en-us http://www.keithwatanabe.net/index.php Keith Watanabe's Website http://www.keithwatanabe.net/blogs/2007/8/3/b7722ec0043a3046d20086f35f863842.html
With regards to social networking, I think Yahoo is wasting time and money investing in this area. The area is too competitive and overfilled with sites that add little value between each other, except in terms of minor differences or a specialty focus. But the numbers provided on the article from TechCrunch are hard to rationalize and force a major company like Yahoo to really put this kind of effort into a social networking company.

Naturally, Yahoo needs to re-think what their identity truly is. Before they "were the internet." However, now, they are an amorphous mass with little add value per service except for major acquisitions which may share their user base and infrastructure. Perhaps, this is where Yahoo may serve a real purpose: infrastructure. If they are the internet, their business plan might be in large scale infrastructure support.

And what I mean by infrastructure support should not just be hardware and networks, but the APIs, redundancy, experience and capital to allow start ups to stay competitive. Like a company that provides the tools to build companies. They have their developers network, which is a nice start. But they need to provide more. Here is a suggestion to Yahoo to refocus their business strategy in terms of specific services they can provide to improve their image:

- Allow the use of an Open ID type of scenario. Yahoo has a plethora of registered users. Making the Yahoo email address as the central point for smaller companies to manage their infrastructure would reduce the need for companies to develop authentication systems. Add value services on top of this would be options to increase security (SSL certificates, image verification, authorization schemas)
- An improved ad supported system that is flexible. Be less restrictive and improve the model. The bidding method was a great way to make money. But the quality of ads and the ability for people to control the types of ads on their websites require improvement.
- Provide the hardware, network redundancy, clustering and diverse hosting options. For instance, allow one to use Apache, PHP, mod_perl, Ruby on Rails, Tomcat, JBoss, IIS that is pre-setup and multiple permutations depending on the need of the company.
- Increase the number web services to allow companies to create new mashups. Maps, weather, stock quotes, news items, etc. are great starts. However, these must be increased and diversified to provide developers greater flexibility and companies to emerge and generate creative businesses to propel the internet into web 3.0.
- Begin contributing to major open source APIs to improve stability in development. Apache, PHP, mod_perl, etc. should be key investments that Yahoo enters rather than attempting to continuously build competing development tools. The reduction of languages and APIs and the improvement in the stability and functionality within these APIs using Yahoo's monstrous infrastructure as the testing ground should be a key focus for the company.
- Provide legal consulting services for start up companies. Perhaps a true service would be to create an automated legal consulting service that takes out the middle man and provides questionaires (a la TurboTax) to provide companies ways to generate their own businesses without being forced into hiring their own lawyer.
- Provide automated venture capital to allow people to quickly get their ideas up and running without the hassle of the normally bureaucratic and competitive area of going to VCs or banks in getting money. For example, start a program where a person wants to generate a new service and gets anywhere between $50-$1000 per month automatically after going through an online questionaire that determines in the end how much a person can receive. Other internal services like advertisement, shopping carts, etc. would be provided as part of the services to help redirect some of the money back into Yahoo in a guaranteed way. Naturally, an idea like this is high risk, but Yahoo's coffers are deep and buying people left and right without a strategy is no different in some ways than what I'm proposing above (except to the anal retentive symantics freaks).

Part of what I'm suggesting above is just standardizing some of the areas that I see many companies rebuilding over and over. Yahoo probably has some of the best practices nailed down so providing these best practices as a form of business would be better than forcing each company to reinvent the wheel time and time again. Also, it'll lock down how things are down better and allow businesses to truly focus on the core problem of making money through the internet.

If you go over the timeline for Yahoo, you can see a pattern emerging:

- Yahoo 1.0 - directory service
- Yahoo 1.5 - massive portal
- Yahoo 2.0 - massive copy cat, with no sense of identity
- Yahoo 3.0 - confused and directionless

Forget the economics of keeping this line of business or getting rid of these other lines of business. A company should have a real vision and sense of culture. Without this, no one can really go up to that company and understand what that company does. Yahoo's identity is so twisted because they attempt to do too much for everyone. But their purpose is twisted as well: do everything because they think they can do it better? Do everything because it really helps society? Do everything because they just want to increase their money?

I can't fathom how Yahoo can increase their traffic anymore than they realistically have. This is something Yahoo doesn't really need to improve their business model. Instead, Yahoo needs to utilize what they have and provide it to people. The main assets of Yahoo are their experience, infrastructure, reach, traffic, and variety of services collected into numerous lines of business.

Yahoo 3.0 should not be confused and directionless. Yahoo 3.0 as I present it needs to be the Internet platform. It has to go back to Yahoo 1.0 where the focus was on providing services to allow other people to show up since no service was around at the time to collect this information. And it'll come full circle by being not just a directory of services, but a pure information service provider, linking in the nodes of experience to the next generation of developers and businesses.

This ought to be Yahoo 3.0.

Forget social networking. It's just a phase of the internet.

The bigger picture has always been information and services.]]> Fri, 03 Aug 2007 22:29:55 -0600 http://www.keithwatanabe.net/blogs/2007/8/3/b7722ec0043a3046d20086f35f863842.html http://www.keithwatanabe.net/blogs/2007/10/23/8ee4819787a54152788eb948b74654c3.html
Even if Yahoo shut down 360, they need to stay away from companies like Facebook. Certainly, as Facebook slowly overtakes Myspace, what is clear to me is that these services are transient. Once a large company takes over, they practically cease innovation and focus more on integrating their services as opposed to running as an independent service. This is a huge strategic mistake in my opinion. Of course, specific integration tasks such as sharing infrastructure and key information are important. However, these companies shouldn't focus on those elements alone as it seems to me. Instead, these companies need to push their services as if they ran the company independently and continue to push the brand of their service.

Yahoo has been terrible in this regard. I've seen them attempt to brand some of their acquired services, but many still don't even make it to the front page. How can companies attempt to utilize the Yahoo brand name, unless Yahoo is able to market their acquired services properly?

Anyway, this said I hope Yahoo continues to go through their portfolio and slice out their redundant services. Also, I hope they utilize their information rather than generate more subsites that provide little add value functionality. And I hope that they stop acquiring for the sake of just investor appeasement. Focus internally and make us something better, stop being redundant.]]> Tue, 23 Oct 2007 20:26:02 -0600 http://www.keithwatanabe.net/blogs/2007/10/23/8ee4819787a54152788eb948b74654c3.html http://www.keithwatanabe.net/blogs/2008/1/2/2a85ded9a6471b256aef75886510d7f8.html You can't talk about Google without talking about Yahoo in some way. I think MSN should be made irrelevant as it is truly a 3rd rate copy of copies. But the big question should be how these two behemoths focus their energies for this year?

While Google looks mobile bound, Yahoo might be moving towards social. I really hate looking at these two companies in these terms because I think these terms are passe. I think there is another picture to look at, something bigger than just mobile and social (while these two are big, to me, it's just marketing's current buzz).

I think Google needs to become something like the engine of the internet. I guess you could call it the Web OS. It will form the basis of all internet related aspects. APIs, links to websites, data relation, etc. In other words, Google will become more of the foundation for how the internet runs. You have all of their open APIs like Base, Maps, Ads, Android, even OpenSocial to a degree.

Yahoo should focus on becoming The content provider/creator. If I were to refocus Yahoo, it would be to first get rid of all the useless things that it bought or things that doesn't do it any real good. For instance, I'd kill Yahoo's search. Just let Google power it. I don't see any difference anyway (which is a huge problem in my book).

Next I'd kill Yahoo's notion of it being a portal. A portal for what? What a stupid term that got a lot of companies in trouble for forcing people to try to do everything, but doing everything in a sloppy, disorganized, unfocused, and low quality manner. Yahoo shouldn't even have a "front" page anymore. They should get people to move towards "My Yahoo" or something more useful. Help people build their own page. I'm not talking about another shitty "let's share my stupid page with my friends" type of deal. I'm talking about going through their troves of content and letting users filter out all of their crap which makes their front page so confusing.

Yahoo should then focus on purely content APIs. News, weather, movies, music, TV, etc. Content, content, content, content. Let Yahoo be this middle man of content, a content distributor and even creator. Google will then find ways of mining it. It's a nice symbiotic relationship that they could build.

Also, Yahoo should be a front end service. If Yahoo is to be a content provider/creator, it must also figure out how to make such services presentable. In other words, make them look nice, make it easy for people to create more services, make it easy to access and figure out what's available for them. If you go to Yahoo's homepage, you'll see a bunch of junk floating around. You got some news items, a ton of confusing ads, this horrible sidebar in which my eye hardly glances, and a TINY search bar. Oh not to mention that stupid appearing menu for my email that enlarges and shrinks the page in annoying ways. What the hell is this? Yahoo is trying to push a ton of garbage onto me without figuring out what I want at first. It's almost like going to a generic buffet in Vegas. Going along the analogy of buffets, Google is more like the Wynn buffet, where you have smaller quantities of food, but the stuff is done well. On the other hand, Yahoo would be the Main Street of buffets, where you get tons of choices, but the preparation is done in a mediocre manner.

