Peanut Butter Portals
A few days ago the Wall Street Journal published "An internal document by Brad Garlinghouse, a Yahoo senior vice president, [that] says Yahoo is spreading its resources too thinly, like peanut butter on a slice of bread." This memo presents a mixture of operational and strategic problems and solutions. If you remove just a few very Yahoo specific words, much of it could apply to a vast number of bureaucratic companies lacking effective operational leadership and strategic focus, regrettably common problems. What I would like to focus on is the specific strategic issue facing Yahoo and its rivals: attempting to be an Internet portal is the root cause of the peanut butter problem.
The portal concept is an anachronism from the pre-web days when AOL, Compuserve, Prodigy and others pioneered the online era. Lacking a common protocol to link content, they had no choice but to create self-contained online destinations accessed with proprietary software that captured the user within their online world. The advent of the web and its underlying protocols signaled the end to that era. The portal concept, embodied by Yahoo, MSN and AOL, somehow lives on, fighting a losing battle to the forces of extinction.
The very word portal gives us a clue to the problem. A portal is a doorway. In today's online world, that doorway is the web browser. The current generation of browsers organizes bookmarks and history, tabs and feeds, and provide direct access to powerful search engines. The online doorway is wide open and easy to use.
The portal concept has been hijacked and its meaning morphed from online doorway into "a place where we try to capture the user and hang on to them for dear life by offering a dizzying array of services and content. We then try to monetize them through advertising, premium services and such." This is of course sabotaged by the lead service offered by the major portals, web search, which takes the user out of the portal. It is as if you walk into Nordstrom and the greeter asks, "May I direct you to another store?"
Google knows this and has not tried to be a peanut butter portal. It is all about search monetized through advertising. The Google home page is clean, simple and useful. True, Google has yet to figure out how to do anything but dabble in any other offerings. This leads us to the solution to the peanut butter problem. You have to think product, not portal. If you have multiple products, then run your company that way. Google knows this but has thus far chosen to pay attention only to search. YouTube will force this to change and then perhaps Google will take the next step and start capitalizing on some of the other offerings it has thus far only dabbled with.
Think of a web site as a product with appropriate features and functions to satisfy a specific customer need. What the portal players have instead are a set of products mashed together into a Swiss army knife, with its attendant problems of being bulky, confusing and cumbersome. The prescription for the peanut butter portals is to learn from product companies. Separate and segregate the offerings, package and brand them, and give them their own top-level domains. Treat each as a line of business and align the organization to that principal. Get serious about product line P&L.
I like my peanut butter chunky.
Copyright © 2006 Philip Bookman
Technorati: software strategy, web strategy
The portal concept is an anachronism from the pre-web days when AOL, Compuserve, Prodigy and others pioneered the online era. Lacking a common protocol to link content, they had no choice but to create self-contained online destinations accessed with proprietary software that captured the user within their online world. The advent of the web and its underlying protocols signaled the end to that era. The portal concept, embodied by Yahoo, MSN and AOL, somehow lives on, fighting a losing battle to the forces of extinction.
The very word portal gives us a clue to the problem. A portal is a doorway. In today's online world, that doorway is the web browser. The current generation of browsers organizes bookmarks and history, tabs and feeds, and provide direct access to powerful search engines. The online doorway is wide open and easy to use.
The portal concept has been hijacked and its meaning morphed from online doorway into "a place where we try to capture the user and hang on to them for dear life by offering a dizzying array of services and content. We then try to monetize them through advertising, premium services and such." This is of course sabotaged by the lead service offered by the major portals, web search, which takes the user out of the portal. It is as if you walk into Nordstrom and the greeter asks, "May I direct you to another store?"
Google knows this and has not tried to be a peanut butter portal. It is all about search monetized through advertising. The Google home page is clean, simple and useful. True, Google has yet to figure out how to do anything but dabble in any other offerings. This leads us to the solution to the peanut butter problem. You have to think product, not portal. If you have multiple products, then run your company that way. Google knows this but has thus far chosen to pay attention only to search. YouTube will force this to change and then perhaps Google will take the next step and start capitalizing on some of the other offerings it has thus far only dabbled with.
Think of a web site as a product with appropriate features and functions to satisfy a specific customer need. What the portal players have instead are a set of products mashed together into a Swiss army knife, with its attendant problems of being bulky, confusing and cumbersome. The prescription for the peanut butter portals is to learn from product companies. Separate and segregate the offerings, package and brand them, and give them their own top-level domains. Treat each as a line of business and align the organization to that principal. Get serious about product line P&L.
I like my peanut butter chunky.
Copyright © 2006 Philip Bookman
Technorati: software strategy, web strategy
Labels: software strategy, web strategy
posted by Phil Bookman at 9:11 AM
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