[Yahoo’s Lemming Strategy] – Can someone explain to me Yahoo’s new “lemming” strategy? It seems that once a space catches fire, Yahoo scrambles to launch a low-budget copy of the industry leader. The lack of human and financial resources allocated to these initiatives is apparent. In the end, these offerings are bound to fail.
The two examples that immediately come to mind are Yahoo! Mash and Yahoo! FireEagle.
When Yahoo failed in its bid to acquire Facebook, the company realized it had to do something to capitalize on the explosive growth of the sector… and fast. Enter Yahoo! Mash. This afterthought of a product fails on all levels. The interface is ugly and the feature set is weak at best. There is no compelling reason why anyone abandon ship at Facebook or MySpace to join Yahoo! Mash.
Yesterday, Yahoo launched a BETA version of FireEagle. Though I have yet to try the service, I’ve heard mixed reviews. It is being touted as a location-based Twitter. After viewing the front page of the site, I can see why – the look and feel screams of Twitter. Obviously, Yahoo has recognized the potential of micro-blogging and made a decision to enter the space. Is it too late? Does the offering live up to expectations? It is too early to tell, but I instinctively have my doubts.
What we do know is this: there are two ways to enter an industry – build a product/service or acquire a company. It seems that Yahoo has focused on the latter in previous years (i.e. acquisitions of Flickr, del.icious, MyBlogLog). More recently however, the company has transitioned toward a more internal based approach (i.e. development and launch of Yahoo! Mash and Yahoo! FireEagle). Neither strategy seems to be overly successful thus far, although I would tend to favour the acquisition strategy in this case. It will be interesting to see whether Yahoo continues this “lemming” strategy or whether they revert back to acquisition mode.
What do you think of Yahoo’s new approach? Do you think they should stick with it or revert back? In general, how should they go about introducing/launching new products?