Yahoo’s Nose Dive. Pull Up.

The foundation of search lies in the definitions of what people want and what makes them click to find what they seek. In other words, search is the foundation of digital commerce.

Yahoo’s latest drama is only the tip of the iceberg for the stressed Internet company. Since former Yahoo CEO Carol Bartz officially threw in the towel on search nearly three years ago, it seems odd to be mentioning the words “search” and “Yahoo” in the same sentence, but smart search knowledge is exactly what will fix Yahoo. That, and a little less drama.

Yahoo’s core business was in ruins as its search ad platform, “Panama” failed from multiple angles and it was widely reported that Yahoo was saving 200 million by shuffling free of the search coil almost 3 years ago. What happened to investing in the company’s future with that huge savings?

How Yahoo Can Fix Its Business

If the current agreement with Microsoft survives, Yahoo has the better part of a decade to mix up a better batch of rat poison. I don’t mind sharing my thoughts (and 1 or 2 non-sequitors) on how Yahoo can fix its business with search, without actually doing any search.

• Stop treating your core business like a red-headed step child. I realize most of your current CEO candidate pool hasn’t the slightest idea how search works, but do you have to keep proving it so painfully? While you may not want to invest in search technology, you can invest in using defined terms and intent to give the people — and later advertisers — what they need. Interim CEO Ross Levinsohn was a VP at AltaVista back in the day — maybe he can put whatever he knows to good use.

• Don’t look back. Today’s pattern-watching-to-content-production practices, while driven largely by search data, only show us what’s happened in the past. It’s no accident hundreds of content pushers are headlining canned features about the hazards of resume problems this week. A wise man once told me if you spend all your time looking back, you won’t see where you need to go. In other words, end the reverse engineering culture and start innovating again.

• The world doesn’t need another ad-hoc content provider. That’s what we have AOL for. Really. And HuffPo. We love HuffPo. It’s great for people who can’t express themselves multi-syllabically, can’t read or are desperate for mindless entertainment and vacuous editorial.
• Take advantage of search data. With the exception of Ask essentially turning itself into Yahoo Answers or a cheapified version of Cha-Cha, the search market share needle hasn’t moved in years. The lack of movement tells me two things; one, Microsoft has hundreds of millions of ad dollars invested in simply not losing market share and two, all that search intelligence hasn’t been put to good use.

• Look to social. Google has yet to achieve victory in the connected social world. Perhaps there is some money in them thar hills? Bing has integrated social connections into search. Google incorporates social signals in search. Do you think maybe there is some opportunity to grow while Bing and Facebook roll around in the hay? I do, and so should you.

• The world doesn’t need another ad network. You can’t swing a dead cat without hitting one of those in the digital ad business. Oh, and you are about as likely to know where your ads appear in one of these “blind” networks as you are when buying ads from a holding company trading desk. When you finishing buying the ad agency holding companies steaks and spa days, you’ll find that advertisers actually favor transparency and verifiably well-positioned performance.
• Pay attention to the users. While I am on the subject, if you are going to build technology platforms, ask the people who are actually using them. about usability and functionality. Sir Martin, Mr. Napier and David Jones are all fun to have a drink with, but they aren’t the ones who will be using your little inventions every day. The “industry” supported the use of Microsoft’s technology when you put the little search deal together because the average agency rep using Panama would take a root canal over running a basic report using “Panama.”

Yahoo should favor stability over getting excited about the next shiny object. Today’s CEOs are at the mercy of their boards and public opinion. Why would anyone want a job that leads off with 2 strikes? Well, you can make a boatload of money for a couple of years in spite of the fact that you are waving at the Ty-D-Bol Man on the way down.

If we remove the drama and read between the lines this curriculum vitae mishigas is pretty academic; you don’t get canned from a resume hiccup when you are knocking it out of the park. If Yahoo appeared to be winning, we wouldn’t be having this discussion. And let that be a lesson to all of you — make people tons of money and you’ll get away with homicide. Trip up once and get in the way of the stuffed shirts and they’ll can you for a typo.