Yahoo!'s Competitive Strength Weakening; Is Bartz's Plan Not Working?


With all the media hype still occurring around Google, Inc. (GOOG) and its newer (sometimes invasive) products and mobile operating system moves, have we forgotten about Yahoo!, Inc. (YHOO)? Morningstar analyst Larry Witt hasn't and he's not being kind -- saying that the internet pioneer's "competitive position is weakening." SO we ask: what is Yahoo! doing to differentiate itself and grow? What has CEO Carol Bartz done in her tenure there?

If there's something afoot, nobody is noticing. YHOO shares are still floating at the same level that they were almost a year ago, and Google has not remained silent in that time in growing its online marketing dollars and exploring/releasing new products and services to monetize anything online where Google has a presence, on any device and anywhere possible. Is Yahoo! floundering? Although the company has made so many mistakes (thanks, Terry Semel) in trying to seize search engine market share, it gave up and partnered with Microsoft Corporation's (MSFT) Bing service. Google is still killing it, even after that partnership.

And then social media is taking eyeballs from Yahoo! every month (thanks, Facebook and Twitter). Like Dell (DELL) in the hardware market, Yahoo! is competing but doesn't seem to have the fire to take on the market leader (nor the resources, strategy, or execution). Although Compete, Inc. statistics are to be taken with a grain of salt, the online traffic measurement firm indicated that Facebook had indeed passed Yahoo! in popularity in the U.S. for the month of February. Add to that a decline in internet search market share and one has to wonder: where is Yahoo! headed? More importantly, has Bartz changed the culture of the company like she said needed to happen? Where are the results? Is she worth the B- she gave herself?

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