New Yahoo CEO Deciding Whether to “Hold” or “Fold” Search Business

Thursday, January 15th, 2009 by Andy Beal

New Yahoo CEO Deciding Whether to “Hold” or “Fold” Search Business

Dow Jones reports new Yahoo CEO Carol Bartz’s gut instinct is to hold on to Yahoo’s search business–and I tend to agree.

She apparently…

…told employees on Wednesday that she needs to better understand the pros and cons of selling the struggling Internet giant’s search business, but her gut instinct was not to.

While Yahoo Search may not show signs that it can compete with Google–and its recent acts are turning off advertisers–the psychological impact of dumping its search business could be huge. Without search, Yahoo would find it a lot tougher to gain the attention of the media and its (our) infatuation with all things search. Need proof? How often do we discuss AOL, since it pretty much gave up on the search race?

There may come a time when it will make sense for Yahoo to sell off its search division, but the company is beat-up and bruised right now. Just as I wouldn’t sell my home during the housing bust, Yahoo should take the time to sit back and decide if it really wants to get out of the search biz.

What do you think? Should Yahoo sell its search division or not?

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24 comments on “New Yahoo CEO Deciding Whether to “Hold” or “Fold” Search Business”

josh Says:

January 15th, 2009 at 12:33 pm

If Yahoo isn’t search, then who the hell are they?
Dan London Says:

January 15th, 2009 at 12:51 pm

They are a portal not a search engine. People go to Yahoo! to do things (fantasy football, check email, etc). If people do search on Yahoi! it is to find things on Yahoo!

Dan London’s last blog post..Don’t Judge a Person by Their Twitter Profile
Mike Says:

January 15th, 2009 at 12:57 pm

could not agree more. Let’s assume for one second that Yahoo and Microsoft are ultimately after the same thing – control of the interactive ad space. That includes search and display. If that’s the case (which it is), then why would Yahoo put itself at a disadvantage by enabling their competitor (Microsoft) to better compete for the whole ad pie. Short term, maybe giving up search helps the balance sheet. Long term, as you point out, it’s an awful decision. What is Yahoo without search? Answer: AOL. A search deal would only accelerate Yahoo’s demise. The only people for a Microsoft/Yahoo search deal are those that institutional investors (and their supposed seperated by a chinese wall analysts) and traders who are under water on their shares since they bought when Microsoft made an offer for Yahoo! Wall Street has screwed up enough as it is. Why should Carol let them tear up Yahoo!? Good for her.
Quilmes Verano Says:

January 15th, 2009 at 2:20 pm

Let’s assume for one second that Yahoo and Microsoft are ultimately after the same thing – control of the interactive ad space. That game includes search and display. If that’s the case (which it is), then why would Yahoo put itself at a disadvantage by enabling their competitor (Microsoft) to better compete for the whole ad pie. Short term, maybe giving up search helps the balance sheet. Long term, as you point out, it’s an awful decision. What is Yahoo without search? Answer: AOL. A search deal would only accelerate Yahoo’s demise.
Jaan Kanellis Says:

January 15th, 2009 at 2:36 pm

Good point, yahoo Search bad and good (bad) does keep it in the business news. Of course that doesnt help its bottom line at all.

Jaan Kanellis’s last blog post..Predictably Irrational by Dan Ariely: The Hidden Forces that Shape Our Decisions Book
Menno Says:

January 15th, 2009 at 5:35 pm

I have always wondered why Yahoo puts so much crap on their front page. It looks like any other site. I go to Google because it’s nice and clean: search bar and some links at the top. If Yahoo goes back to their core and put their other products into the spots like Google does then I see a lot more people go back to Yahoo… Yahoo needs some bang! Hopefully the new manager makes the right decisions.
Long Island Insurance Says:

January 15th, 2009 at 5:57 pm

I personally hope that Yahoo and MSN somehow merge (I don’t care who buys who) because I hate monopolies and right now – Google definately has one! I think the 2 search engines will be able to take on the “giant” if they put their efforts together!
Utah SEO Pro Says:

January 15th, 2009 at 6:17 pm

Fold

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Utah SEO Pro Says:

January 15th, 2009 at 6:17 pm

Fold.

