Paul Graham’s Essay on Yahoo! and the Reaction From the Twitterverse

Jerry Yang of Yahoo! at Techpulse Last week investor/entrepreneur, and head of startup incubator YCombinator, Paul Graham penned another one of his outstanding essays for his site. The topic of this latest essay is Paul’s opinion about what “happened” at Yahoo! (my former employer as well), and specifically what he noticed in his time working there that formed his opinion of “what happened at Yahoo!”.

The point of Paul’s essay is to explain why he thinks Yahoo! “got hosed” and is a place where “things went wrong”. This is a standard theme in the media over the past few years as Yahoo! has consistently been compared to first Google’s rise, and now Facebook’s, and how Yahoo! failed. I don’t have too many problems with Paul’s essay itself. He’s speaking about his own experience at Yahoo! and why he thinks there were some fundamental issues that haven’t allowed the company to achieve as much success as he or others expect. I do have a few points of contention though, such as saying that no company has made a technical turnaround from a death spiral when there is such an obvious example sitting out there in Apple, but I can leave those for another day. Overall, it’s a very interesting read to get Paul’s perspective. As you’ll soon see, Paul’s obviously not alone in thinking that way.

My biggest problem I had with Paul’s essay was actually the reaction of how some extremely smart entrepreneurs and tech investors referred to Paul’s article on Twitter. Here are some samples:

Good piece by Paul Graham on how losing a “hacker culture” killed Yahoo than a minute ago via Echofon

According to Paul Kedrosky, a well-known investor/entrepreneur/blogger, Yahoo! is already dead. I know it’s a figure of speech, but isn’t killed a bit aggressive for a company that had $1.6 billion in revenue in Q2 and operating income of $175 million? No, that’s not Google, but it’s not Altavista either (since they actually are dead).

In case you were wondering why Yahoo collapsed… Paul Graham explains than a minute ago via Business Insider

Investor/entrepreneur/blogger Henry Blodget says Yahoo! collapsed! Did I miss this? I wonder where my paychecks were coming from for the last three years? Blodget is actually sort of employed by Yahoo! on the TechTicker show, so he should know that no collapse ever occurred. Even if you aren’t happy with how Yahoo! has performed compared to others, collapse is just sensationalistic.

A brilliant post by Paul Graham on why yahoo is lost: (via @cdixon)less than a minute ago via web

Investor/entrepreneur Keith Rabois calls Yahoo! “lost”. This is not as bad as aggressive as “killed” or “collapsed”, as I can see someone arguing that Yahoo! hasn’t had a clear sense of direction at various times over the last decade.

Many others also had similar comments on Twitter about the post. What I found interesting about all this is how so many smart people in the tech space who see first hand how hard it is to build successful web businesses are so willing to tear Yahoo! apart. How many of these investors or entrepreneurs will ever build a company the magnitude of Yahoo? How many of these people would just LOVE to build one company that was in the top few companies in it’s space when Yahoo! is currently in the top three and often #1 in almost every category (Search, Mail, Homepage, News, Sports, Finance, Messenger, Women, Entertainment, etc.) They keep talking about how it’s all on a decline, and in some cases that is occurring, but in other places Yahoo! continues to grow in these areas.

How many web companies have actually lasted 15 years with the amount of success Yahoo! has had and continues to have? Isn’t it amazing that Yahoo! is still doing so well when the majority of companies that started when they did flamed out in 1999-2001?

Don’t get me wrong, Yahoo! has it’s share or problems it will need to tackle to stay as popular and relevant as it’s been. The web is changing rapidly and Yahoo! will have to innovate to keep up. They have thousands of employees working on it though, and I’d give them a better shot than the rest of the “media” companies out there to be the next-generation media company as TV/magazine/print continue their decline. Will they be the leader in search or social? No, but why does everyone expect them to be?

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