If I were re-designing Yahoo's pages, I would start with a blank page and just ask questions about what a user wants and slowly build up a page with all the content available for them. I suggest anyone with some authority at Yahoo to read my rant about Linux on the desktop. Yahoo needs a similar strategy. While Yahoo has the marketshare due to their long reign, I can easily imagine them losing it or at least pieces of it slowly to competitors who simply have more focused capabilities and better marketing.

Along those lines I'd also make Yahoo a single point of sign on for the internet. There should be some trusted crossover between Google and Yahoo to allow people to reutilize their email addresses as the same login between platforms. If that happens, then they should also get rid of the stupid page that forces people to re-login everytime and put everything into some framed version so that people don't have to go between various pages and have all their main applications and links centralized from a logical point.

Finally, Yahoo needs to return partly to their roots on what made them successful: a directory. While Yahoo as a pure directory is impossible because of the sheer number of services out there, Yahoo needs to re-invent itself in terms of marketing its applications in the form of a directory structure. Or something that bears resemblance to a directory to make sense of the hundreds of things within Yahoo. Having that sad little strip on the left side just doesn't cut it and I'm certain more services could potentially see the light of day if people weren't obstinate and realized how horrible of a front page that they have.

Google and mobile/wireless are combos people are going to start murmuring about since, well, it's Google trying to get in. While it'll be interesting to see their plans if they can get the bid, I'm more afraid of them failing in getting it. Probably if they make the bid, they'll open it up for everyone. I don't think that would be a great business decision. The infrastructure cost in that would be insane. But let's say that they don't get the duke. My alternative plan is for them to buyout AOL, kill dialup, improve LAN connectivity through installing fiber in major cities and lowering rates and selling that. Personally, I'd love to see that happen more than Google getting the wireless bid. I mean, it just makes more sense from a business perspective. The customers are already known, all you're doing is just upgrading lines, you destroy that evil faction of sales that AOL has, you get rid of the old dialups, move everyone to IPv6 so everyone will have a static IP and you can give the cable monopoly a real run for their money (i'm not sure if Time Warner still has a part in AOL, probably do so that'll make this deal even sweeter). Not to mention you'll make M$ shit in their pants because you end up controlling the other side of infrastructure.n The other major thing is that Google will finally have a new form of business to earn continuous revenue from. It will be a natural fit and a good way for the internet to finally evolve.

Yahoo should NOT make a purchase or investment in Facebook. I just think the whole SNS is passe. Yahoo should focus on improving what they have rather than continuously broaden themselves out. Let some other company like M$ make the mistake of investing in a piece of junk like Facebook. Have you seen Myspace recently? It still sucks even with the interface change! People just migrated over to Facebook! So is Murdoch's $650 million still worth it?

Both of these companies need to realize what they have and make better utilization of their resources. I think Google has a lot of momentum and brilliance while Yahoo has the legacy. But both simply lack focus to improve on what they have.

Anyway, if anyone wants to hire me as a strategist for either company, go to my profile page here and contact me through my linkedin account or facebook account.]]> Wed, 02 Jan 2008 02:22:15 -0700 http://www.keithwatanabe.net/blogs/2008/1/2/2a85ded9a6471b256aef75886510d7f8.html http://www.keithwatanabe.net/blogs/2008/1/23/de266f21ab45758d7f9cf41c59167724.html
Since returning, I read two major things that Jerry Yang had performed on behalf of Yahoo: 1) deal with the whole China escapade and 2) announcing the layoff of numerous Yahoo-ers.

I'm certain that neither decision is appealing at all for many of the people within Yahoo. I read that most engineers are going to be retained while a lot of other people (read: middle management) will scramble about to latch onto some project or team before getting The Note.

Of course, Semel did a lot of damage to Yahoo, attempting to convert it into a pure media company whereas the foundation was oriented towards tech. When Google overtook Yahoo in various areas, Yahoo was left in the dirt of various bad moves, especially in terms of PR. Now, the focus is on engineering. Why? It sounds like they're attempting to follow Google in letting the engineers once again lead the company. I don't have a problem with this; I have a problem of Yahoo trying to follow Google rather than focus on a separate path or improve upon their core competencies.

While Yang sat on the board, I feel that he probably was away from the day-to-day activities, instead enjoying life as one of the richest and most influential people in the world. I noticed that he contributes to the Republican party as well, which shows some of his psychological paths. But I think he's gotten complacent and being away from the day-to-day activities and enjoying a large amount of wealth, removed a lot of his hunger and ambition to drive Yahoo.

Let's face it: Yang's position in Yahoo came from the fact that he helped found it and created some of the technologies along with Dave Filo. Can he still steer the helm? Or is he just going to live off of stock?

My feeling is that Yahoo really ought to have promoted someone within the company to CEO. I don't think Jerry Yang was the best candidate and with the layoff announcement, there'll probably be a lot of backlash against him and what he represents. Also, probably the only reason why they ended up bringing him back was that internally Yahoo was politically messed up and that no one really trusted anyone else to lead the company. They really need to groom someone else who had been handling the day-to-day operations of the company and had the vision, passion and hunger to improve Yahoo (raises his hand!).

While I'm certain that there'll be some cool new stuff coming from Yahoo, it won't be earth shattering and I don't think any of the true innovation done will be caused by Yang himself. Let's see what the upcoming months hold for Yahoo. But I'm not holding my breath.]]> Wed, 23 Jan 2008 09:27:23 -0700 http://www.keithwatanabe.net/blogs/2008/1/23/de266f21ab45758d7f9cf41c59167724.html http://www.keithwatanabe.net/blogs/2008/2/1/f1033a369b039e1b3c14415bab3bed4b.html
On second thought, the idea horrifies me.

It horrifies me, not in the thought that M$ and Yahoo would be this mega corporation. But it horrifies that it's really a dumb idea. For both companies.

Both companies see Google as The Enemy. This is erroneous thinking and a myth that's become perpetuated horribly in Silicon Valley that people have been utterly brainwashed by the hype.

Google is simply a company with a lot of innovation, a vision of how it wants to shape the future, and it's uncompromising nature to make good on that vision. Yahoo, M$, Ballmer, and a lot of other people see it as simply a territorial war in ad space. Ads are the only thing that fuel Google and it's probably why Ballmer wants to strike them in that area. Honestly, there's absolutely zero reason for M$ to get into that market in the first place because they dominate in so many other markets.

But when I look at M$ after Bill Gates stepped down, I realized that they took an incredible misstep in promoting Ballmer to the position of CEO. Ballmer, for all intents and purposes, is indeed the stereotypical Pointy-Haired-Boss from Dilbert. Heck, I'm certain Scott Adams must've got his inspiration from some where :p Ballmer was an operations guy, someone who knew how to streamline the internal business. But as far as a leader in technology, Ballmer lacks vision, except tunnel vision. One slashdotter aptly put it that Ballmer's myopic quest to end Google is probably going to end up killing whatever dignity M$ has left.

The combination of Yahoo and M$ would be horrible for the industry. People predict that the acquisition would make the combined companies stronger in terms of a rival for Google. Instead, the truth is that the acquisition would end up killing both companies while Google sits back and watches the flames spurn from the distance.

I believe that the acquisition would cause more irrevocable harm to both companies because it'll simply bloat M$ up even further than it is. Think about the internal politics, the restructuring, the name calling when it comes to using which product. Both companies have incredibly strong personalities and senses of identity. So a merger would just rip into the fabric of time and space.

And it'll make both companies even less agile in this market.

Google's internal culture promotes agility as much as a company of that size can. In Ballmer's obsessed state, I think he'll go mad micromanaging what stays and goes in the Yahoo brand. Why would there even be a Yahoo brand after the acquisition? Everything would be re-branded and slowly migrated to a decaying Vista platform. Then the services would grow slow, less open, and charged. In the meantime, companies like Facebook and Google will continue to open up their services and give out the crack called open source and APIs to hungry developers that will consume up such gifts while M$ begs old customers to stay on their aging platform.

This is the reality of what will happen if this acquisition goes through.

Now, to Mr. Jerry Yang.

My advice to you is this. Your shareholders are important, but money isn't everything. M$'s deal is their own poison and they don't even realize it. All the work you've striven to accomplish with the Yahoo brand will slowly fade. And honestly, do you really need more money?

Move away from the deal. If you take it, you will be one of the most despised men in the industry. All your loyal Yahoo employees will migrate away to companies like Google, Facebook (if they haven't already) in disgust at your selling them out. The Yahoo must remain independent to allow for people to choose. Terry Semel did a lot of damage in a similar manner that Ballmer is doing to M$. But if you want to correct the damage that Semel did, you must allow the Yahoo identity to remain, give the customers what they want and show guts and vision in this period. Yes, Yahoo isn't doing well financially as expected, but many companies will face a similar crunch in the coming quarters. That's how the market is just going to react from the greed of the housing market. The buyout is nothing more than a short term snort of cocaine for your investors, but in the end they'll lose and you'll lose.

Don't sell Yahoo to M$. It's a bad deal.

Besides, if you do sell to M$, Google will simply buy Sun and merge with Apple. Then what are you going to do?]]> Fri, 01 Feb 2008 10:25:18 -0700 http://www.keithwatanabe.net/blogs/2008/2/1/f1033a369b039e1b3c14415bab3bed4b.html http://www.keithwatanabe.net/blogs/2008/2/4/0fd6ac98f50d9094f34f6ad5cd2596f4.html
I feel it's like being on a battle field where you're seeing all the lines of allies and enemies being drawn up. Or maybe it's closer to who's going to pull the trigger first.