Utah SEO Pro’s last blog post..An Interview with Utah SEO Pro (Jordan Kasteler) by Martin Bowling
R&B Love Songs Says:

January 15th, 2009 at 6:18 pm

I don’t know. I think Yahoo could remove their search but they’d have to put a great emphasis on promoting their community features. Losing search is a big crux as you said, AOL is a nobody now. So they’re going to have to do a lot of work to boost their portal status, but it is possible.
DF Marketing SEO Says:

January 15th, 2009 at 9:58 pm

They need to simply work hard to be more innovative. Come out with products and information usage methodologies that truly make an impact! They haven’t set themselves apart as being unique!
Jayson Says:

January 15th, 2009 at 11:44 pm

Do you know how much search loses the company each year? If it loses tons of money, it may be best for the company to stick with what pays the bills and make those aspects better. They could always get media attention from being more active in other niches since they have a portal for everything.

Outside of Internet Marketing sites, I only hear about Yahoo! on the news when they mention significant movement in stock prices or when Yahoo! gets a new CEO.
R&B Love Songs Says:

January 16th, 2009 at 12:02 am

Jayson, was that said because Yahoo Search DOES lose them a lot of money?

If that’s true, they probably should gut it, but not without putting a lot of new features into building the portal into a stronger community driven centerpiece.
Mike Says:

January 16th, 2009 at 1:15 am

Are u guys serious? Search is by far and away yahoo’s most profitable division, and is growing while display contracts during this recessionary period? And the long term success of their display division I dependent on their ability to leverage search data, and vice versa. Why do u think Microsoft wants yahoo’s search business so badly.
Btw, yahoo is profitable (may not be this quarter) and has over $2b in cash. They aren’t GM.
Goran Web Design Says:

January 16th, 2009 at 1:28 am

I agree with you on this one, they should hang on to search for a while still… And they especially shouldn’t cut it out of their arsenal during a time of such financial woe.. It could be a decision they’d come to regret in more prosperous times
PS3 Says:

January 16th, 2009 at 3:06 am

Trying to sell something when the market thinks you are beat up and bruised is a recipe for a undervalued sale, it would be madness for Yahoo to offload search now.
Quilmes Verano Says:

January 16th, 2009 at 8:51 am

Despite the fact that Yahoo! sucks as much a it does, it still is #2 in the search business.
Nicole Price Says:

January 16th, 2009 at 8:57 am

No, Yahoo should not sell off its search business. The entire image of Yahoo is built around the search business. All efforts must be made to catch up with the leaders and perhaps even attempt to over take them. Improvement to its search business is the route to take. Not to say that the other parts should be ignored but, this foundation should not be.

Nicole Price’s last blog post..MP3 Music
Nicole Price Says:

January 16th, 2009 at 10:33 am

I do not think that Yahoo should abandon their search business. This will be like destroying the foundations on which the building is built. They should instead, try and improve and innovate and regain market share.

Nicole Price’s last blog post..MP3 Music
Jayson Says:

January 17th, 2009 at 2:12 am

Yeah I was serious! I had no idea, thanks for the clarification, if it makes the company tons of money, getting rid of it shouldn’t even be an option. Just maintain and do better in other places and they’re good..
Jacques Seoman Says:

January 17th, 2009 at 7:45 am

We need the competition, maybe this lady can steer it in a more effective manner! It will take something special though! So I say don’t can it!
Jason Kuiper Says:

January 17th, 2009 at 12:53 pm

U give up the search engine, you fold the cards!
Xbox 360 Says:

January 18th, 2009 at 9:45 am

@Josh… they would be purely Mail
Linda Bustos Says:

January 19th, 2009 at 3:21 am

I think Yahoo should keep search. I use Google all the time but would feel less happy about that if I had to use it because there were no other options (Live Search is not considered an option). Using Google makes me feel better about my results because I can choose to use it over engines I feel to be less relevant. Take away that perception, and I no longer can do a little superiority dance every time I hit the big G.

Viva Yahoo Search!

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