Startable – Healy Jones’ & Prasad Thammineni’s Blog

There has been a lot of talk recently on Yahoo’s reorganization and impending doom. I agree that the company faces some really challenging times. The ad market that they generate their revenue from is going to shrink this year. But I think that the rumors of Yahoo’s impending death are a bit premature. Here are my:

5 Reasons why Yahoo isn’t going to die

1) Solid #2 in search

Ok, I know, I know, Yahoo’s search results are not as good as Google’s. That’s why I don’t use Yahoo for search… but still, they have a solid number two position in the search market. Which means they should have enough data to improve. From Comscore’s January 2009 search engine rankings: 

Google Sites led the U.S. core search market in December with 63.0 percent of the searches conducted, followed by Yahoo! Sites (21.0 percent), Microsoft Sites (8.5 percent), AOL LLC (3.9 percent) and Ask Network (3.7 percent) 

Yahoo has the number 2 slot in what may be the most important industry in the technology industry. Come on people, they should be able to do something with this!!

2) Ad powerhouse  

165 million unique visitors through their ad network in December, the number two position to Platform-A. Reaching something like 87% of the US internet population. Recent innovation from this group bodes well for the company as a whole. Their new ad retargeting solution is really pretty darn cool. It uses data/views from search and display ads to generate better targeting/ROIs for advertisers. If only the search group could innovate like this.

3) Data

2.8 billion searches in January. Huge amounts of display served. Really simple stuff with this data must come up with some seriously interesting, statistically significant conclusions. A little bit of innovation here could go a long, long way. Again, the ad retargeting solution mentioned above is a clear example of how powerful this data is.

4) Sweet content/sticky destination sites.

Yahoo has the second most visited sites on the web (again number two to Google). 146 million uniques in January. That is nothing to sneeze at. And Yahoo’s sites are sticky. The average user spend 44 minutes on Yahoo!Sports. Ah, the productivity of the US office worker.

5) Cash, cash, cash

Point to a company with $3 billion in cash and only $60ish million in debt that’s died. Oh, ok, I’m sure there is some large US bank that’s fubar’ed itself that badly. Outside the financial services world. You can’t. Yahoo can weather just about any storm. And guess what – Google isn’t hiring like mad anymore and soaking up all the best talent. In tough times, solid engineers are happy to have a job with a big company ASSUMING THEY GET TO WORK ON COOL PROJECTS. Yahoo should have tons of really great things to work on, if they can get the strategy right.

I’m optimistic that Yahoo can figure this thing out if they can just get their act together. Also, as a venture capitalist, I want them to survive so they can buy up tons of technology companies!! If they merge with MSFT or go away then that’s one less important technology acquirer.