Many times once people/companies achieve success they put up walls to hoard and protect their spoils. But those same walls prevent you from making progress and parlaying your success into something bigger.
About 2 months ago I wrote about playing with the houses money. In that post I talked about my numerous experiences leveraging successes into bigger and better things.
Recently I have gotten tons of emails and comments asking for my take on the whole Yahoo selling out to Microsoft.
I think this is a perfect example of what happens when you play defense.
Lets first go back in history for the peole who don’t know.
Yahoo Search was originally powered by Google Search and monetized by Google Adwords. In 2001 Google’s Co-founders offered to sell the search Engine to Yahoo for 1 Billion dollars. Yahoo passed on the deal.
In 2002 Yahoo purchased the Inktomi search engine.
In 2003 Yahoo purchased they purchased Overture Services, Inc., which owned the AlltheWeb and AltaVista search engines. Overture also had a great revenue generating “in search results” contextual feed.
In 2004 Yahoo came out strong with its own search engine now utilizing the purchased companies algorithms and monetization of the contextual feed. Yahoo’s search monetization product (overture) was so strong that it was also powering Microsoft’s Search.
But it all went down hill from there as Yahoo! went on the defense. They never again would make a serious move in the search industry. As years passed by Google and Microsoft came out swinging with new products to greatly increase (and sometimes decrease) the user experience. But Google and Microsoft kept trying to build a better product.
Yahoo! sat on its ass and steadily lost market share and also Microsoft as a client for its overture product.
Last year they even gave up on their own product and started mixing in Google Adwords to monetize their own search results.
Now in their recent deal with Microsoft they are giving up search results on their core properties and basically gutting the companies core.
All because they decided to settle and play defense.
I think Bing is a great product and now that Google is the new Microsoft in terms of anti-trust watch dogs Microsoft is in a excellent position to gain some serious market share.
Playing defense gets you no where. Yahoo should have hedged its bet and purchased Google way back in 2001. Ya I know what your thinking… “Sure its easy to say that now”. But cmon Yahoo was POWERED by Google then.
Yahoo also purchased flickr which is a pretty awesome service…. but what are they doing with it? Nothing….
Yahoo also purchased delicious bookmarking service but what are they doing with it? Nothing….
Meanwhile there competition is passing them by.
But lets get off Yahoo!. At every conference I run into a new kid who tripped over a rock and fell into a pile of money. Lets say its with promoting weight loss… or dating… it doesnt really matter… Its always the same story.
But instead of leveraging their position and playing with the houses money they put up walls…. and when they go broke they start a blog or contribute on forums and become super bitter because nobody pays attention to them.
Are you playing defense?
About the author...
Jeremy Schoemaker – who has written 2415 posts on ShoeMoney.com.
Hi I am Jeremy Schoemaker and ShoeMoney.com is my blog. 99% of the post here are done by me but you will see others occasionally make guest posts. This blog is fun to write but for my day job I run several online companies.
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The Accidental Millionaires 
Perception is Everything (or “Fake It ‘Til You Make It”) 
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{ 110 comments… read them below or add one }
Yes You are right. After being one of the most influential brands on net they did nothing to maintain their brand value….
so what should the kid who fell on alot of money do? buy ads with it, buy another site with it?
Yes all of the above. Invest in yourself and the growth of yourself/company. If you fail learn from it and chalk it up to an educational cost.
Buying is good IDEA but Building is BEST idea my friend
If you have enough money you should build it in such a way that it give you hell lot of money in long run 
Rolling in it generally seems to be the norm. LOL!!!!
Yahoo always seemed 5-8 years behind no matter what they would do. They did start playing defense and stopped being innovators which was just the beginning of the end.
Yes i agree with your saying totally. At this point of time also if your website is full of spam and if you do MAD link building you will find your website on TOP of their engines …lol
I have experienced this like before 2 years & i dumped around 45 websites in their engines with Spammy META and did huge link building quickly and out of my surprise i am earning like $300 from those website on daily basis only from adsense
Good article Jeremy! It’s just a clear of example of doing nothing will get you nothing….they made a lot of mistakes and I guess they are a good example of what not to do…good perspective. Thanks for sharing.
