Yahoo!’s Peanut Butter Manifesto

The big news swirling around tech circles this weekend is the leak of an internal document written by Brad Garlinghouse, a senior vice president at Yahoo!. The memo, which was published by the Wall Street Journal, has come to be known as the Peanut Butter Manifesto. In it, Garlinghouse calls for a major overhaul at the company, which some see as his power move.

One of the tenets of his plan is to kill the redundancies. This is made clear in the following quote:

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.

Richard MacManus, writing at Read/WriteWeb, agrees with Garlinghouse, and draws out the surface-level implications.

So like Garlinghouse, I think Yahoo needs to trim down their product portfolio. I’d go as far as to say they need to ‘kill off’ their web 2.0 brands.

I, however, disagree that these brands should be killed off.

Yahoo!’s track record of integrating acquisitions into the company brand has been abysmal at best. Broadcast.com, GeoCities, LAUNCH, and numerous other once valuable brands have all been lost to the Yahoo! name. I suspect that Yahoo! is acutely aware of this, as they’ve been much more cautious with recent properties like Flickr and del.icio.us. Yet, like lambs to the slaughter, these two are mentioned by name in the memo.

Fred Wilson, an investor in del.icio.us, had hoped that Yahoo! would integrate the backends for del.icio.us and MyWeb. That would have been a wise strategy. However, not only have they not done that, they’ve also released a new beta of the also overlapping Yahoo! Bookmarks.

By integrating the backends of overlapping services – Yahoo! Bookmarks and del.icio.us, Yahoo! Photos and Flickr, etc. – Yahoo! could realize a number of benefits. Initially, they’d be able to reduce the development effort required for each project. Once information is housed in a single silo, that knowledge can be exploited across other services, enhancing search results, for example. Finally, they can recognize the value of retaining multiple brands. (As any decent engineer will tell you, MVC is a respected design pattern for a reason.)

It’s the point about branding that is important here. Brands serve to attract and retain an audience, with different groups migrating to different brands. In this respect, Yahoo! would be prudent to take a page from the media companies, which own and maintain multiple, often overlapping brands across television, radio, and print. For example, News Corporation airs both FOX and FX, while Time Warner runs HBO and Cinemax.

It is crucially important for Yahoo! to not alienate users of Flickr and del.icio.us moving forward. The people who use those services represent technology-minded early-adopters, a valuable audience to have. Those same people, of whom I count myself one, are also not likely to use Yahoo!’s mainstream offerings.

From personal experience, my use of Yahoo! was negligible to non-existent before they bought Flickr and del.icio.us. Maybe it was the purple and yellow, I’m not sure. One thing I do know, however, is that if they mess too much with the formula of those two sites, I will leave and not look back.

To be fair, there is much to agree with in Garlinghouse’s memo. Yahoo! does have a great number of challenges to overcome. I’d postulate though, that the desire to tie everything closely with the Yahoo! name is one of the biggest. Bring the backends together, yet leverage the strengths across different brands.

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