Yahoo’s New Social Media Aspects - Will it Payoff?
Wednesday, December 17th, 2008Yahoo has announced that it will be rolling out its new social media features.
With the additions announced Monday, Yahoo’s roughly 275 million e-mail users will have the option of setting up their accounts so they can highlight communications from other people with whom they have formed an online connection.
The concept mirrors a premise that has turned privately held Facebook and News Corp.’s MySpace into two of the web’s hot spots for socializing over the past three years—a period that has coincided with a wrenching downturn at Yahoo.
Yahoo also is copying Facebook and MySpace by opening its e-mail service to applications created by outside programmers. In a test that started Monday among a small number of e-mail users, Yahoo began offering applications developed for finding photos stored in their mailboxes, transferring information to blogs, and sharing tips about movies.
The changes will turn Yahoo’s e-mail service into a “scrapbook for your life,” said John Kremer, a company vice-president. “We hope opening up Yahoo mail will have a game-changing influence on the industry.”
Yahoo has declined from a leader to a follower in the online services space. They have been beaten by competitors, most notably Google, in almost all areas of their business.
It is still too early to say whether or not this new feature will pay off for shareholders. But as discussed in our post on Social Media Sites - Should I Build or Rent? there are a few criteria which one can use to determine the likelihood of success.
In this case I think it made sense for OS to go ahead and build their own since they have become a key online rallying point for the sports gaming tribe:
- Operation Sports has been around for about 10 years and they have built up a substantial member base (There are almost 800 member online at this moment)
- OS focuses on a specific interest, thus they quickly became the number one destination for enthusiasts.
- The existing site already had very active discussion forums thus enabling them to more safely take this risk
The key questions Yahoo should be asking are:
- Is the market too saturated with players such as Facebook, MySpace and boutique social networking sites for us to profitably get to critical mass?
- What is Yahoo’s proposition? What can we do that no other site can do?
- Can Yahoo make it easy for people to find their tribes on our site and make it easy for them to interact?