Good post. totally agree with you. Doing nothing will always get you nothing!
Yep, been playing defense my whole life.
I know why, too. Has a helluva lot to do with graduating high school in the Rust Belt in 1978, then getting caught out in Savings and Loan scandal in Texas (working construction). Back then, failure meant not having enough money to pay the rent (or to eat well frankly).
I’m playing it different this time. After getting behind playing defense in 25 years of booming bubble economy, I decided I was doing something wrong. Going on the offensive now.
Playing Defense will take you no where ….very rightly said Sir
When i started my career as an online Entrepreneur i use to play safe like you have mentioned in your post, it got me damn no where for couple of years but after that i tightened my arms & started following major players in blogging industry like you, John and few more. Within few months i started looking at awesome results and from there till now i have not left even single opportunity to make money online Shoe. Once again i would like to thank you for all ideas & blog posts which made ME as Successful Internet Entrepreneur 
Sometime satisfaction also play as big hurdle in your way. If the top management is not interested to show aggression than how sub ordinate will do anything.
Google are aggressive and their labs are always full of new and useful products.
Great post Jeremy. Hits close to home for me as well. I started one of the first sites on the web dedicated to myspace surveys in 2006, at the time when anything related to myspace was converting like crazy. Made more than enough to quit my job and work on it full-time but I didn’t take it seriously enough to build a true business around it. Got caught up in living the “dot-com lifestyle” and got slaughtered in late 2007 and 2008 to the point where I couldn’t scale anything and had to go out and get a job again to support myself. Not a fun experience; but I learned a hell of a lot about myself through the process.
Luckily, I’m building another business that has much more long-term residual value and scalability.
Lesson? Don’t rest on your laurels and keep your foot on the gas.
Good stuff. There is nothing more POWERFUL than leveraging success into more success. It just doesn’t get any easier than that.
But I think Yahoo’s big mistep was turning the homepage into a portal. No one even notices the search bar. And although they’ve got some amazing properties, people don’t go there and think “search”.
BUT…if you had bought google back in 2001 then perhaps google would not be what it is today !!!
Very well said. Doesn’t matter what business you’re in. If you’re in front of the pack, or think to be, you always have to look back to make sure you’re still leading the pack or else you may be left trying to catch up.
Valid point made. You can only lead the pack if you know that you are leading and for that you have to keep an eye on your competitors and should always be +1 from them.
Heh i wish i could play any position. Sadly, everything i’m currently trying is failing.
But “you have to be in it to win it” motto is still strong within my head
The really great thing about trying internet stuff is it costs you nothing but time…. and if you are learning a great deal then its a great value for your education.
Yes i agree with what you are saying shoe.
Shoe – “Yes all of the above. Invest in yourself and the growth of yourself/company. If you fail learn from it and chalk it up to an educational cost.”
Shoe, is the Educational Cost a tax write off?
Offcourse yes buddy
Yea Yahoo has just been sitting around and not even advancing their products. Some times you have to know when to expand, if you fail and lose your money, just learn from your mistakes. Sitting there doing nothing will get you no where.
For advancing products you need time and efforts which is not with yahoo at this point of time.
Hey Jeremy, this is a great post. I began builfing my online network a couple of years ago. Sometimes I get really busy and can’t put time into expanding it by building more sites or making it better because its only a matter of time before someone does something better. I agree with you; playing defense gets me nowhere.
But at least that makes sure that in future you will be at there where you are today … but defence with proper planning is must to get progress.
I think most ShoeMoney blog readers are not playing defense, if anything it’s the opposite – trying a lot of things, spread out too thin and not enough time to follow up on all the half-finished projects… or maybe that’s just me
I totally agree with you on this one!
If Yahoo had bough Google, the internet would be Microsofts playground.
Tanks
lol …now they have started attacking on this blog as well …
When this kind of terror attacks will be stopped …ROLF
Very Good Post Shoe.
The best defense is a good offense
Most times mistakes are made through inaction.
Very rightly said. Mistakes are indeed made through inaction.