I've already stated that I firmly believe that Yahoo should remain independent as M$'s move would simply hurt themselves and the industry. I think Yahoo themselves both internally and key members of management feel the same way. Not to mention that there was an interesting reaction where Yahoo mentioned increasing their relationship with Google. I'm hoping that people aren't just looking at the sheets, but all the different angles of what this buy out means. It's not that easy and I continue to believe that hostile marketing by companies like M$ have been bestowing negative imagery upon Yahoo.

While I do believe Yahoo hasn't done so well for itself, you cannot deny the power that they hold. It's just that people hold huge expectations for them. The truth is that right now, economics in the world have not been doing well. It's just a simple casualty of the fall out from the subprime loan situation in America.

If you just take these three players, the thing is that you have to make them realize what their relationship to each other is. Google is becoming the OS/engine of the web. Yahoo is the media and supplier of information in the web. And M$ is a steering way or maybe a window to the web.

These three companies should respect each other on these grounds. If I were the government and forced to intervene on these warring parties, I would have them make an agreement to how their businesses are divided.

Regardless of what's going on, I have to admit that this is one of the most interesting times to be part of this industry. Glad, I'm working in it and for it.
]]> Mon, 04 Feb 2008 10:30:46 -0700 http://www.keithwatanabe.net/blogs/2008/2/4/0fd6ac98f50d9094f34f6ad5cd2596f4.html http://www.keithwatanabe.net/blogs/2008/2/4/001c4b1ebaa65176fae393eba52a6351.html

• Buy Sun out. Sun bought Mysql out and practically are a great hardware distributor. Spin Sun's hardware business off as an independent company, and as a primary distributor to Google. Take over all patents for Java and release them as pure Open Source. Re-do the whole N-1 grid programming project and combine Google's OS with Sun's Unix in creating a distributed, grid programming platform, completely supported by Google. Cater to start ups and midsized companies by eliminating the need for DBAs, system administrators and production support groups by providing round the clock service for all areas of support. Kill Sun's SunOne Identity management system in favor of OpenID as a de facto standard for the industry's constant id management system crisis.
• Merge or partner in a closer relation to Apple. Force Apple to lower the cost of desktop systems, get rid of Safari, and only provide Firefox as the true browser of choice.
• Buy Facebook already. Orkut is useless so get rid of it. Also, OpenSocial sucks because it's too limited. Give that kid his money already and put someone with experience in charge.
• Buy the Mozilla corporation out. Come on. We know you want them.
• Create a new business for web businesses. A complete investment model. Think of it as building a new town. You have the land, the wood, the construction trucks. But you have no dependent businesses to make the town a city. To initially attract the people to your city, you give them what you need. In return, your citizens pay tax to help the city to prosper.

This is my vision for Google. Want to hire me as a strategist yet?????]]> Mon, 04 Feb 2008 10:43:37 -0700 http://www.keithwatanabe.net/blogs/2008/2/4/001c4b1ebaa65176fae393eba52a6351.html http://www.keithwatanabe.net/blogs/2008/2/9/6a7c0e83310d0523b497ce3f2940c9d5.html
I've stated it before that the whole deal is just nasty. I'm certain many on the inside of Yahoo and other companies certainly fear, detest and want to avoid this deal at all cost. However, because this involves purely money, shareholders, being the sheep that they are, probably are thinking of the short term value that they can from such a deal. Some are calling this move from M$ a hostile takeover, since it's basically a bribe to Yahoo's shareholders in order to lay claims to the company. And of course, I'm just against the idea completely.

Some writers, like Arlington from TechCrunch, feel otherwise in terms of turning around the company. While I'm not certain if Jerry Yang is the person that can do this enormous job after the damage Terry Semel caused the company, I do think that Yahoo has to plan for the long term. I think writers like Arlington are "stuck in the valley" and don't view things from a global perspective, nor from a wider perspective. He did write up a better analysis of the theoretical acquisition which would cause the company to bloat and reduce near term action. But his position still is in this mystical long term view of the value of Yahoo.

To me, big mergers just don't work out and there are many cases in history to demonstrate where these incompatibilities disrupted and destroyed the foundations of some good companies. My coworker and I discussed this issue and pointed out how companies like AOL-TimeWarner really fell apart, and that now AOL is just losing money. Or think about the HP-Compaq merger done by Carly. It simply hindered the old engineering corporate culture that HP was famous for by adapting the HR practices put forth by Compaq. Or in Japan, look at the disaster that came out from the whole Mizuho banking merger of three major banks. It did position Mizuho higher than many other companies, but they went through their own disasters initially when they rushed the roll out of their combined ATM systems.

I think acquisitions work far better on a smaller scale. Certainly, M$ is indeed larger than Yahoo. Look at the market cap, the amount of money in the bank, their annual gross and the number of employees they have. But Yahoo is still a large, powerful company with a strong culture and sense of identity. This isn't a situation where you have M$ buying out a limited player like Facebook, or ebay purchasing StumbleUpon. This is clearly a threat and everyone in the industry, minus those shareholders, know it.

I've emphasized what Yahoo needs to do to succeed. Becoming community oriented, opening up their data APIs for developers, becoming a company to act as a technological venture company for young businesses and re-utilizing their infrastructure so that existing businesses don't have to re-invent scalability and reliability each time. These are Yahoo's strengths but they have yet to monetize them in a sensible way. Becoming a WebOS/creative platform for people to build the next generation of internet properties are what these giants should leverage their technology for. And it makes a lot of sense to me.

For instance, I was talking to my friend who works at my previous company. They have a VERY poor (global) support model. The local infrastructure particularly is setup incredibly poor that there's no good ways to handle things like VPN, mass software installation, server maintenance, etc. The chief problem is that the company had piss poor people who are of the lowest caliber. A company like this who wants to have the killer applications running efficiently and doing seamless deployments is someone who would make a great candidate for a company like Yahoo to host their applications. DBAs, System administrators, network support people, security administrators, etc. are practically a dime a dozen. Getting solid versions of these types to build up a killer infrastructure are rare compared to the number of these out there. But truthfully, the types of infrastructure that most companies want are not too dissimilar. They want the three tiered architecture, the app servers, the web servers, etc. Most companies spend needless amounts and probably would be better off spending their money on pure development, since development requires a high degree of creativity that implements the business ideas (whereas support are not really related as closely by comparison).

So having Yahoo handle the infrastructure setup right down to the deployment methodology would solve a lot of companies' IT problems. You wouldn't need to perform due diligence against a shady consulting company claiming that they can handle some top down solution, especially if their track record is hidden from view. You'd also avoid getting those so-called "shadow IT" departments where business people end up setting up their own infrastructure because the core IT team is either too restrictive, too backlogged or just too dumb and lazy to give the business what it wants.

With a Yahoo, imagine what you'd get. A trustworthy name containing all the solutions a business needs. You'd have your email, your single sign on, your chat, your APIs, your 24/7 up servers, your global support, the raw network speed, etc. It makes perfect sense.

Jerry Yang, this is my gift to you. My view of what Yahoo should focus on. Call it Yahoo Enterprise Business.]]> Sat, 09 Feb 2008 11:09:46 -0700 http://www.keithwatanabe.net/blogs/2008/2/9/6a7c0e83310d0523b497ce3f2940c9d5.html http://www.keithwatanabe.net/blogs/2008/2/9/5ff7691a596840ed7ad265af06d8c08d.html
My feeling about this deal is that it's a personal agenda item from Steve Ballmer. It's been well documented on Ballmer's personal attacks against Google and his desire to put an end to them. It's kinda strange because I don't think a lot of businesses are quickly converting over to Google in terms of their office software. A lot of companies still employee and will probably continue to employee M$ Office just for compatibility in sharing documents between other businesses. I mean, Open Office probably does a better job than Google's Apps for handling M$ Office compatibility issues. And by the time Google can rival M$ on these areas, M$ just has to create further incompatibilities. In other words, M$ will continue to make a boatload of money from their desktop products and can mutually survive with Google in the playing field.

So why would M$ fear Google?

I don't think that M$ honestly fears Google at all. I think the reason for this mess is that Steve Ballmer is fearing for his position as CEO of M$.

M$ in the past few years has been for the most part a joke. Some items on my list to ridicule M$ on are:

• Vista. Bloated, people are asking for XP. Not a good sign.
• XBox. At one time, M$ was losing money for each XBox produced. Other companies are excelling in the game industry and M$ isn't the only one in the field.
• Zune. iPod holds the better product and M$ was just far too late to get into this playing field.
• MSN. It just sucks. Face it.
• Live/Spaces. M$ doesn't understand the web and never will.
• Ads. Google owns with Yahoo being the closest second.
• Firefox catching up in terms of market share compared with MSIE. IE is a terrible product and is a cause for many viruses on the web with its insecurities.
• Security. M$ has the worst record for security.

And so on. M$ has just an awful track record in the past few years. And who's at the helm?

Steve Ballmer

What does that say? While Google made headway as the fastest and largest growing software company around (and it's funny calling them a software company), M$ has been nothing but the biggest butt of jokes. Steve Ballmer hasn't done a thing to take M$ ahead of the game because he's just a pointy haired boss. He's not a visionary like Gates, he never was a tech guy. He's just an operations fellow who managed to move up because of his past relationship with Paul and Bill.

