Wednesday, January 30, 2008

Yahoo having trouble with the vision thing

Something in this NY Times Bits post about Yahoo's downbeat earnings call and resulting stock swoon reminded me of a book I'm reading now. Here's the bit that triggered the connection:

...Mr. Yang and Ms. Decker’s strategy is essentially “vision goes here.” They want to be the “starting point” for users on the Web. They want to be the “must buy” for advertisers. And Mr. Yang said he would assume an “aggressive investment posture.”

The only thing missing from that is the substance. Why would users start at Yahoo? How are advertisers going to find Yahoo superior? And what will the company invest in?

...Maybe Yahoo simply has a communication problem. Perhaps it will emerge with great products for users and advertisers. But my take is that it will be much harder if its customers, employees and stockholders don’t understand what it is doing and why they should care.

The book is "Executing Your Strategy" (I'm going to have to post on clunky titles affixed to good business books) by Mark Morgan, Raymond Levitt and William Malek. The book says that to create a vision, a company must answer three critical questions. These questions drive and prioritize the handful/dozens/hundreds of projects that will help the company achieve its strategies. They are:

  1. Who are you?
  2. Why are you here?
  3. Where are you going?

From the earnings announcement and conference call, if Yahoo has deeply considered and answered these questions, they're not saying.