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Yahoo! Gives MyBlogLog The Pink Slip

After a little over six years as an online community, MyBlogLog has been given the proverbial pink slip by  its parent company, Yahoo!, in an attempt to cut costs. Originally created by Cloudspace, MyBlogLog allows interactions between bloggers by way of a web widget that also enables members to see who visited  their blog. Acquired for $10 million in January 2007 by Yahoo!, MyBlogLog currently has over 275,000 members and averages approximately 22 million daily page visits by way of the MyBlogLog widget. On February 24, 2011, Yahoo! announced that MyBlogLog will be terminated on May 24, 2011 in an e-mail to its users:

Dear MyBlogLog Customer,

You have been identified as a customer of Yahoo! MyBlogLog. We will officially discontinue Yahoo! MyBlogLog effective May 24, 2011. Your agreement with Yahoo!, to the extent that it applies to the Yahoo! MyBlogLog, will terminate on May 24, 2011…

We thank you for being a customer on Yahoo! MyBlogLog.

Sincerely,

The Yahoo! MyBlogLog Team

The termination of MyBlogLog brings into light the failure of Yahoo!’s recent acquisitions that are unable to hurdle the integration difficulties and endless, bureaucratic red tape to continue moving forward. As it turns out,  these issues ultimately cause the founders to bolt after the two-year mark and leave the users with the shell of the founders’ ultimate goal.

 

Geocities (acquired January 1999; $2.87 billion)

  • Announcement after Acquisition: Yahoo said it plans to integrate Geocities tools into areas such as auctions, chat, message boards, and classifieds. It also plans to integrate the community site’s home page building services into Yahoo Clubs. (Cnet)
  • Current Status: Geocities was closed done by Yahoo! in late June 2009.

Flickr (acquired March 2005; $35 million)

  • Announcement after Acquisition: “We’ll be working with a bunch of people that totally get Flickr and want to preserve the community and the flavor of what is here. We’re going to grow and change, but we’re in it for the long haul, with the same management and same team.” (Flickr)
  • Founders’ Status: After three years, co-founders Caterina Fake and Stewart Butterfield left the company, while many engineers were laid off in 2009.
  • What happened?: Ex-Flickr architect Kellan Elliot-McCrea on Yahoo!’s bureaucracy: “Roughly 15% of any of the large projects they (we?) tackled over the last few years (internalization, video, various growth strategies, etc) went into the building feature. 85% was spent dealing with Yahoo!.” (Quora).
  • Current Status: Even with Facebook grabbing some of the photo sharers, as of September 2010, Flickr had hosted more than $5 billion photos.

Upcoming (acquired October 2005; $1 million)

  • Announcement after Acquisition: “We’re happy to become valued members of the Y! Local Team, trusted to turn out part-time ideas and blue sky into a tangible, fully-featured events offering. The opportunity to join forces with Y! ultimately bespeaks all of our sincere interest in making a useful, interesting events substrate on which a flourishing, social community can naturally grow.” (co-founder Gordon Luk)
  • Founders’ Status: Co-founders Gordon Luk and Andy Baio left a few years later.
  • What Happened?: According to ex-Upcoming engineer Neil Kandalgaonkar, Upcoming was “parceled out to different parts of Yahoo! where they were subordinate to the existing hierarchy and agenda.” He additionally stated that the “Yahoo! model is to think of their sites as media properties with audiences, and bolder ideas like one social network encompassing them all was never a priority.”
  • Current Status: Yahoo! announced a new look for Upcoming in December, but it is also possible that it will be merged with other Yahoo! sites.

Del.icio.us (acquired December 2005; speculated $15-20 million)

  • Announcement after Acquisition: Joshua Schachter: “Together we’ll continue to improve how people discover, remember and share on the Internet, with a big emphasis on the power of community. We’re excited to be working with the Yahoo! search team – they definitely get social systems and their potential to change the web.”
  • Founders’ Status: Joshua Schachter left in June 2008 after his contract expired.
  • What Happened?: Joshua Schachter: “I was largely sidelined by the decisions of my management. It was an incredibly infuriating experience.”
  • Current Status: Still active with over 5.3 million users as of 2008; however, there have been leaks that Yahoo! may let the app sunset.

MyBlogLog (acquired January 2007; $10 million)

  • Announcement after Acquisition: “We don’t plan on making any immediate changes to the MyBlogLog Web site, distribution or branding. We want to encourage and not disrupt the continued growth of the MyBlogLog community and foster the innovation that has already made MyBlogLog an indispensable part of lives.”
  • Founders’ Status: The founders of MyBlogLog, left the company in July 2007.
  • What Happenened?: Co-founder Eric Marcoulier: “So much of your company’s long term success when it’s acquired is based on the amount of executive juice it has. The only way it survives and flourishes is if you have an executive champion who promotes it internally. Shortly after we were acquired we were transferred away from our champion and under someone who didn’t feel the same way about MyBlogLog. In those circumstances, things simply slow down.”
  • Current Status: MyBlogLog users were informed on February 24, 2011 that MyBlogLog would be terminated May 24, 2011.

Maven (acquired February 2008; $160 million)

  • What Happened? Yahoo! announced that expansion was no longer cost effective and wanted to focus on other video offerings. (PaidContent)
  • Current Status: Yahoo! announced that the platform will no longer be supported, beginning in 2010.

 

It can be argued that, in the end, it is all too difficult for acquired entities to change their organizational structure to overcome the bureaucracy they encounter at large organizations, like Yahoo!.  Additionally, as stated by Kellan Elliot-McCrea, it was not only difficult to move forward due to endless meetings and decreased control, but, in the case of Flickr, innovation and technological advances were stymied due to a decrease in available resources. However, there are examples that disprove this theory, such as the acquisition of Rivals.com (acquired by Yahoo! in June 2007 for a reported $100 million). For those of you that are unfamiliar with Rivals, it is a website that is mainly dedicated to college basketball and football recruiting. Even though it is a small niche website, Rivals successfully competes with Scout.com (acquired by Fox Interactive Media in June 2005 for a reported $60 million) and ESPN recruiting for the loyalty of college fans everywhere who seek out daily news on that next big recruit who is going to take their program to the top. (It must be noted that it is somewhat unfair to include ESPN recruiting in this discussion due to the fact that ESPN Recruiting Insider airs every Thursday at 5 on ESPNU). Regardless, even after Yahoo! acquired Rivals, it did not nose-dive, like other acquisitions, but continued to grow and compete as a top source for extensive college recruiting news. In other words, to use the an old cliché, only time will tell if each failure is solely Yahoo!’s fault or if these startups “sunset” due to a combination of corporate competition, absence of a forward-looking business model and/or bureaucratic setbacks.

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