Then and now: 5 years ago, Yahoo! was 'Web-office curious'

Summary:While using Google this morning to hunt down a story that I once wrote about mysterious cybersquatting practices, I came across a news item circa 2001 with the headline Yahoo hints at Web-based office tools.  In that story, Stefanie Olsen wrote:Yahoo is testing demand for a new paid service that would feature Web-based word processing and other office applications, a move that could boost much-needed subscription revenue in the face of an anemic online ad market....

While using Google this morning to hunt down a story that I once wrote about mysterious cybersquatting practices, I came across a news item circa 2001 with the headline Yahoo hints at Web-based office tools.  In that story, Stefanie Olsen wrote:

Yahoo is testing demand for a new paid service that would feature Web-based word processing and other office applications, a move that could boost much-needed subscription revenue in the face of an anemic online ad market....The giant online portal is hosting a survey on its Web site that asks questions based on a hypothetical "full-featured suite of office productivity tools available online through a browser, handheld devices and Web-enabled cell phones."..."Combined with online file storage, this application allows you to access and edit all your files from anywhere at any time. You would also be able to grant access to your document to others," the survey page reads.... The addition of Web-based office tools would extend Yahoo's foray into small-business and office products.

The size of the market for Web-based office applications is unclear. Microsoft's Office dominates the PC market, facing only weak competition from rivals such as Sun Microsystems' StarOffice and Corel's WordPerfect....Yahoo's tool suite could include such applications as word processing and spreadsheets. It also could allow people to import and export Microsoft Office and Adobe PDF files. It may also include 15MB of storage, with "the ability to purchase additional storage as you go," according to the survey....Consumers could also store images on Yahoo and give friends the keys to access the files. It would also let consumers create directories of files, letting them control access to some documents and keep others private.

Yahoo has been hammered by the dot-com wipeout, which has sharply cut its revenues and earnings. In January, the company trimmed revenue expectations from $1.42 billion to between $700 million and $775 million. Its stock price has plummeted from a 52-week high of about $106 to less than $10 a share....Yahoo's efforts to augment advertising with other revenue sources have shown few results so far. In its second-quarter earnings call, the company said it expects advertising to account for 80 percent of its revenue this year, down slightly from about 85 percent in 2000.

You have to read the whole story to get a full appreciation for how far ahead of its time Yahoo really was in 2001.  And to think it didn't act on some of these great instincts until just recently.  Today, it has no Web office offering to speak of.  While Yahoo still has a service for online storage (Yahoo! Briefcase), it almost never gets mentioned amidst the bumper crop of independently launched services or Google's GDrive.  And then "granting access to your documents to others?".... can anybody say "BitTorrent" or "Napster?" 

Today, the market conditions for Microsoft Office are a wee bit different.  It may still have the same dominating presence. But the pressure to break loose that dominating grip on both the file format front (where its competitors have finally figured out how to gang up on the Redmond-based software front with OpenDocument) and the Web-based Office front with its growing number of solutions from individuals like Dan Bricklin (wikiCalc) to big outfits like Google (as the Web becomes a more viable platform for Office-like productivity) has never been more intense.  Imagine where it would be today if Yahoo! had already been in the market for five years with its own offering. 

And then, the idea of image sharing and giving friends access to them.  Actually, Yahoo! Photos has been around since at least 2001 (I found an old press release dating back to December 2001).  But, I can't help but think how things might have been different for Yahoo had it really invested in some of these services that it was already running or contemplating in 2001.

On the Wall St. front, Yahoo still appears to be having it's share of advertising woes.  Yahoo apparently gets more page views than any other site in the world but is having difficulty monetizing them.  Meanwhile, Google with its fewer page views has blown right by Yahoo over the last few years.  Yesterday, Yahoo! met earnings expections but its stock plunged nearly 14 percent in after-hours trading after it announced that it's new advertising platform wouldn't be ready until later this year.  In a story that pictures former ZDNet CEO (now Yahoo! COO) Dan Rosensweig, Michael Liedtke of the Canadian Press wrote:

The backlash intensified during an analyst conference call when Yahoo management revealed a much-anticipated change in its formula for displaying ad links will be delayed by at least three months....Investors have been eagerly awaiting the new ad platform, hoping the improvements would enable Yahoo to do a better job displaying short ads for Yahoo's audiences to click. The clicks on those ads, which typically appear as text on the top and sides of webpages, are critical because they trigger commissions for Yahoo and its partners....Google's financial growth during the past two years has outstripped Yahoo's partly because it had developed a better formula for determining which ads to display alongside search results - an advantage that even Yahoo's own management has conceded.....Yahoo now doesn't expect its new approach to be available until the fourth quarter, pushing back the potential financial benefits until early next year.

The bigger picture -- the one where Yahoo! appeared to have the right vision but only dipped its toes in the water (and failed to establish market leadership based on innovation) and the one where the company still appears to be reacting ever so slowly to its competition -- seems to beg the question of whether Yahoo! is a bit laggardly given what its truly capable of. 

Topics: Browser

About

David Berlind was fomerly the executive editor of ZDNet. David holds a BBA in Computer Information Systems. Prior to becoming a tech journalist in 1991, David was an IT manager.

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