For years I have been a fan of Yahoo! This has been driven by my deep antipathy to their competitors and respect for their professionalism in an often unprofessional business.

Yet over the last months as video and Consumer Generated Content (CGC) have exploded, Yahoo! has felt increasingly out of touch. Their big news of the year was the re-launch of Yahoo! Finance, not exactly visionary and certainly poorly over-priced in a highly competitive market. Their initially well orchestrated entry into search advertising, the purchase of Overture has sputtered. Now their struggle to launch a branded search product appears both incompetent and irrelevant. Why not just do a deal with Google and re-allocate precious resources to fighting the war for the Future.

The question is, can they find the battlefield? Yesterday at the Goldman Sachs Conference CEO Terry Semel gave warning of lowered expectations for Q3 results, pinning the blame on external issues: “weakness in some of the most economically sensitive categories” or possibly “issues in advertisers’ client businesses”. Replay the webcast here.

Neither the price of gas nor slow car sales are at the root of Yahoo’s problems. It is simple lack of vision. Yahoo! completely missed the boat on CGC/Video/Community phenomenon. They showed no interest in developing viral content or functionality, either of which could have re-energized their communities. They’ve missed multiple opportunities for content partnerships (their just announced partnership with CurrentTV has no launch date). Their mobile content isn’t up to snuff. And, critically, Yahoo! isn’t cool any more - when was the last time someone sent you a link to content on Yahoo!?

Solution: find out how people are using media and how they want to use media but can’t yet and deliver whatever that is before Google does.

Kathy Sharpe, CEO

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