With such a list of failures, I'm certain numerous people within the company and shareholders alike are calling for Ballmer's head in the near term future, kinda like how people wanted to impeach George Bush for his failures. Well, their product line ups have failed in not being able to copy as successfully as their competitors. And bullying is no longer an option at this point because they lack the market share in the internet compared with Yahoo and Google. So their last resort in M$'s typical business tactics is to buy.

If the deal went through, Ballmer might initially look like a star. He'd have his place in M$ history as being the guy who had slain the ancient dominant dragon of Yahoo sitting on a mound of global shares of wealth and connections. He would get his 2-3 year extension as CEO and probably receive renumeration in shares from the deal with Yahoo, making him one of the most powerful CEOs around.

It's purely ego driven.

What it isn't is solid business sense.

This is the deal that will honestly kill M$ in the long term. I think Ballmer will promise Yahoo and M$'s shareholders of being able to reorganize and turnaround both companies in being able to compete in the market place against Google. Initially, shareholders thrilled at hearing news will become emotional, not really seeing that this ploy is simply a tactic to buy time for Ballmer's lack of vision. Heads will roll at both companies, more likely Yahoo's than M$'s. Products will be deactivated or slashed out of existence. Fights will occur between teams. There might even be a stupid notion of trying to migrate the entire Yahoo platform onto Windows. That would definitely destroy everything Yahoo has built. Look at Hotmail when they tried to migrate it to NT. How can either company do anything productive while organizational battles go on to survive within both companies? How can innovation thrive in a big re-organization?

Look at the HP-Compaq merger. It took them about 3 years before things came about. In the meantime, other players like Gateway/Emachines and Dell surged. The HP-Compaq merger offended a lot of veteran HP employees. Certainly, the policies between Yahoo and M$ would differ enough to cause cultural clashes between both companies.

But I think that the market in the internet is far more competitive and more agile than the PC hardware market. Applications can be built faster and better than selling a PC at lower cost. In the internet market, you have to blast out applications at a rapid pace and innovate where your competitors are not focusing their strengths. Google has a culture of the 20% rule. With the threat of M$-Yahoo, this rule might be the key for Google's survival.

And probably some of the most valuable employees that Yahoo will lose are their engineering team. I can easily see engineers leaving by the dozens while Google offers them a safe haven. You gotta think about how an engineer inside Yahoo might react. I'm certain many Yahoo engineers love Linux, love open source and hate Windows. The very thought of having to use a restricted proprietary system would make them want to leave. And I'm certain many of these people are highly motivated and extremely bright, wanting to get their chance at their own 20% rule that probably was killed off when Terry Semel took hold of the reigns in Yahoo.

Either way, this deal only has one benefactor: Ballmer. But he's not going to be the star he believes he's making himself into. He's going to be another Carly, and at the end of the day, he's going to have a miserable farewell and will be ridiculed as a visionless, do-little CEO.
]]> Sat, 09 Feb 2008 11:40:23 -0700 http://www.keithwatanabe.net/blogs/2008/2/9/5ff7691a596840ed7ad265af06d8c08d.html http://www.keithwatanabe.net/blogs/2008/2/21/c12cf6afb863830230ec09c720d414dc.html
"It involves breakthrough engineering. We think that the combination with Yahoo would accelerate things in a very exciting way, because they do have great engineers, they have done a lot of great work. So, if you combine their work and our work, the speed at which you can innovate and get things done is just dramatically more rapid. So, it's really about the people there that want to join in and create a better search, better portal for a very broad set of customers. That's the vision that's behind saying, hey, wouldn't this be a great combination."

The importance of this quote stresses how Bill Gates is attempting to soothe in Yahoo's engineers a notoriously weak point about engineers: their ego. While I'm certain that the shareholders couldn't care less about this issue one way or another, the key for Microsoft to purchase Yahoo is through assuaging the internal strife from people who have zero desire to work for Microsoft. This is very biblical on some levels as it's basically asking Christians to take a bite of the Apple in the Garden of Eden as Satan tempts Adam. And certainly, many Yahoo people probably own a fair amount of stock within the company, so a buyout simply means that these people would be able to make more money. On the surface, it seems like a win-win deal.

I won't go further about what makes this deal bad, as I had already covered this issue several times. I do want to say that Bill Gates' reply to Yahoo's current stance is brilliant and is the tactic I would've taken and even suggested Google's lawyers in reprimanding Microsoft's push for the web space. By complimenting what essential was an enemy for a good decade, Bill Gates is doing exactly what he did with IBM and Apple during the 80's. He's simply partnering up with them and getting them to believe its in their best interest.

Watch Pirates of Silicon Valley to show the quote from the Steve Ballmer character in how he praised Bill Gates in handling Steve Jobs when they were stealing the ideas from the Mac to make Windows. This is simply classic Bill Gates. He knows that Ballmer can't execute the deal and that the only one that can handle it is Bill Gates. You don't have to like the man, but you have to admire his business savvy.]]> Thu, 21 Feb 2008 06:49:57 -0700 http://www.keithwatanabe.net/blogs/2008/2/21/c12cf6afb863830230ec09c720d414dc.html http://www.keithwatanabe.net/blogs/2008/2/21/c083b7cfa7302c0ef531b372234970c3.html
These comparisons probably are what the industry should look at. It's 1984 all over again. Once again, we have a major giant in online search and advertising in the form of Google, giving little choice as Microsoft is painting. Jobs made a similar infamous speech playing the Ridley Scott directed Macintosh commercial. Everyone is eying Google as being like IBM back then. This time there are some changes in the roles, but I see similar outcomes. Here, Google is IBM. Microsoft's Gates and Ballmer are playing Steve Jobs giving a speech to the tech industry. Yahoo is Apple with their portal, branding, and search as being the only chance of survival for the rest of the industry. But Microsoft again is lurking in the background, waiting to pounce on the unsuspecting industry. They've done it once, and they can do it again.

We all are very familiar with the history that Microsoft and Apple had created after that. It was like George W Bush coming into power, after Clinton freed the nation from the GOP. But for some reason, people believed that we needed a war and that war cost the US its reputation, its dignity, its internal economy, the freedom of its people and turned the rest of the world into a hostile environment rather than a progressive one.

Yahoo and Google (along with open source software and the web) essentially have freed us from reign of closed systems, of limiting people's career potentials and of geographic boundaries. By uniting Microsoft and Yahoo, we would be returning to those days of being enslaved, kinda like the downtrodden masses in the 1984 Macintosh video. I don't think we want to return to that space again.]]> Thu, 21 Feb 2008 07:06:30 -0700 http://www.keithwatanabe.net/blogs/2008/2/21/c083b7cfa7302c0ef531b372234970c3.html http://www.keithwatanabe.net/blogs/2008/3/5/105549fffa33c4dfaf4b5a1148b1815d.html
Honestly, I think this partnership also makes sense. I need to go back and do my research on the numbers, but last time I checked (and I admit it was a while back), AOL still had a good amount of dial up users. Yahoo has their own ISP offerings so this would nicely compliment what AOL has. Yahoo could easily move users slowly towards their broadband offerings (hopefully decreasing the price to make it seem more appealing than using Cable modems).

The other thing is that AOL has some good content that would compliment nicely with Yahoo's properties. For instance, their video section and merging chat together. There's a lot of redundant overlap that Yahoo does better and integrating the platforms (namely the user base) would hopefully end this redundancy.

Also, this move would help improve Yahoo's image somewhat. Many had at one time considered Yahoo as "The Internet." However, that face slowly got eroded with Google's move into the market. Still, Yahoo dominates a good portion of the market in terms of traffic. Having people using them as an ISP simply reinforces this idea, which recently, seems to have been weakened with the increasingly dominated Google.

Where does Yahoo stand? I think that the whole M$ deal would make sense only to shareholders in the short term. It's actually very bad business in the long term and would hurt the market. Unfortunately, with the market souring overall, shareholders seem to want their returns immediately. I'm hoping that companies like Google and maybe Time Warner can do some equity swap, convert the voting capabilities of those "bad" shareholders and help get Yahoo back on track.]]> Wed, 05 Mar 2008 17:45:09 -0700 http://www.keithwatanabe.net/blogs/2008/3/5/105549fffa33c4dfaf4b5a1148b1815d.html http://www.keithwatanabe.net/blogs/2008/3/8/29f9dff1168b0564e1ae4ac6e9660719.html

• Lock down of engineers. Remember the embittered battle between M$, Google and Kai-Fu Lee? All engineers would face similar non-compete clauses upon the transition. Obviously, Google would be a safe haven, but it's doubtful that they could fully employ all engineers initially.
• Lack of support for non-IE browsers. Considering Yahoo's global reach, the impact of revoking support for non-IE browsers would be a tremendous blow to the internet market, especially browsers like Firefox, Safari and Opera. Don't think they'll do it? Just check out their new 3-D image technology which forces people to upgrade to Vista and the latest version just to view! It's not a coincidence people.
• Absorption of numerous user accounts. M$ has long wanted to create a standardized portal for user information management. Remember the failure called Passport? Getting Yahoo's tremendous registered user base would take them one step closer to that reality.
• Intellectual property absorption. All that information that Yahoo has collected over the years and given away for free would be owned by M$ in nefarious manners. While people criticize Yahoo for not monetizing their properties, it's almost a lock that the absorption of Yahoo into the M$ fold would imply that slowly they'd determine a method to get a return on investment for each Yahoo property. In other words, all that hard work you've done uploading photos, creating social networks, etc. would more than likely be charged in the future. The only reason for the moment while M$ gives away things for free is that they don't have the reach that collectively all these competitors have. But grabbing Yahoo brings them closer and quicker to that goal.
  
