obtain consent from users before sharing their personal information.
But such issues pale in comparison to the crisis Yahoo faces, something that is enticing some firms to make a bid for the former tech giant.
Primarily, the company is suffering from a lack of diversification of its revenue stream. To remain healthy, it likely needs to find ways to make money that aren’t related to email, as the chart above from Business Insider shows. As the publication notes, “For all of its success, at its core, Yahoo is still an email business. People use Yahoo email and then from there land on its other properties. The rise of smartphones and iPads is a problem for Yahoo. On those devices, email is a native application that doesn’t encourage people to checkout Yahoo’s pages.”
We highlighted this threat — which, at least in part, prompted the company to fire CEO Carol Bertz in September — in our annual “Year in Risk” look-back at previous 12 months.
The CEO of Yahoo, a company that helped define the internet as a revolutionary means of communication, found out the old-fashioned way that she had been fired: over the phone. Carol Bartz’s uninspiring two-year reign atop the firm came to end as the company showed little ability to adapt its business model to thrive in either advertising or content creation after partnering with Microsoft in hopes of preserving its original core business — internet search. Yahoo’s stock has yet to recover after cratering in late 2008, leaving many tech analysts to wonder if the company has a future.
It’s hard to say what the company will do to revamp its long-term strategy.
But it is becoming increasingly clear that the current route may be a path to nowhere.
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