In the post, What Happened to Yahoo, legendary programmer Paul Graham dives into how Yahoo! fell from grace. I was at Yahoo! around the same time as Paul, we even worked on a few projects together and I agree with much of his post. The availability of easy money allowed Yahoo! to truck along without ever actually defining what it was.

But what Yahoo really needed to be was a technology company, and by trying to be something else, they ended up being something that was neither here nor there. That’s why Yahoo as a company has never had a sharply defined identity.

Yahoo! still doesn’t understand what it is. It’s almost comical how to this day they still try to hedge around actually defining themselves. Even a 100 million dollar ad campaign can do little for them.

Lack of identity meant it was impossible to be strategic

Paul explains Yahoo!’s other mistake was to not take programming seriously. Unlike Google where they are manic about hiring the best Engineers, Yahoo! was content to take on mediocre Engineering talent. As Paul says, the Product Managers were in charge. I of course was one of those annoying Product Managers and while I never felt we had mediocre Engineers I certainly felt the lack of direction all stemming from Yahoo!’s inability to define itself.

I liken corporate strategy to football. Say it’s been a tough game, we’ve played our hearts out and we’re still tied going into halftime.  In the locker room we’re all looking to our coach for direction, for a plan that can ensure us the win. But all too often the senior executives lack a clear actionable plan, they may think they have one (ala Yahoo!) but all it amounts to is, “Play harder and we’ll win”. It can be heart felt and emotional but if there isn’t a strategy it falls flat the minute we retake the field. What we need to hear in the locker room is a plan, “we’re a running team so we’re going to run the ball down their throats until they leave our star receiver open, then we’ll get it to him in the in zone”.

As Paul pointed out, all Yahoo! knew about itself is that it was winning in 1999. When things turned ugly they’re locker room speech came up hollow – I know, I was there. Paul believes Yahoo! might have still saved itself if it had been a home for the best and brightest Engineers. Another way to look at it is to expect the players to come up with their own strategy, for the star player to take it on their shoulders to pull out the win. I don’t disagree but I doubt they could have pulled out the win. Google is a good example, their Engineers have done some great things but they’ve also come up short a few times as of late – Google Wave and the privacy fiasco around Buzz come to mind.Google has a mission – to organize the world’s information and make it universally accessible and useful. The closer their Engineers execute toward that the better, the farther they stray the more questionable the results. Anyone remember Google Lively?

In the end it’s a team sport. If you don’t have a strategy you can hope some star players manage to pull out a hat trick. I for one would rather have the coach come into the locker room at halftime with a plan.