New Year Resolution for Yahoo!: Integrate Acquired Companies in 2007

Posted Dec 28, 2006

A month ago, I profiled 44 of the companies that Yahoo! had acquired in the past 10 years and where they are now. Since Google bought YouTube, Yahoo has been questioned about whether they are truly utilizing their newly acquired companies. Now people are even speculating that AOL and Yahoo! should merge. But according to the San Francisco Chronicle, Yahoo! is preparing to start integrating their newly acquired companies.

Yahoo! has been the #1 website in the world for quite some time, but Google, MySpace, and YouTube are catching up at a rapid pace. An internal “peanut butter” memo from a Yahoo! executive pointed out that it is time for a change and that Yahoo! should not focus on a wide range of businesses, but to focus on core competencies.

Earlier this month, Terry Semel, the CEO of Yahoo!, began shuffling executives around and let a few go. Yahoo! hopes that they regain its popularity in a Web 2.0 world. And Yahoo! believes that they have the assets to do so: Flickr,, Jumpcut,, and Bix.

“When we bought them, the first reaction was, ‘Don’t ruin them.’ People thought we were going to put ads all over them. So we didn’t. Now everyone says, ‘You’re not integrating them.’ Despite appearances, we do know what we’re doing,” stated Eckhart Walther, a vice president of product management for Yahoo! Search. “These are killer brands. We’re going to manage them as independent properties. We want to keep those communities happy and healthy.”

After the acquisition, Stewart Butterfield, a co-founder of Flickr, was hired as a product management director stated that post-acquisition Flickr has been rapidly developing new features a lot quicker than some of the other Yahoo! divisions. “We’re trying to deliver a lot of the innovation that can be more challenging at big companies, and comes more naturally to startups,” stated Butterfield.

The author of the “Peanut Butter” memo, Brad Garlinghouse mentioned that “We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.” A couple of companies that Garlinghouse is referring to is Flickr and Yahoo! Photos. Flickr has grown from 400,000 users to 5 million registered. At 41 million users per month, Yahoo! Photos is the most popular photo-sharing website in the world.

The most likely decision for Flickr and Yahoo! Photos is not to kill one off, but let Flickr grow as an independent entity and integrate a taste of Flickr into other Yahoo! divisions just like Yahoo!’s travel website is doing.
What is Yahoo! planning on doing with The integration of into other Yahoo! products was well underway before the “Peanut Butter” memo claims Joshua Schachter, the founder of Yahoo! had already owned a social bookmarking website called MyWeb.

Yahoo! is aiming to have MyWeb technology power and Yahoo! Bookmarks. “MyWeb has different technology that’s superior in a lot of ways,” stated Schachter. “They’re bringing that to We’re following two different kinds of users. It’s difficult and you have to be very careful. Users get very passionate about the tools they use. If you change them and alter them radically, they get upset. We want to only make steps that make sense for everybody.” Schachter also mentioned that Yahoo!’s bureaucracy has not slowed down decisions. “I’ve worked at bigger places,” stated Schachter, who is also a former Morgan Stanley employee.

There you have it. Yahoo! has some big things coming in 2007. Now we know what Yahoo!’s intentions are with and Flickr. I’m sure 2007 will be an even better year for Yahoo!