From the Crowd

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Yahoo should think pink, not purple

July 30, 2012: 11:31 AM ET

Are women the key to Yahoo's salvation?

By Dave McClure, contributor

I'd like to write a different Open Letter to Marissa Mayer. One that plays to both her strengths, as well as those of Yahoo (YHOO). It's a bit off the wall, but if you think it thru with me, I bet you'll agree with the strategy.

Yahoo has struggled for the last six to seven years – with what it stands for, who's running the show, how to keep its employees, how to compete with Google (GOOG), and how to take advantage of its amazing assets in content, communications, and community around the world. The last really bold move Yahoo made was probably acquiring Flickr (aside from turning down the Microsoft acquisition offer, or the previous hire of Carol Bartz). Yet by tapping Marissa Mayer as its new CEO, there is still a way for the company to remain relevant, and even perhaps regain some of its former glory.

The answer is simple: Focus on WOMEN.

I'm sure you think I'm being both foolish and sexist with this statement, but consider Yahoo's strengths. It still has huge audience that visits every day for content that appeals to women: Fashion, family, shopping, entertainment, etc. In addition to these properties, Yahoo is also strong in email, chat, images and communications, with frequent and broad usage all over the world.

Now what if Marissa used Yahoo as a bully pulpit, to address the needs of a market that is roughly 50% or more of the global Internet population? What if Yahoo began acquiring or partnering with properties specifically relevant to women, like Pinterest, ShoeDazzle, Gilt Groupe, BabyCenter, Oprah, People, Etsy, Ellen Degeneres and Martha Stewart (or BritMorin.com).

What about working with startups doing healthcare & wellness like EcoMom, career advice like Daily Muse, finance education like Daily Worth, children's activities like ActivityHero and photo sites like PicCollage(sorry shameless 500 Startups plugs there)

What if Yahoo went back to its vision for media and entertainment, and acquired services like EventBrite for ticketing, Hulu or Netflix (NLFX) for video, and perhaps picked up Zynga (which appeals to mostly women) for gaming?

What if Marissa made it known that Yahoo would be the best tech company in the world for hiring women execs, putting women in leadership positions and advancing opportunities for women in the workplace (as Sheryl Sandberg is so well-known for promoting at Facebook)?

What if Yahoo expanded its international advantages by focusing on half the world's population that is still discriminated against, disadvantaged and even dis-empowered in many growing developing nations? Wouldn't that be an awesome way to appeal to women globally, and be the torchbearer for women's issues and content around the world?

While this may sound extreme, this is the Niche To Win strategy writ large. By narrowing its focus to women, Yahoo can beat the pants off its competitors. Both Google and Facebook (FB), run by the geekiest and nerdiest of men, are clearly out of their element when faced with how to address the female customer.

And consider that in previous acquisition discussions, Yahoo was always at a disadvantage to other platform giants – but now, wouldn't any woman-focused startup prefer to join Yahoo, run by a woman, led by women execs and focused on women customers?

So Marissa, let me suggest you make a bold move as you take Old Purple by the reins – think BIG, think DIFFERENT, and think PINK.

Then go beat the living crap out of the Old Boy Network.

Dave McClure (@davemcclure) is founding partner of seed investment group 500 Startups. This post originally appeared on his blog.

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