Posted by Vince Wadhwani on Jun 26, 2007

Allow me to make a bold prediction. Yahoo! will suffer the same fate as Palm Inc. by becoming irrelevant in the next 2 years unless Jerry Yang manages to steer the ship back on course. Why do I say that? What could those two companies possibly have in common? I mean one is clearly an Internet superstar while the other makes crappy hardware.

Yes, very true. One is strictly software based while the other is mostly hardware. But here are some things they have in common which spell doom:

Both neglect cross platform compatibility. With Palm, support for Mac OS was never very good. The Mac always took a back seat to Windows and so when iTunes and the iPod and the iWhatever came along and Apple starting getting more notice, Palm wasn't ready. Today I have friends that are ready to jump on the iPhone for no other reason than they're sick to death of the terrible experience they have with using a Treo with the Mac. They're not going to jump to Windows so they can use a phone, they're going to use an alternate phone that lets them use their laptop/desktop.

Yahoo! has made similar mistakes in the past with many of their features being tied specifically to Windows Internet Explorer. With Safari coming to Windows they'll scramble to add support for it, but if they're smart they'll just start embracing Open Web Standards so that Firefox and Opera work too. I was just on the Yahoo! Travel site and it is completely broken with Firefox 2 on my mac. As is their beta of the new MyYahoo page.

This brings me to another commonality. The inability to use human capital correctly. I mean, seriously, there are thousands of developers out there who individually can create beautiful, rich websites that work cross platform. You're telling me that Yahoo and Palm can't muster up the forces to release things that work on the Mac or Linux? Maybe they should cut 10% from the CEO's salary and put that towards hiring some devs who do something non-Windows based. Both companies should be pushing the user experience over a Microsoft agenda. Speaking of which, even Microsoft has a Mac version of their Office suite. Without it, Office would be one step closer to being wiped out by OpenOffice.

Both are following. And badly too. Palm is still scrambling to keep up with rivals like Nokia and Motorola (forgetting the iPhone for a minute if we can do that) while Yahoo! is clearly still trying to figure out Google. Apple stepped up to fill a void that Palm left, while a smattering of companies are gunning at Yahoo while they putter around with Betas. Here's the thing Jerry, Google released a close to final product while calling it beta while everything you've got in beta pretty much sucks butt.

At this point I should mention that I know about Palm's Foleo product and Yahoo!'s Pipes. Meh.

Neither company takes advantage of their acquisitions. I don't mean drugging them while on a date, but Yahoo! acquired some great sites like Flickr and Delicious but haven't managed to really take full advantage of either. They're doing ok but could do much better. Likewise Palm famously acquired BeOS, spun off their OS division, watched it get bought, re-licensed PalmOS, and lost several years to Windows Mobile in the process. Like Apple was saved by NeXT (and BSD) Palm is looking to Linux to rescue it. We'll see if they can build in-house what they had in their hands several years ago.

Neither leads in their field. Here's the big problem. It would be one thing if they neglected cross platform compatibility, didn't have great new products, and instead had a solid core product. But that's not the case. Less than 10% of search results to either this blog, Buyindie, or Railfood come from Yahoo! Their Search is ok but it's never as relevant as Google's results. It's been that way pretty much since Google came on the scene.

Palm's core PIM is pretty much a dead concept, now being married closely with Treo. The Treo (which I guess we can admit was acquired via Handspring and thus dampens my argument about Palm's acquisition impotence a bit), the treo is a bulky, inadequate P.O.S. Useful for 2001, but embarrassing for 2007. Given the speed at which better products are coming out of the woodworks from other manufacturers, one wonders whether it's time for another acquisition.

So here's hoping that Palm's Foleo is somewhat successful and that the hiring of my old boss helps right the ship. And here's hoping that Jerry can muster the forces at Yahoo! and get them working again. I sure would like to be able to use FF with more of their services. If not, I'll be seeing you guys in the discount aisle next to Palm on the NASDAQ.