Remember Yahoo?, that friend you visit when your best pal Google wont load. Well, the tech giant announced that it will be cutting 15 percent of its workforce, and will be closing five of its offices in 2016. The announcement comes after years of decline. You may not be the owner of a multi billion dollar company, but there is a lot to learn about successful business from the Yahoo story.

What made Yahoo so successful?

In 1998, Yahoo averaged 95 million pageviews a day and was the first port of call for internet users. Yahoo’s success story comes down to keen business sense, with the business growing swiftly throughout the 1990s after several well-known acquisitions and the establishment of its web portal. The greatest example of Yahoo’s business intuition comes in the form of a 2005 investment of $1 billion dollars into Chinese startup Alibaba. Its current share in Alibaba is worth $25 billion. Extraordinary, given that Yahoo’s market value is only $33 billion when Asian assets are excluded.

So it ruled the tech world… why is it now declining?

Yahoo has endured its share of failed ventures in the past. The company had to discontinue various services, such as Yahoo! Auctions, its attempt to compete with Ebay, or its Yahoo! Wallet services, an attempt to compete with PayPal. However, these do not appear to impact Yahoo as much as its decision to switch to Google powered searches in 2000. This meant that in 2004 when it decided to drop Google powered searches, Google would become Yahoo’s main rival.

Yahoo once had a targeted business statement, branding itself as an “internet navigational service”. Today however, Yahoo identifies itself as a “digital media company”. With a vague brand, Yahoo has often tried to be everything digitally related. As a result it has struggled to focus on its most successful products: it’s search engine and email service.
So, make sure your business has a clear targeted business image, and it has focus and direction for the services it provides.

What’s next for Yahoo?

This is not Yahoo’s first major layoffs. In 2008, the company cut its workforce by 7 percent when it laid off 1,000 employees. In this instance staff were made redundant, and were invited to apply for future positions within the company. It is expected that Yahoo will offer staff a similar measure of good will.

Yahoo also announced it will be exploring strategic alternatives. Meaning that there is potential that a ‘for sale’ sign will be put up.

If there is anything to learn from Yahoo, it is that your business does not need to do everything, and that you should always value quality over quantity.

Let us know your thoughts on the Yahoo staff layoff by tagging us #lawpath or @lawpath.

Anthony Guerrieri

Anthony is a Paralegal working in our content team, which writes free legal guides aimed at improving public awareness of legal and business issues. Anthony has an interest in simplifying complex legal problems in order to allow people to understand their legal dilemmas.