I worked at Yahoo between 1999 and 2006. I'd say for the first two years we had a pretty much unparalleled opportunity. For the next two years it was probably on the verge of still being able to deliver on that, despite some existential challenges, and then for my last three years there I would say that it started down the long road of utterly losing its way. (Read about Brad Garlinghouse’s Peanut Butter Manifesto for a great commentary on that from 2006)
In this post I write about one of the key mistakes I think we made, because I think it carries lessons which are still very much relevant for today's modern web. Who knows? This may be the start of an exciting new series of posts...
Anyway, for now, this two-part post explains why it was critically important for Yahoo to maintain a single universal login that allowed users to access all of its services and how its failure to maintain this was a mistake. It should hopefully provide some historical context to anyone who is considering the challenges and considerations around managing a single login to allow access to all of your services.
Yahoo was always an advertiser-funded network which primarily sold audience. For that it needed a large and engaged user base.
Alongside having the right content, one means of trying to get effective engagement, as well as building the value of the audience to advertisers, was to encourage those users to register to use features that Yahoo ran within individual products like Sports (e.g. play fantasy football) or Finance (e.g. manage stock portfolios). These in themselves opened up opportunities for premium revenue streams, where users would pay for more advanced functionality within those features. The thinking was the more unregistered users you can get into the top of the funnel, the more of those would convert to registered users, the more of whom would convert to premium users. And of course apart from the funnel growing in size there were various strategies you could adopt to try and improve the rate of conversion between unregistered, registered and premium.
There were also transactional revenues to be made; a percentage on sales generated within commerce products like Shopping, Auctions or Travel. It's fairly evident where having registered users for those kind of products would help Yahoo maximise sales.
And then of course Yahoo already had a whole range of online tools for which registered usage was essential, Yahoo Mail being by far the largest driver of registrations. Of course a product like Mail had its own significant premium revenue opportunities too.
Pretty much every product had a registered user strategy and it was clear that increasing the number of registered users would have a direct positive impact on advertiser, premium and transactional revenues.
Imagine the awesome power and opportunity of being able to access all of those products with just one username and password: Your universal, network wide Yahoo ID!
In part two of this post I'll talk about where this strategy started to go wrong.
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