I was recently lucky enough to be in a conversation with an ex-VC who, in the process of discussion, illuminated me on a variety of things, but one of the things that stuck was this:
"A company should never forget what its business is." Pennsylvania Railroad was at the top of its game, evaluated as the best run company in America, and was projected to have nothing but upsides. Within ten years of that point, they were bankrupt.
If you'd asked the executives of the company "What business are you in?", you likely would have gotten "the train business" as an answer, when in fact, the real answer was "transporting people and goods."
The train was, for all purposes, just the vehicle (in all senses) used to get that done. They focused on what they thought were their core competencies, and as a result, went the way of the Dodo.
I think it's interesting as it applies to Yahoo because, frankly, who knows what their core business is anymore, or what their direction is? Even with other semi-ambiguous "web" companies, you can usually target what, or how the company makes its money, and how they can expect to make their money in the coming months and years, but Y! has shifted gears so many times over the years, and made so many false steps into new markets, only to backpeddle out of those same markets just as quickly, I think it's hard for them, a rather successful business with a ton of money in the bank, to know where their money comes from tomorrow.
"A company should never forget what its business is." Pennsylvania Railroad was at the top of its game, evaluated as the best run company in America, and was projected to have nothing but upsides. Within ten years of that point, they were bankrupt.
If you'd asked the executives of the company "What business are you in?", you likely would have gotten "the train business" as an answer, when in fact, the real answer was "transporting people and goods."
The train was, for all purposes, just the vehicle (in all senses) used to get that done. They focused on what they thought were their core competencies, and as a result, went the way of the Dodo.
I think it's interesting as it applies to Yahoo because, frankly, who knows what their core business is anymore, or what their direction is? Even with other semi-ambiguous "web" companies, you can usually target what, or how the company makes its money, and how they can expect to make their money in the coming months and years, but Y! has shifted gears so many times over the years, and made so many false steps into new markets, only to backpeddle out of those same markets just as quickly, I think it's hard for them, a rather successful business with a ton of money in the bank, to know where their money comes from tomorrow.