Great post,
How difficult is getting the algorithm for google adsense, why do they not just buy matt cutts and get him to fix their search engine problems?
Flickr- that is the best application in the makert but even I could monetise it better than what they are doing.
Aol is a bureaucracy.
The problem with Yahoo is, and has been for a long time now, the fact that it is a bit evil, playing in a space dominated by a player who isn’t.
Yes that’s very much correct sir.
You have to take changes to get anywhere but you shouldn’t rush into anything blindly
Shoemoney!
I just sent you a message via the contact form and I would truly appreciate if you could give it a look. I know you’re a busy man, but I think this could really be worth your time! Thanks man.
Great article. Don’t get complacent with your success!
It is absolutely mind-boggling that Yahoo actually had the opportunity to purchase Google outright way back then. I’m actually glad they didn’t, as they would’ve done nothing with it yet again, if going on history!
It is not that Yahoo did not do anything worthwhile while Google was creating its own den. Yahoo indeed was working hard but their energies weren’t focussed onto making one thing the best, but they were focussing on multiple things at one time. Consequently they couldn’t do anything with any of the businesses and are where they are today. Whereas Google worked hard on their search engine and captured a huge market share.
Wow, very cool post. I had no idea Yahoo missed on such a deal. I bet the CEO was going insane when he realized that Google is the real deal.
Igor
Even I never knew they had missed such a good deal which could have made them the market leader monopolistically.
yahoo began as a directory. human edited.
“The problem with Yahoo is, and has been for a long time now, the fact that it is a bit evil, playing in a space dominated by a player who isn’t.”
eh? if “player who isnt” refers to google, you mean google isn’t even a bit evil, or is more than a bit evil?
whichever… google isn’t steve jobs, but isn’t so pristine…
it is easier to remove google’s tracking. yahoo’s completely cloaks (IIRC a while ago)
You name is 123 ..lol
You are absolutely correct. yahoo should ahve bought out google in 2001. but in the end this shows us the dynamic nature of internet industry. wil be interesting to see how google takes on bing.
O man i got excited thinking you were going to come out with an awesome strategy for tower defence.
Tower defence games are the sole reason i never got around to sitting my MCSA exams. 4 hour lectures turned into a blur of tower defence.
Playing Defense gives you mostly a small but long time business.
Playing with high risk gives you the chance to become a big guy, but a much higher chance to land below a bridge.
So playing defence can be a right business model: Stabilize your business, purchase competitors if you have the chance to get them for low price etc.
that is very much correct Olaf. More risk you take higher is the chances of getting returns. I started first website like 4-5 years ago & when that website started making i kept on investing profits for creation and optimization of new websites for around next 2 years and out of my surprise income got almost doubled after 4-5 months of launching new websites. Higher Risks give you Higher returns if your Luck supports you and your work planning if professional
Business is all about taking calculated risks. Expansion, innovation, newer ideas all come when you have to courage to explore newer avenues and pastures. All of this involves some risk. Hence playing safe or, defensive cannot be a business model and no business model can thrive by playing defence.
Well every prudent businessman take the risk but according to the condition of market.
Instead of going blind aggressiveness I would prefer to have balance of both aggressiveness and defensive.
You should be sharp enough to understand at what time you should attack and what time you should defence yourself.
A very thought provoking post, Shoe! I’ve been down this road before, and I’ve seen both the good and the bad..
Things get even more complicated when you have a partner that doesn’t necessarily share your tolerance for risk.
I’d like to think that I’m just starting the game…. so by default, I think I’m playing offense. I don’t want to get to the point where I have to play defense. Once I have the ball, I’m not letting it go.
Yes bling aggressiveness is more dangerous than defensive.
Bling aggressiveness? ‘Splain.
yeah I can relate, especially when it comes to selecting who to add, and who not to add on your linkedin profile.
In fact Google lost some market share recently! http://newsknot.com/2009/08/google-loses-search-market-share/
It is true. They are going to loose some more market share if they deal with their customers the way they are dealing right now.
Yes, and I am an asshole for doing it!
Inspiring words shoe, I haven’t been taking as many risks lately…also not having as much fun as I used to.
