Bureaucracy still kills, especially in Internet time.
Henry Blodget’s characterization, in a nutshell: Google coddles its customers, while Yahoo “is a bureaucratic nightmare.” More here:
In the realm of Internet business, there’s the Internet/technology side (where Google also dominates, oh-by-the-way), and then there’s the business side. Even if it’s going to lose the technology race to Google, there’s no special reason Yahoo couldn’t be doing better with the plain ol’ business stuff.
(Bonus Monday-morning-quarterback sports analogy! Having better technology is like having better athletes, in that it raises the ceiling of what you can accomplish. But even a team with lesser athletes — or a company with lesser technology — can compete if it plays the game smart. Yahoo needs to play smarter.)
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