The Curious Case of Yahoo’s (Missing) Identity

A lot has been written about the ‘prolonged demise’ of Yahoo, which is still puttering along, despite its purchase by Verizon Media in 2017. The internet company has suffered a tumultuous and tiring 25-year identity crisis. This was perhaps most famously crystalized in the leaked “Peanut Butter Manifesto,”an internal memo from 2006 that criticized the company for spreading itself too thin.

“If you’re everything, you’re kind of nothing. The sad reality…is [Yahoo] never solved its core identity crisis.”

– Brad Garlinghouse, former Yahoo executive, author of the “Peanut Butter Manifesto”

Most recently, after the company announced its third new logo in 10 years, the Verge quipped, “Yahoo redesigns its logo to remind you that Yahoo exists.” An important question for sure, but, we would argue, not the most important. The real question that Yahoo executives should have been trying to communicate from the beginning was not “Does Yahoo Exist?,” but rather “Why does Yahoo exist?” Yahoo’s downfall was the result of a lack of a clear, consistent and compelling purpose. Companies driven by purpose outperform the market by a huge margin. This according to a ten-year growth study of more than 50,000 brands around the world, as chronicled in Jim Stengel’s breakout book, Grow. The study found that the 50 highest-performing businesses were the ones driven by brand ideals. Collectively, the “Stengel 50” grew three times faster than their competitors. His explanation? This fundamental truth: people don’t buy what you do, they buy why you do it. In the case of Yahoo, the company was set up to fail from the beginning; not because it lost its way, but because it never actually defined its way — its underlying purpose — to begin with. It isn’t alone. This is an affliction facing many companies, especially those in the rapidly changing world of technology. The common problem in these situations is that the company is too focused on the products and solutions it offers, or the category it falls into, which holds it back from talking (or even thinking) about the higher purpose for why it exists – its vision and the ultimate impact it wants to have on those it serves. IBM’s “Smarter Planet” is one of our favorite (well-documented) examples of a purpose-driven brand. It paints an inspiring vision for the future that both internal and external stakeholders can get behind. Most importantly, while it provides a unique selling platform, it moves IBM way past the products and services that it actually sells. Though the company has moved on from Smarter Planet, its new brand campaign “put smart to work,” is a smart evolution. It harnesses the same legacy purpose but further operationalizes it, aligning with modern buyers’ expectations that technology be both intelligent and executable. Crucially, it still succeeds where Yahoo often failed— issuing a big idea, a why that serves as a call to action. For more about defining your brand’s purpose, reach out.