• Absorption of all the partnerships that Yahoo has. I think one of the internet's strengths, especially companies like Yahoo, is that it provides smaller players the chance to succeed by utilizing these services. Moving Yahoo into M$ means that M$ can now control these services and do whatever they want like increasing fees. In the case of APIs where other sites might employ the various web services provided by Yahoo, M$ would be able to shut them out or force them to sign new contracts and monetize those services (not a bad idea in reality, but M$ is not the player I'd want to be handling this)

A skunk is still a skunk. I think people are only looking at the dollar signs and failures of Yahoo recently rather than examining the big picture. M$ will continue to play a zero sum game when it comes to business for as long as they exist. And here it will not be any different.]]> Sat, 08 Mar 2008 08:43:21 -0700 http://www.keithwatanabe.net/blogs/2008/3/8/29f9dff1168b0564e1ae4ac6e9660719.html http://www.keithwatanabe.net/blogs/2008/3/16/421e724bf4afaa8f5999e0f6a273a492.html TechCrunch has a post about Flickr doing video. I recently did a small report for my company and tracked some of the latest online video sites. The number came out to be roughly 24-25 sites where people could upload content. This was out of about 100 sites that I reviewed online. Now, Flickr wants to enter a dense game.

Certainly, Flickr can use their brand name and their user base along with some spiffy technology to add another dimension to their brand name. However, this is the key point where I have a huge problem with Yahoo. Yahoo already possesses a few video properties including Yahoo Live, Video and some of their partnerships to broadcast video via the Yahoo name.

Adding video to Flickr seems to come into conflict with these ideas!

There was a letter sent out a while back regarding the numerous redundant properties that Yahoo has. When Yahoo terminated Photos, I thought it was a great thing because they could utilize the better product of Flickr and eliminate brand conflicts (even though I ended up just ditching both entirely and moving to shareapic). Now, we might be seeing another situation where there's no brand unification, no vision of how to leverage the Yahoo brand with Flickr and vice versa.

It seems, according to the post, that there might be an intent to differentiate it from YouTube. Well, they have to certainly do more than differentiate itself from YouTube, but Yahoo's own Live and Video as well as the other 100 sites or so that have some form of video related content!

If Flickr intends to move in this direction of adding video related content, my hope/advice to them is that they do not attempt to cross paths in the viral video space. YouTube dominates and there are numerous other sites which already has the traffic and content available. Video editing might be the way to go, but I would advise Yahoo to allow Flickr to be able to access content from their existing online video to create more of a themed cohesion between brands. Call it "Yahoo Media" to not confuse users and to unify the products together.]]> Sun, 16 Mar 2008 09:51:21 -0600 http://www.keithwatanabe.net/blogs/2008/3/16/421e724bf4afaa8f5999e0f6a273a492.html http://www.keithwatanabe.net/blogs/2008/4/30/77c9d600918848d85b5d174c52f2383c.html Yahoo in agreeing to this deal: as part of the agreement, Steve Ballmer must step down as CEO of Microsoft and only receive non-voting shares of the new combined companies.

I think this is a perfectly legitimate counteroffer on top of the monetary proposal by Microsoft.

While Steve Ballmer has been in charge (supposedly), his visionless leadership has caused massive failures for the company. Let's face it: he's just a Pointy Haired Boss. And the butt of many jokes I might add. Ray Ozzie, for all intents and purposes, is the current driving force behind Microsoft's strategies. I figured that the vestiges of the old guard of Microsoft is what's causing the distance in Yahoo's acceptance of the bid. Most notably Ballmer's tactics and personality as head most likely prejudices people's viewpoints of Microsoft. I mean, Bill Gates has long passed the torch along to others and it's clear in that passing, no one has been really able to step up to the plate outside of Ozzie.

If you take away Steve Ballmer's arrogant demeanor from the acquisition and re-proposal it to Yahoo, their board and most importantly, their employees, what would the reaction be this time? It seems like in the upcoming acquisition, Microsoft is perfectly willing to open up its deep coffers to bribe Yahoo, its employees, and shareholders in everything that's possible to make this deal (and again, I argue that the one making this deal is Ballmer). It's not such a bad proposition, but I think the biggest stigma are the negative connotations associated with what Microsoft has been spewing.

But again, I figure also most of the negativity is associated with the Google-killer obsessed Ballmer, who has made the whole thing a personal issue (because again I suspect his neck is on the line). Well, if Microsoft is truly sincere in moving forward with this deal, the best option outside of pure money is to take away the only real cause of emotional disturbance.

And for those who still believe that this deal is good outside of the immediate monetary benefit for the shareholders, here's a nice video that clearly explains what will happen during the merger.]]> Wed, 30 Apr 2008 11:22:49 -0600 http://www.keithwatanabe.net/blogs/2008/4/30/77c9d600918848d85b5d174c52f2383c.html http://www.keithwatanabe.net/blogs/2008/4/30/24dcb135b13a6aee7663adcf3d1a455c.html Yahoo with regards to their strategy of openness. I like basic concept because it's what I've been saying for years that Yahoo needs (needed) to do. Of course with the pending Microsoft deal, it's hard to say whether or not this strategy will have legs, but let's ignore that possibility for now and focus on this current core strategy.

In Techcrunch's article, it's mentioned that:

Yahoo wants to turn itself into one big social network-driven site, and simultaneously open many of its core services to get users and developers thinking of Yahoo as their Internet hub.

I think Yahoo should avoid utilizing the buzzword "social network" at all cost. It's passe and screams to me of lost revenue. They had long lost the grounds on this to other competitors, most notably Facebook and Myspace. The whole "let's share" and "add as friend" thing are just fancy groupware motifs re-packaged for investors. And Yahoo doesn't need investors at this point (well, they need a missile to hit Seattle for their sake, but that's a different story). However, opening their core services is the start of where they should be going (and probably if they pushed it about 4-5 years ago, they could've had a huge leg up Facebook and Google).

The other part in the Techcrunch article that's good to point out is this quote:

There are three components to the additional news announced today - platformization, opening services, and portability.

These ares are definitely the direction they want to move in. Unfortunately, Google has already done these things whereas Yahoo is in the proposal stage and this screams of "they just copied Google!" I do like the fact that Yahoo is focusing on PHP (actually SecurePHP) as it will help a PHP guru like myself actually be able to get started quicker than say with Google (and again make someone like me more apt to use Yahoo than Google). They call their engine YAP (Yahoo Application Platform).

It seems the chief purpose in this is primarily for user retainership. Not sure if that should be the chief purpose, but it's what they want.

Now, let me show you a counter strategy to Google's based on my limited view of what Google is doing with things like Google Apps Engine, etc.

Originally, I was saying that Yahoo needed to become an infrastructure platform for businesses, kinda like what you're seeing Amazon's EC2, Google Apps Engine, Sun's N2, etc. The problem is that the majority of businesses trying to use the internet as a platform just have bad practices. Too many outages, the high cost of setting, maintaining and improving that infrastructure to scale and (here's the key point for myself) simply re-inventing the wheel each time. Companies that do provide this level of scale can eventually monetize that knowledge through re-selling their platforms. As a side effect, you get to reduce your IT department size, since you no longer have to worry about dealing with a data center and can hopefully focus on business development by outsourcing the infrastructure component to a competent entity that utilizes best practices.

That's the start of the future for Yahoo. But there's more....

I view Yahoo's future strategy as inverting their existing system.

Right now, as users, we land on their homepage and utilize only certain aspects. A lot of the crud that goes on their homepage is unnecessary cruft whose value and mileage varies on a per-user basis. And a lot of the current stuff seems like legacy portal content. In opening up Yahoo, they need to reverse that aspect and expose all that content for developers like myself.

They've partly accomplished this through some feeds. But we need more as I have been saying. I think Yahoo needs to leverage the numerous partnerships with whomever they're getting their content from and allowing people to access that content without fear of repercussion from a lawsuit. Imagine if someone wants to develop a music application. That person could utilize Yahoo's service and create something without getting sued by the RIAA. That's a move that Google clearly has not implemented (yet). We need to be able to access deep, specialized levels of information and reutilize existing things on Yahoo. Imagine for instance, a developer/homepage creator being able to take images, audio and video from Yahoo to create a fanpage for their favorite artist. If a developer can host such an application on Yahoo but legally be able to utilize such resources without fear of a lawsuit because of some legal clause Yahoo can provide as part of their service offering, that means Yahoo services can potentially be revenue, socially and technologically driving. I see this as a positive pro-active stance on what so many companies shy away from.

I mean people talk about Mashups all the time, which to me are nothing more than something like a DJ splicing together bits and pieces to create a mix. But for this to work there needs to be something protecting people so that these services can truly flourish. Can Yahoo be the key to provide this type of service for developers? Perhaps cut a revenue sharing deal with those artists, studios, producers, and content producers to allow developers to do such things.

