Leadership Change Is Only the First Step for Yahoo

Once Internet Companies Realize They're Brands, They Need to Act Accordingly

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It all seemed so easy in 1995. The internet was still in its nascent stages and all it took to successfully market an online brand was to give it a whimsical name, play hip and play up the fact that there were a couple of young wizards at the helm. Given that most internet brands were first on the block also added to the success equation. Way back then there was no real need for an online brand to differentiate itself in any way. It was special by dint of its very existence.
Suffice it to say, in today's digitally accelerated environment the internet has evolved from hip to handy, and young wizards abound, as do internet brands with whimsical and not-so-whimsical names. In fact, over the past several years internet brands have proliferated almost as fast as any other type of brand. The cyber aisles are as overwhelming as any supermarket aisle. This means that to succeed, an internet brand has to do what any other brand does: differentiate itself in some meaningful, focused way.

The story of Yahoo
A quick review of the recent headlines about Yahoo tells the whole story. No internet brand, no brand at all, can survive, let alone thrive, unless it can clearly define what it stands for and people care about what this is. This is not a marketing challenge but a fundamental business challenge. It not a matter of who's standing on top, but what a brand stands for that determines success.

Now, Terry Semel's departure as CEO of Yahoo didn't surprise me, just as it didn't surprise anyone on Wall Street, in Silicon Valley or any number of blogging technorati. The company's profits had been slipping for a while. What did surprise me was that Mr. Semel failed to recognize that a brand can't exist simply by being a little bit good at everything. In its current state Yahoo is a little bit good at search, a little bit good at content, at attracting advertising, at e-mail, at convenience. As of late, it's also a little bit good at providing coverage of college athletics as indicated by the purchase of Rivals.com. This ain't even a little bit good enough. To make it into the future the company is going to have to stop playing around the edges and focus on one thing to be really, really good at -- better than any other brand -- and put all it's efforts, marketing and otherwise, behind this.

More than new leadership needed
In my book, "BrandSimple," I write about how the best brands in the world have always been built on simple, relevantly different ideas that drive everything they do and set them apart from the competition. Replacing Mr. Semel with Jerry Yang, one of Yahoo's co-founders, offers some hope for the brand. After all, who better than one of its original young wizards to restore some of its innovative magic? But it's going to take more than just a change at the helm to restore Yahoo's place as a leading brand in the online world. Before he goes any further, makes another acquisition, launches a promotion, changes branding tactics in any way, Mr. Yang and his management team, CMO included, need to identify a single, simple something that consumers associate with the Yahoo brand and meets their evolving life-online needs in some unique way.

Yes, the first brands on the internet had it easy. Marketing was easy. But the story here is that internet brands have become traditional brands. Staying out in front no longer has anything to do with whimsical names or remarkable stories of post-adolescent geniuses. As Yahoo goes back to the future by reinstating Mr. Yang as CEO, he faces the same challenge Mr. Semel faced. How can Yahoo meaningfully differentiate itself and how can it deliver what it promises? It's only when the brand tackles this that the marketing folks will be able to do what they do. Play it up for all it's worth.
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