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Yahoo - money can't buy you love

This week, Yahoo announced that it had bought the blogging platform Tumblr for a whopping US $1.1bn.

This latest deal comes hot on the heels of the announcement in March that Yahoo had paid somewhere between US$30 and $60 million to a UK teenager for a mobile news reader app.

It would seem that in the face of flagging fortunes, Yahoo is trying to buy its way back to success -- a strategy which, I fear, is doomed to failure.

In fact, it would seem that CEO Marissa Mayer is wildly out of touch with the market she is trying to buy.

For a start, several months ago she decided to do away with one of the internet's most powerful tools -- teleworking. I have no doubt that this will have produced something of an exodus within the ranks of Yahoo's best and brightest minds.

Clever folk have plenty of choices in the hi-tech job market and if they don't like the terms and conditions laid down by their employer, they'll just go somewhere else.

What's more, those employee stock options won't be looking nearly as attractive these days and in light of other Yahoo woes, it's quite probably that they'll be worth even less in the months and years to come.

You see, while Yahoo's CEO is busy wheeling and dealing with teenagers who have "trendy" bits of code, she seems to be completely oblivious to the rot that is setting in in other crucial areas of the organisations offerings.

It has taken the company months to try and kill vulnerabilities in its systems that have allowed YahooMail (and XtraMail) accounts to be hijacked by hackers and used to disseminate spam with links to sites carrying malware.

Even now we can't be sure that those holes have been fixed as from time to time there are still small waves of such spam emanating from obviously hijacked accounts.

Then we read this week that Yahoo Japan has been hacked and the IDs of as many as 22 million users have been stolen after someone gained access to their administration system.

Excuse me?

If there's one thing that most Net users fear more than anything else it's ID theft and the resulting (often costly) mess that it creates.

While Meyer is busy adding a new penthouse to the Yahoo empire, the foundations are crumbling many stories below.

What's more, the people Meyer is trying to attract back to Yahoo with these new acquisitions appear to hold these moves in contempt and fear she'll wreck Tumblr in the same way that Posterous was destroyed after its acquisition by the former search giant.

One must also wonder if Yahoo really did its homework on this one since during my research on today's column I encountered comments such as:

"there is a tremendous amount of pornography on tumblr, this may begin to cause Yahoo problems for the corporate image".

"explicit erotica and death punk images and doom metal blogs are not corporate items.. tumblr will fade"

"Some of the most creative people I know are Tumblr acolytes and the cyborg also known as MM ("don't work from home come into the office where we can discuss ideas round the water cooler") is going to wreck it."

So it would appear that Tumblr users and its audience are not at all enamoured of Yahoo's take-over and as we all know, Net users are a fickle bunch. Anyone care to lay bets as to how long it will be before Tumblr becomes little more than an empty shell, festooned with Yahoo's ads and little else?

One can't help but get the feeling that this is an aging giant trying to suck up to a much younger audience buy buying up "the cool stuff". It's a strategy that has seldom worked in the past and is unlikely to work this time.

Yahoo... please get back to your knitting. Fix all the damned holes in your offerings, send your teleworkers back home with a list of critical objectives (innovate, innovate, innovate) and try to create some new markets you can "own".

Hell, you'd think that with $1.1bn to throw around, Yahoo could have done something smarter -- such as run a $100m competition for the most innovative new business idea and then spend the remaining billion on implementing and marketing it. That way, they'd give those involved a sense of ownership and belonging.

Who the hell hired this woman anyway?

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