Another part, and I think this is a key piece to Yahoo's long term survival (without Microsoft) is empowering the users on the ad front. The big problem I have with ads is that people who want to use them are powerless to the randomness of context based algorithms. Certainly what Overture/GoTo.com originally did was innovating and helped create an industry of its own. But the fuel for those days is depleted and they must find a new source. My major complaint about context ads simply is this: they suck. I never feel like there's enough control and that web programmers are forced into some stupid SEO madness that really has no ROI, except for those who have high traffic. It's always just been up to the webmasters to manage this. Of course, the argument for this area is that people simply don't have time to manage these things (it's almost like managing being a day trader). But at the same time the automation algorithms used to analyze one's site sucks and it's mostly what seems to be pure chance and high traffic where one can earn money for this.

But in the end, people just aren't clicking on ads and people instead are turning to other solutions (some which are nefarious) to handle this aspect. Which in the end implies that the solutions provided by Yahoo Search Marketing, Google AdWords, Microsoft AdCenter only can survive because of the size of these companies, not by the quality of the ad service provided. Thus for me at least, control and the ad quality are what Yahoo need to improve upon. If they can open up these services and allow developers to better tune ads to their advantage rather than relying on Yahoo's algorithms, there's a better chance for Yahoo to excel in this aspect.

Opening search is a must. Google shot themselves in the foot by killing their old web service and forcing everyone to move towards their branded AJAX search. I know what Google was thinking, but it was a bad long term move. It is true that I use Google as my primary search engine, which naturally makes me inclined to prefer Google as the number one candidate if I would want to write some search function. However, closing search and limiting it to a branded AJAX search just sucks. Yahoo easily can compete here by providing unlimited queries with an XML response. I don't think the results returned are going to be that much different in quality either these days.

And here's some radical but (Google) killer ideas for Yahoo in terms of being innovative:

They need to not impose any limits on queries returned from their results. I think Google's use as an Apps Engine is limited simply because they impose limits. Some of Yahoo's services, like search, already does this. Amazon has limits too but they're smart enough to understand how to monetize their services for the enterprise (which to me means of the three, they'll survive in the long term). Still some of their services are limited like Amazon's Web Service function has a limit of 1 second per query per IP address. For a site that intends to be high volume one day, this imposes a huge restriction on being able to do things like threading queries, this is an impractical limit. It's like what I said about Google's DB only being able to return 1000 results at a time: the most serious application you can write in truth is a local pizza ecommerce site.

Here's where Yahoo can easily differentiate themselves again from the competition by removing such limitations on their services. If Yahoo could provide the equivalent of Amazon's Web Service search for their content without the limited query response, I'd switch in a second. The natural goal for any website is to scale up; so if the bottleneck becomes these services' limitations, then developers will end up being forced to shop around for someone who offers a better version. And that's a great place where Yahoo or some major content providing company can enter.

Finally, and here's the most radical idea that I think companies like Yahoo, Google and Microsoft need to move towards in attracting us developers is that they need to become something like VC funds. I'm certain that many developers like myself dream of the day that our little service will one day get bought out by Yahoo, Google, Microsoft, AOL, etc.. I've known people personally who had this happen.

What has been killing someone like myself is simply that I can't focused all my energy on my own stuff. I've got to take a day job and can only put in 4-10 hours maximum a week on my own projects. And even those hours are not guaranteed.

I'd love to see someone like Yahoo or Google just toss money at me to develop the next killer application. And there's no doubt in my mind that others feel the same way. This would be crazy as the flood of applications would be unlimited and you'd be creating a huge hot zone for an even faster push on the technology side. This would be like a renaissance of computing (things are already happening like this but a lot of what we get is crap). But given the potential of services provided by Yahoo, the openness of their feeds and usage of infrastructure, etc. the quality level might be a lot higher.

There are some catches to my idea, but as with everything, there's a method to my madness. And there's a nice way for Yahoo to monetize this nutiness:

• The venture money would come in tiers. So it all depends on the ambitiousness of the project. It might range from $50 for a silly localized pizza site, to $1500 seed money per week/month all the way up to $60,000 for a one year contract on a project. I'm certain Yahoo already does something like this internally where budgeting for projects get proposed and then later killed. This probably is a far cheaper solution.
• There would be a review process on applications based on the scale of the project. People who want the highest ($60k) tiered project must receive a review of their site/business plan with their business development groups. This helps potential businesses work with people who specialize in growing businesses.
• Periodic code reviews with internal Yahoo developers will go on consistently.
• Now, here's where Yahoo gets the money back: depending on the success of the site, Yahoo would get an automatic level of ownership of the business/application, revenue sharing, etc. guaranteeing that they would get a return on their investment. Again, it's a VC fund so Yahoo essentially gets first dibs.

The thing is that this is a new form of ecommerce, risk taken to the extreme. There's too many punk kids like myself who just don't want to deal with the ego slamming of venture capitalists (in my case because we've seen how typical VCs operate and simply because most of us don't have an MBA). But you gotta ask yourself (that is YOU Yahoo!) did Steve Jobs, Bill Gates, Paul Allen, Larry Ellison, Steve Wosniack, Sergie Brin, Larry Page, and even your own David Filo and Jerry Yang have MBAs when they formed some of the most powerful companies around? No, they just had dreams like myself. A lot of it was talent and there certainly was tons of luck involved in all of that. Now, as a fellow tech dreamer, I want the same and many of my friends do too. But we're all scared of leaving our day jobs in doing something crazy. Still we want it. And we need guarantees.
The thing is that this type of thinking is socially changing. It's social engineering at its best. It's the thing that's needed by Yahoo to inject into it's public image as being friendly and appealing to the common man. Think of the benefits:

• A monstrous new playing field of applications and technology that will driven by the sheer competition.
• Switching the landscape of venture capital.
• Practically guaranteeing the success and expedient adaptation of Yahoo's services.
• A definite win on both sides in terms of ROI; Yahoo gets money and control back for their services; punk kids like myself don't have to go to an office every day and might make it big.
• The creation of new industries as a result.
• The continual elevation of importance of developers within Yahoo.
• Providing best practices to the industry at large.

This is real innovation at its best. I mean, why should Yahoo spend several hundred millions of dollars in acquisitions when they can pay independent developers a few thousand a month to do this? The money translates to the same thing so rather than on focusing on an existing acquisition strategy with and unforeseen return on investment, you're getting immediate control for what people want and helping to mold it.

I see this strategy as being a monstrous success for the sustainable growth of Yahoo. It's my analogy of selling cigarettes/marajuana to minors; gradually, you upgrade them to crack and heroin. But the difference is that the heroin is socially beneficial.

So Yahoo, make THIS happen. This is the real vision for what you want. This is partly what you're doing through your overpriced acquisitions. This is what poor starving developers (rather than poets as the proverb goes) like myself want. This is what the industry needs. And most importantly, this is SOCIAL.....SOCIALLY CHANGING.]]> Wed, 30 Apr 2008 13:08:28 -0600 http://www.keithwatanabe.net/blogs/2008/4/30/24dcb135b13a6aee7663adcf3d1a455c.html http://www.keithwatanabe.net/blogs/2008/5/5/e29254d4cd89247185bc7211f50a006c.html
First, obviously there's going to be some nasty shareholder backlash. Well, I think Yahoo's stock will trickle down but those who sell off their shares aren't true investors in my book (and my book is more on the Warren Buffet/Benjamin Graham side). Probably the worst thing that will happen initially is a series of lawsuits against the company. I doubt that these lawsuits will permanently cripple the company, but the next few months Yahoo (in America) will be severely hurting from the inside (and hopefully, Yahoo can buy back shares from those disloyal shareholders and have people like myself figure that it's going to be a GREAT buy once Yahoo's stock tanks).

Jerry Yang is going to have a lot of pressure on his head. More than that though, people are going to probably call for his head. However, I don't think he'll step down and the company (and shareholders) should at the very least give him a 2-3 year trial period for which he and the others at Yahoo can repair the company. So hopefully rather than going golfing with his Republican buddies, he'll concentrate on the technical side in terms of creating a vision for his company. But personally I see it as a few billion dollars of disillusion too late.

Next, we turn to Microsoft. Honestly, I think it was better for Microsoft to call off the deal. This was one of the better moves they've made recently. No joke. The whole thing was a damn poker game and Microsoft folded this round. But they'll be back.

One of the things mentioned in the memos from Steve Ballmer to the troops was increasing competition in social, advertisement, search and web cloud computing spaces. My opinion has been that Microsoft is trying to fill a void that has long been filled by people who better understand what the web is about. Microsoft has been trying to catch up by either buying or copying what exist, but their tag has been branded as being poor in the web space. Also, they just don't get social and probably never will (when have engineers/geeks really understood what social means anyway!?!?!?!!!!?!?). Trying to compete in those areas is really a bad form of investment for them as the social and advertisement areas have limited lifespans (the only people who seem to NOT believe in this are investors; guess we should continue to hide the truth from them!!!!)

Microsoft is really better off spending money in areas where there's hardly any competition or innovation. Like internet appliances, robotics, space exploration and biotech. No stupid kid off the street can build an internet appliance that easily. It takes large amounts of resources, a real engineering background and the facilities to do such a thing. Someone who just knows a little bit of PHP won't be able to do this. However, university electrical/computer engineering students with a good deal of training can, in my belief, pull this type of stuff off. And it'll take a company with a lot of money to be able to fund such an operation.

