Yahoo sale a cautionary tale of need to be nimble and innovative

The sale of the core Web assets of Yahoo! to Verizon for US$4.8 billion marks an end to one of the pioneering companies that was instrumental in making sense of the chaotic World Wide Web - as the Internet was called in those days - in the early 1990s.

Its Jerry and David's Guide to the World Wide Web - released in 1994, and named after the two founders Jerry Yang and David Filo - was the first attempt at organising information on the fledgling Internet. The following year, Yahoo was set up with investment from Sequoia Capital as a hip and innovative company that was a pioneer not only in Internet search but also online advertising. However, Google came to its own in the early 2000s, and then Facebook a few years later, and these two changed the way the Internet operated and Yahoo has been playing catch-up ever since. It is rather ironic that in 2002, Google's founders, Larry Page and Sergey Brin, were willing to sell their company to Yahoo for around US$5 billion but the money on offer was US$3 billion and so the deal didn't happen. In 2006, Yahoo was close to buying Facebook for US$1 billion but in the last minute lowered its offer to US$850 million and the deal was off too. In both cases, it could be argued that Yahoo took the right call based on earnings but in hindsight it's obvious that they missed the woods for the trees. The rest, as they say, is history.

The key lesson from this is that in today's fast-evolving technology world, there's a need to stay nimble, see the big picture and be able to make big bets. A good example of this is Amazon.com coming out with Amazon Web Services and building a completely new world-beating cloud business by taking risks and staying on course. Another would be Facebook buying Instagram and then WhatsApp for what then seemed to be outrageously high valuation. Google's purchase of loss-making YouTube and then making the Android platform free for use by mobile phone makers are also great examples of innovation and leadership foresight. The point to note here is that with the speed at which technology is evolving - thanks to a combination of social, mobile, cloud computing and big data analytics - it's difficult to stay ahead of the technology curve. And this is true not just for those in the technology business, but for almost every industry vertical. For example, are fintech companies (which use technology to provide innovative banking services to hard-to-reach customers) a threat or boon for established banks? This would depend on how nimble and adaptive to change the banks are. Those with vision and foresight welcome collaboration and competition with fintechs; those who don't are likely to adopt the walled garden approach.