Wake Up, Yahoo!

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There's a fine line between Mash and M*A*S*H at Yahoo! (Nasdaq: YHOO  ) .

The online giant is shutting down its sickly social-networking site and advising Yahoo! Mash users that their profile pages will be axed next month. Yikes! This thing didn't even make it a year before being put out of its misery.

Yahoo! Mash? Wasn't that supposed to be the magnetic replacement for the shuttered Yahoo! 360? Once again, Yahoo! falters in its stab at drawing a crowd in social networking. There's unlikely to be another attempt, since it’s now burned through the loyalty of both 360 and Mash users. Who’s going to take the time and effort to create profile pages if Yahoo! is just going to go trigger-happy?

This is ridiculous, because Yahoo! would seem to be at a huge advantage here.

Yahoo! President Sue Decker called the company’s heavily trafficked Yahoo! Mail platform a "dormant social network" last summer. With 250 million accounts at the time, Yahoo! has a ton of people already coming to its site on a regular basis. All Yahoo! needs to do is flip the switch and --

Whom are we kidding here? Pssst! Sue? Even your social networks are dormant social networks.

It's a shame, because for the companies that get it right, social networking is where the traffic goes to party. In a troubling comScore research note, News Corp.'s (NYSE: NWS  ) MySpace is now the leader in serving up display-advertising pages -- 56.8 billion in June, versus 53.1 billion through all of Yahoo!.

This doesn't mean MySpace is anywhere near as valuable as Yahoo!. If there is any silver lining for Yahoo!, it's that social networking has been a tricky niche to monetize. Young crowds go through a ton of pages but rarely nibble on interactive marketing offers.

However, Yahoo! has a habit of letting social networking slip through its fingers. It lost out on Bebo when Time Warner (NYSE: TWX  ) acquired it. Google (Nasdaq: GOOG  ) was in the market early when it snapped up Orkut. News Corp. has MySpace, of course. Yahoo! almost walked away with Facebook but blew it. Microsoft (Nasdaq: MSFT  ) now owns a small stake in Facebook and is its ad-serving partner.

Yahoo! has proved, yet again, that it doesn't have an organic solution to cashing in on the social-networking craze, yet it has somehow been a stingy bidder when established sites have angled for exit strategies.

I stink at yard work. I do. You don't want to see me trying to mow my lawn. However, even I realize that if I get miserly and refuse to pay a lawn-maintenance company to do it right, the weeds will take over.

What I'm trying to say, Yahoo!, is that if the grass is greener on the other side, you buy the other side.  

Some articles to pass the time until Mash gets smashed:

Microsoft is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz was a beta tester of Mash but lost interest quickly. He wasn't alone, apparently. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 29, 2008, at 5:48 PM, yamanoor2001 wrote:

    Well, buy or be sold. Don't take your stock price out for a beating...

  • Report this Comment On August 30, 2008, at 6:53 AM, notyourtype007 wrote:

    Yes well, being a realtime social networker myself (or a realtime narcissist if you may) I'd say there can't be a worse way to burn money than putting up with a brand new social network, with very little to offer in terms of innovation or unified theme. We've enough profile pages already in more than enough networks, so much so that I suspect a website keeping track of all the profiles would sell pretty hot ! Or does that exist already?

    A network targeting niche audience can be something, innovation again be the key here, but the days of Social Networking just for the heck of it are long gone. Behold the era of Virtual Worlds !

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