That said, Steve Ballmer too will have to face some sort of consequence by backing up his words. I don't think he's really the person to be able to pull off helping Microsoft regain their former glory. You need a visionary and someone hungry. Ballmer made a huge mistake in my estimate in this whole situation; he made a business situation personal by making his hatred for Google public. Mistake number one. It's the same mistake that WCW made back in the day when they were trying to put WWE out of business. But look what happened; things backfired, WWE purchased WCW and WCW is just a page in history with the WWE's fingerprints re-writing the tales. My interpretation of Microsoft is that you need to go back to the game of appealing to geeks and do geeky things. That's the driving force behind the culture of Microsoft, so get back to technology and innovation (but asking Microsoft to innovate is like asking Hillary Clinton to provide concrete examples on "her" energy plan). In short, Ballmer has to go as the CEO. Let him play the pointy haired Operations Manager guy, but he can't be the face of Microsoft any longer. Microsoft needs a technical visionary who understands what society needs from technology.

Then there's Google in the corner just watching these companies duke it out. Hey, they've always been the clear winners in this. As long as Google maintains an agile company culture with the ability to adapt and innovate in environments, they will clearly stay several steps ahead of whatever behemoth monstrosity would come out of Microhoo.

Despite all this, it boils back down to Yahoo and what will go on from here. There was a lot of promises put on the table with deals with Google, the Open Platform as being their savior, the purchase of AOL, etc. But what will the reality be?

The Open Platform is a cool idea, but there is no concrete examples of what developers can do. More importantly, I fail to see how Yahoo can monetize these efforts. Amazon has been smart all along by asking for (relatively reasonable) payments for utilizing their services. Yahoo wants to open their service up. So either they have a few choices here:

• Monetize their platform a la Amazon, putting a charge per usage or some hosting plan.
• Purely absorb the initial cost of their services by providing unlimited queries and exposing more of their data and services, thus driving a huge stake against Google's platform (which is limited) and making Amazon's service less valuable on paper. Also, this will allow quick adoption of these services compared with Google.
  
• Do what I proposed before in absorbing the cost of rights for copyrighted material in giving developers and content developers the ability to use their platform without the horrible royalty charges from groups like the music industry, movie industry, etc.
• Go after enterprise level customers to helping them to migrate their existing infrastructure onto Yahoo, thereby getting Yahoo to help them implement best practices and assured 100% uptime (or something close to that level)
• Providing the incubation service for businesses as I mentioned (my personal favorite and something I think that would be a killer idea for Yahoo).

The Google deal obviously was a time buying trick, which would serve in both of their interest until Yahoo could somehow heal itself up a bit. Obviously, it was done to fend off Microsoft from both their backs (in other words, your enemy is my enemy too). However, the deal reeked so much of desperation that it sounds more like shooting themselves in the foot. Might as well have Google just buyout or merge with Yahoo at that point. Either way, I think all three of their ad services suck and that they simply need to improve how to cater to the individual viewer to finally get real click throughs and actions with their advertisement platforms.

Purchasing AOL is something someone should do to put the AOL brandname out of its misery, move the poor subscribers away from dial up, install high speed internet access, but manage it through a stronger, centralized access point. It makes sense for Yahoo or Google to do at this stage. It'll help boost Yahoo's revenue a little bit and give them more business on that line up, but they need to improve the infrastructure for paid AOL subscribers fast. I mean, thanks AOL for helping to get people onto the net, but you're days of usefulness have LONG left.

Overall, I don't really expect much to happen. It's going to be exciting for a few days watching Yahoo get nailed, more news pour through, and people play fantasy booker. Truthfully though, I think this is a big nothing because the follow ups won't be fantastic, everything is going to be underdelivered and overpromised and nothing in the industry will really change in a good manner (unless they follow my advice since I'm always right about things like this :p). But I have to admit that it was a lot of fun, got me excited and motivated me to write a few thought provoking articles. However, experience has taught me that a lot of this is over-the-top hype, with some short term invested interest, and really not doing anything for the industry at large in a positive manner. Thanks for the memories. Hope to see you all again soon.]]> Mon, 05 May 2008 06:53:08 -0600 http://www.keithwatanabe.net/blogs/2008/5/5/e29254d4cd89247185bc7211f50a006c.html http://www.keithwatanabe.net/blogs/2008/5/5/c754305e6ffcfeca02acfb884f5faf7d.html
At this moment, I think that only the most conniving investors would end up suing Yahoo. But at the same time I think Yahoo should make a move to re-purchase their shares to prevent another move like this from happening for a while. Maybe Mr. Yang can dip into his deep pockets and grab back his shares too so he can regain at least some control over his company.

In my viewpoint, the chaos is great for investment. Low stock price at a highly valued company means great return later. Just use investors' sheep mentality against them to win in a situation like this.]]> Mon, 05 May 2008 09:21:44 -0600 http://www.keithwatanabe.net/blogs/2008/5/5/c754305e6ffcfeca02acfb884f5faf7d.html http://www.keithwatanabe.net/blogs/2008/5/6/238d6793d46a1382b23017b544e053b3.html
The market is also reacting funny. Today, Yahoo's shares climbed back by $1.24 (not done yet), which either means that the saving face speeches are a way to keep the stock somewhat steady or that people are looking at Yahoo as a cheap buy.

Now, the best part is reading the commentaries from various message boards on what Yahoo's stock ought to be. Well, last time I checked, this wasn't Wheel of Fortune. Come on big money! People seemingly randomly assigning value figures from an ethereal part of their body just is wrong to the real investor. I bet these are the same people that cannot stop withdrawing cash at an ATM in a Las Vegas casino once they get on a losing streak.

Forget all this speculation on what the stock price ought to be. You gotta go back to the fundamentals whether or not Microsoft buys Yahoo out. Is Yahoo making a profit? How much debt do they have? What is the total market cap? How is their revenue doing?

When you see reactionary, irrational actions in the market, you have to take a step back and look at the overall picture. In Yahoo's case, the only thing is that they've just lost some traction to Google and Microsoft offered to partly bail them out in creating a large industrial monopoly. That's reality. You have to ask is the move the best option for the market? People seem to only look at the current reality and hype, rather than digging deeper into the situation. Reminds me of Spiderman where the Green Goblin tells him that people like to see heroes fall. I guess he was right because Yahoo has always been good to most of us. They've made some bad decisions, but haven't had enough of a chance to recover. Things like this take time.

The other thing is that as I've been saying, a lot of people seem to have hidden agendas in all of this. I think investors' have overt hidden agendas of simply trying to cash out as soon as possible, especially in this downtrodden market. And I think the naysayers are simply bored and want something to keep them excited. To me, neither really helps the overall situation.

Regardless, I think we need to re-assess the issue in 6 months. It's too early to really tell if Yahoo's position is indeed weakened by not taking Microsoft's offer. As part of the buy-and-hold type of philosophy, I'm someone who likes to wait and see how things turn out. You can't just constantly react and speculate. But you can use history to see whether or not you're repeating your mistakes. We don't know if Yahoo's position was a mistake so I say sit back, relax and watch the show.]]> Tue, 06 May 2008 12:07:45 -0600 http://www.keithwatanabe.net/blogs/2008/5/6/238d6793d46a1382b23017b544e053b3.html http://www.keithwatanabe.net/blogs/2008/6/19/4686a0b4b3306c520b4a0029cb684f5a.html
Now as part of the fallout we're seeing Yahoo's executives leaving in the troves for higher ground. I'm going to be in the minority in saying that this is a great thing.

There's a comment over at Techcrunch which says "Is this the end of Yahoo as we know it?" Well, the Yahoo as we know it isn't functioning very well. It hasn't been performing in years to the degree that we want. Well, while I do support the idea of Yahoo remaining independent, it is true that the people running the show must be either held accountable or receive the ax. Or just leave.

But more than that, you gotta see two great benefits out of this: 1) it allows younger, more energetic people to step up to the plate potentially and take those coveted spots; 2) those executives were part of the reasons why Yahoo wasn't able to maintain a higher competitive position.

People see Yahoo as the sinking Titanic. I see it as a phoenix about to be reborn. It's like the movie Spiderman where you had the Green Goblin telling Spiderman how people enjoy seeing heroes fall. Yahoo has been our hero for a long time and there's a lot of people that are jumping off the bandwagon just because of some wrong moves.

Probably, Yahoo needed this house cleaning and wake up call internally and externally. When you reach the level of dominance and market penetration as Yahoo, you attempt to figure out the next level. They've missed numerous chances to pick up key companies like Google or Facebook. But the truth is that probably in the overall scheme of things that wasn't such a bad thing (except for short term betting shareholders).

What Yahoo needs from this is to start promoting internally and/or get some external visionaries to take Yahoo to the next level. They need to re-invent themselves, not allow themselves to whore themselves out to their shareholders who have enslaved them. I've proposed several ideas about how Yahoo can achieve this (i.e. becoming a media platform for 3rd party developers and hosting service).

