Reposting a comment from Fred Wilson's blog, on which he says they need new management and a few folks are replying:
Others here are saying that if Yahoo had the team of 1997, they'd do great. Yahoo had a lot what's currency today before it was currency: social networking (Yahoo 360), bookmarking (MyWeb), email and, of course search.
The problem, from my perspective, was in the execution and sometimes the marketing. The email product was good for its time, but hasn't been updated in ages, and is still very glitchy. Small business email, paid, doesn't have the functionality of Gmail or many other services.
Web building services are more expensive and less functional than others who've overtaken Yahoo in functionality as a host. (A site I have there recently was very slow and it was only after I called -- 45 minutes on hold! -- that I found out they'd been having server issues. Then the told me they'd escalate the site.)
I don't know what team it was in '97. But I do see tons of great ideas and opportunities that were not seized on.
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