Can Yahoo Succeed by Returning to Its Roots?

Yahoo CEO Marissa Meyer deserves praise. She is saying the right things about what Yahoo must do to regain momentum and put itself on the path to success. Based upon my 25+ years researching business success and failure patterns, what Meyer says she wants to do fits the patterns of success–at least on a big picture level. This is a plus since many companies stumble largely because their overall direction is totally wrong at the big picture level, thus, impeding success.

According to the January 28, 2013 Wall Street Journal article “Waiting for Yahoo to Call a Brighter Tune” by Spencer Jakab, Yahoo CEO Marissa Meyer said at the World Economic Forum in Davos that her company would “return to its roots”. As I see it, Meyer’s talk of returning Yahoo to its roots bodes well because a company’s roots are often intertwined with its strengths, and businesses succeed by building on their strengths.

Meyer also explains that returning to Yahoo’s roots “doesn’t mean to its heyday in the era of 56K modems.” Thus, I would say she seems to recognize that successfully going back to Yahoo’s roots entails returning to aspects of Yahoo’s earlier success, but doing so in a way that is relevant today and can differ from what was done long ago.

Yet, the Wall Street Journal article was not optimistic in its outlook for Yahoo. And, the article mentioned that Meyer sees what are generally thought to be Yahoo’s weaknesses as strengths that make it a “friendly company” compared with major rival tech firms.

As I said in previous writing, in addition to building on strengths, companies can successfully build upon what essentially is a latent strength, which can potentially become a strength in the future. Note that this is not the same as wishfully pursuing weaknesses that lack the potential of a true latent strength. Whether Meyer can successfully reinvigorate Yahoo will depend upon how well the company’s strengths, including any latent ones, are assessed and built upon. It will depend upon whether evolutionary steps can be identified and taken to get Yahoo where Meyer wants it to go. It can depend upon factors such as whether or not Yahoo really does have the capability to be perceived as a friendly company and to capitalize on that position.

Nonetheless, Marissa Meyer is on the right track with the big picture she is proposing for Yahoo. The question, however, still is: will she and Yahoo be able to flesh out the big picture into something more concrete that succeeds?

This is not strictly an execution issue. A more clearly defined strategy than what was disclosed in that Wall Street Journal article is needed to evaluate whether Meyer’s on-track, but still broad, direction is likely to work. It remains to be seen whether Meyer and Yahoo will be able to more specifically define how to turn what others see as weaknesses into strengths the company can build upon.

Yet, according to my research into business success and failure patterns, what Meyer said puts her on the right track. Unlike what Meyer seems to have in mind for Yahoo, so many companies in need of turnarounds aspire–unsuccessfully, of course–to compete in entirely new areas where they have no strengths. Still, success for Yahoo requires more than just talk.

In conclusion, Meyer at least has the advantage that she sounds like she’s pointing Yahoo in the right direction. So, let’s see where she actually can take it.

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