The other thing is that the people on top need to (in some way) shut themselves out from all the main criticism and simply figure out for themselves what they want to do with Yahoo. Forget the money thing. They already have a great position in the market but just need to determine what Yahoo means as a business. I honestly don't believe it's as complicated as people are making things to be. But until they stop being pussies and allow themselves in being bullied around by shareholders and venomous critics, they aren't going to repair their image for a while.]]> Thu, 19 Jun 2008 18:11:26 -0600 http://www.keithwatanabe.net/blogs/2008/6/19/4686a0b4b3306c520b4a0029cb684f5a.html http://www.keithwatanabe.net/blogs/2008/6/22/b9824fa5af094d779237b27531136518.html
Probably, we need to start with the deal on M$ and Yahoo that never went through. For a few months, I remember reading more than one site discussing the possible buyout of Yahoo by MSN. I believe even I suggested something like that with the threat of Google looming in the background. Despite the actual move, I never actually thought MSN would make the move so soon, but that move had triggered a chain of events that are historical and political in nature.

The natural reason for the buyout from M$'s point of view was to thwart Google. Steve Ballmer has been notorious for his outburst, directing his rage against Google. Rather than utilizing the situation as a real business opportunity, Steve Ballmer turned this situation into what seemed (to me at least) like a personal crusade to bury Google and Eric Schmidt in particular.

Ballmer ought to watch the Godfather (kinda like Bill Gates' character in Pirates of Silicon Valley) in emulating Vito Corleone in never showing his true intentions and feelings. If anything his outburst aided in the perception that M$ was purely going to do this deal to hurt Google, much in the same way Sonny Corleone would tip off Solozzo "the Turk" in being interested in Solozzo's drug deal, something Vito Corleone wanted no part of.

My interpretation of Ballmer's choice of Yahoo in particular was to get that final feather in his cap he desperately needs in his tenure as a CEO. Thus far, Ballmer's reign as CEO has been plagued by highly publicized disasters. The XBox money losing fiasco, Vista's lack of acceptance by the public, M$'s failure to capitalize on new grounds on the internet market (particularly social networking), the massive loss of ground of the server side to Linux, and Google's slow but imminent penetration in the enterprise through their free apps. Thus far, we have yet to see M$ come out on top as they had conquered the 80's and early to mid 90's.

The deal in itself is nothing new to M$. In fact, M$'s typical business practices historically have been to buy or copy, never innovate. In relation to the internet, M$ has no clue. Without monopolistic practices like bundling Internet Explorer with the operating system, M$ would have a difficult time catching up to some of the mega internet crazes such as social networking, blogging and open APIs. With Yahoo having a huge percentage of the internet in their pocket due to their longevity and brand name recognition, Yahoo would fit nicely in M$'s scheme of things.

That aside, another well known fact about M$ is their anti-competitive practices. For some reason, it seems that many of the internet writers had suddenly favored the deal, rather than remembering M$'s infamous past cases of monopolistic practices (and I for one believe that these writers probably had some stock in either M$ or Yahoo). Still, many of us remember the pre-internet days where we were enslaved to the M$ OS. With M$ potentially acquiring Yahoo, the outcome would be a monstrous capitalization on the internet ad market, something that M$ wants dearly as everyone knows for a fact how Google uses that market as their primary course of survival.

Fortunately, for whatever reason, M$/Ballmer did not go through in the end. Of course, Jerry Yang and other Yahoo executives had staved off the invasion temporarily through attempting to raise the price (although Yang himself doesn't really need the money), provide excellent severance packages for their employees and just delaying. Threats of proxy fights would be imminent as would shareholder lawsuits. But truthfully, there is far more at stake than money on the table.

From there until now, Yahoo itself would go through a new barrage of assaults. Although Yahoo and Google would ink a deal (which I will discuss hereafter), that would not halt the acid rain coming from the murky clouds of disgruntled employees and the wrath of their shareholders. The shareholders, in their infinite myopic perception, only care about immediate return, especially in this downturn economy. In some ways, Yang and company are now finding out the hard way why having a public company isn't always about just making money from stock options and that those years of loyalty were non-existent and that these people were waiting just for a moment like this to cash in their checks.

Worse yet, Yahoo, kinda like a whore spreading her legs and awaiting an infection, would receive a truly menacing threat from Carl Icahn when he would purchase up a good number of their shares on the market. I can't say anything good about this guy. I don't even know if he understands the implication of what he's doing in his proxy fight. But it's obvious how some investors had managed to manipulate him into going into this fight as a cause.

Then you have the mass exodus leaving Yahoo. As I mentioned the other day, this doesn't necessary imply a bad thing. But I'll get on to that later.

But let's step back to my previous point about the Google-Yahoo deal. I think this latest and known development is pretty blatant and really is where you have to read carefully between the lines. The deal in a nutshell is Google giving Yahoo some bribery money to appease their shareholders. It's not the level of money that the shareholders want, but it's meant to prevent them from bitching too much. It's also a (begrudging) thank you to Yahoo for helping them out before, back when they were starting out. Most importantly, it's a way to keep Yahoo in Google's pocket (which is the irony of ironies) and for M$ to stay away.

Now, one may ask, "Is that really such a great thing? Isn't that collusion?" YUP!!! It's collusion kinda like George Bush and Cheney getting hidden handshakes from the oil companies in supporting their campaigns while the administration goes through great lengths in protecting these industries. Well, if that's the case, why isn't that considered monopolistic or why would I slam M$ for only doing what Google ended up getting?

It's simple. From my point of view, I really don't fear and mind Google as much as other people. Do I trust them? No, I don't trust anyone (for that matter). But I know for a fact based on history, based on Ballmer's rants against Google, that the deal was basically the lesser of two evils. The main thing is to continue allowing a company like Yahoo to remain independent.

At this point, both Yahoo and Google are propping up a lot of smaller companies through their ad networks. Eliminating one or both would stifle competition potentially. Back in the day when I was attending UC Irvine, the "in-thing" (prior to the IPO dot com craze of the late 90's) was the MBA guys hooking up with the computer science undergraduates, building an application and hoping to get the company sold to M$ so that the founders could make out like bandits. These days, we have a lot more players that can provide that assistance in the form of eBay, Google, Yahoo, Amazon (though not as a common), etc. Eliminating those companies would mean that a more limited selection of companies and people could make it, rather than having an increasing number of competitors on the market. Just common business sense for anyone who isn't a shareholder of M$ or Yahoo.

The other thing is that when I look at Sergie Brin and Larry Page, I don't perceive the same obsessed nuttiness of Ballmer nor the domineering, business savvy of Bill Gates. I see two guys who are very smart scientists/engineers working with someone who has a good sense of business in Eric Schmidt. Maybe 10 years from now, that might all change, but seeing their interviews and such, I just don't get the same vibe as I do with Ballmer. And that to me means a lot in this episode.

Circling back to Yahoo, I have to say that when I saw the so-called mass exodus of executives or managers, I thought it was a great thing. I believe the count of people leaving was somewhere in the neighborhood of 140. Well, if you read/worship Dilbert like I do, you'll realize that having that many executives is probably what's killing the company in the first place. Sometimes, you'll get these mid-level managers who attach themselves to companies like parasites until the rum runs out. It looks like the rum is running dry at Yahoo quite quickly. But again, I feel this is a great thing because potentially, younger, hungrier people can move up the chain faster.

The other thing is that you have to realize 140 executives/managers means that you had that many more competing viewpoints to deal with. Now, with 140 less people, you can try focusing the business more. Forget trying to hire from the outside (unless it's me). Go internal and get some of those kids who are itching to climb the ladder faster and move them into more strategic positions. If anything, those people are the ones that ought to be able to re-vitalize Yahoo. You don't want to insult the employees' intelligence by hiring more external help (except me) when you have all the talent within the organization. I'm certain there's more than one person who has the energy and vision to help drive a component or two in the company back to success.

Then you have Jerry Yang and the remaining top people. Let me advise something to Yang: maybe let the people below do the driving. In situations like these, you really need someone like a Steve Jobs to rally the troops. You need visionaries who understand what people and/or need. I don't know if Yang has that vision nor passion. I think when you make as much money as someone like him at his age, it's easy to become complacent. Rather than being on the streets, hungry, yearning for that first taste of success, you're hanging out with celebrities and living a glamorous life. You need to be street to execute something like this because it's the common person that's going to be using these things.

I already know where Yahoo ought to be taking itself. I know where M$ should go too. And I leave Google alone because they've got enough vision and talent to do without me. Nonetheless, this whole year is going to continue to be interesting. Good thing for me I'm back with the net!]]> Sun, 22 Jun 2008 11:50:14 -0600 http://www.keithwatanabe.net/blogs/2008/6/22/b9824fa5af094d779237b27531136518.html http://www.keithwatanabe.net/blogs/2008/6/25/8e2e3444eb720318c1c6a732b675db0a.html
While the author mentioned that the library might be released as a YUI widget, it's the original source code that makes it useful.

I don't know how useful a widget might be. Take Google search results for instance. You have to employ their sucky AJAX library to get the results you want. I prefer to have the raw data. Yahoo actually did a good job in allowing developers to retrieve XML data feeds from their search.

However, we're seeing the shoe on the other foot. Come on Yahoo! Yahoo Pipes is visually interesting for developers but it isn't that special. WireIt.js is one of the more useful Javascript libraries out there for doing data flows and potentially other visual applications that require connecting elements together.

Well, then again that's why all those people are leaving at Yahoo, right Mr. Yang? ;)]]> Wed, 25 Jun 2008 21:48:12 -0600 http://www.keithwatanabe.net/blogs/2008/6/25/8e2e3444eb720318c1c6a732b675db0a.html