How can one of the world’s biggest Internet portals, one of the world’s most visited websites, one with a few billion in cash and one with about US$17 billion ($20.62 billion) in assets that it could quickly dispose of be at the edge of the precipice? Well, it’s just how success is measured in the Internet world.

 

If you have been hiding under a rock and didn’t already know, on Sept 6, Yahoo!’s board fired its feisty CEO Carol Bartz, who had been brought in two years ago to fix the portal and give it a new direction. With its stock price a third of where it was 3½ years ago just before founder Jerry Yang was eased out and, still slipping, Bartz was a perfect scapegoat. She had to go.

 

But here’s the thing. Yahoo! may no longer be fixable as a standalone entity. Being one of the world’s biggest portals is not enough. Despite all its assets, Yahoo’s biggest liability is that in an industry where momentum is everything, it had lagged as an also-ran.

 

Not long ago, Yahoo! was the Mother of All Internet Portals. Years ago, I was a regular users of Yahoo!’s search engine. I still have a Yahoo! mail account though I must admit I hardly ever use it these days. I used to be on Yahoo! Messenger, I have even used Yahoo! to make online purchases. I still use its news site almost every day. And I use Yahoo Finance to check stock prices, currency market movements as a habit of sorts.

 

Founded in 1995 in a Stanford University dorm by David Filo and Yang, Yahoo! quickly became the go-to website, which then morphed into a portal. At the height of the Internet boom in early 2000, its stock price ballooned to US$118 a share. Filo and Yang were each worth more than US$10 billion at the time. That might sound like pocket change to Mark Zuckerberg, founder of the still-private Facebook, who is reportedly worth US$40 billion, but believe me, back then, US$10 billion was a lot of money.

 

Yahoo! never really recovered from the tech bubble burst. It’s stock fell more than 90% to US$8 or so, then hovered between US$15 and US$30 for much of the decade. One after another, Google, Facebook and others overtook it by creating new niches such as search and social networks. Video sharing site YouTube emerged only to be swallowed by Google. Older e-commerce rivals such as eBay and Amazon strengthened their lead in their own niches. Yahoo! at one point or another tried to copy each one of them — and failed. Yahoo! had everything, yet it specialised in nothing. That made it harder to monetise the hundreds of millions of eyeballs it had. Internet is a chaotic playfield, but you win by being focused, which Yahoo! never was.

 

The good news is that Yahoo had made a ton in its heyday and put that in nest eggs in Asia called Alibaba Holdings, Hong Kong-listed Alibaba.com and its own listed affiliate Yahoo! Japan. Its stakes in the three companies are worth roughly US$17 billion, give or take a billion. (Its current capitalisation is US$16.8 billion.) If it waits a few years until listing of Alibaba’s subsidiary Taobao, China’s largest online shopping site, it could fetch a couple of billion more.