You’ve convinced me – the time to double down is now!
its really simple- innovate. that’s it. Every success story you hear is due to innovation.
It is true that you will not get anywhere if you play defensive.
You have to be courageous enough to go all out and experiment and take the risks that come your way if you are to stand out from the crowd and win.
Yahoo suffered it long back and now that Google is in a frame where they are taking everything for granted, I feel they too would face the same results, if they do not improve.
Google is always on and Matt Cutts videos and other program on labs are example of this.
So they are working hard to be always ahead from others.
Yes they are always trying out new things and always trying to get even better. They never stand still and just wait.
That is the base of Google. They keep working and I think they give free time to their employee to work on as per their choice.
These are innovative thoughts and I think Google is enjoying that benefit.
You spelt “their” wrong. It’s “their” not “there”
Spelt? Really dude? Oy.
Bwahahahahahahahaaaaaah!
Ha ha ha ha ha ha
If you have exposure and there is room for development than playing defensive does not make any sense.
Because sooner or later your competitor is going to attack that field as well and can beat you easily.
This was the problem with yahoo. They have done simply awesome in the beginning stage but after certain development they stopped and just wanted to enjoy that success and gave room to Microsoft and Google.
Although I love your blog Jeremy, I would love it even more if you would proof your work. Even just a little. It’s quite distracting to read something with so many grammatical errors, mispellings and the like. That said, I know I’m being picky, but I think the enjoyment level of your blog would be greatly enhanced by paying a bit more attention to the details. Anyway, that’s it — otherwise, this is really great stuff.
We have evolved past grammar here. Welcome.
Great post — But Shoe — Your comments system right now is a damn PAIN!!!
I read all comments, but like most people i read from the top to the bottom.
Your comments are the wrong way round, with newest at top
So its hard to follow.
If this is a SEO thing – think of your readers before the engines!!!
Cheers.
Just goes to show that *acting* is much more powerful than *reacting*.
Do you really think Yahoo! selling out to Microsoft is Yahoo! playing defense? I feel it’s them trying to attack, but it’s too little too late.
Yahoo was playing defense years ago….. this is a desperation move.
Now they just want to beat Google and for that they are even making partnership with their old rival to beat new one …. lollzz
Yes i agree with what you are saying Shoe ..they started playing defensiv years ago ….
They are getting desperate, them selling out to Microsoft is the only way they can compete with Google now. Google is too big to take on alone.
Yup I agree with you bidet
Great post. It is so easy to buy something but so difficult to make it to succeed. Most mergers fail, because the cultures are impossible to put together.
The internet world is all about innovations, about your own innovations, but it seems to happen that when an innovative company grows bigger it starts to play this ” big boss game ” and use company jets, talk like big bosses and to buy other companies just to show that they now belong to the elite.
Jeromy, how correct your attitude is, just keep it!
Cheers for a very interesting and inspiring article. As always, innovation is everything.
You’re so right. Cheers for this very interesting and in-depth post. Really enjoyed it.
lol, i agree with you in this one
OMG…….dnt tell me you used the desktop tower defence image! I spent 3 hours before even realizing it!
lol you are the first person to notice… it took me a while to get enough money to make the $ without dying and only u noticed =(
Wrong! First to mention it, not first to notice… I thought it was too obvious to mention, since you have already written about your love of DTD in the past – in fact you even had a competition for it!
lol …ahahhaaaa
Playing Defense will take you no where ….great post… it’s wonderful
Yahoo Inc. is not good player in search engine industry all of us agree on that – but they are the best one in email marketing industry and these days it has reached a deal to buy the Arab online community Web site Maktoob.com for undisclosed terms. it will be able to offer Arabic versions of its e-mail and messaging services.Maktoob has 16.5 million unique users, Yahoo said.”This acquisition will accelerate Yahoo’s strategy of expanding in high-growth emerging markets where we believe Yahoo has unparalleled opportunity to become the destination of choice,” Yahoo CEO Carol Bartz said in a statement
yes you are right Mohamed
Shukran awi
Yah ayouni
Wow pretty clever, I read but did not notice until TheAnand pointed it out
Your right. Thanks for posting this
At least Google’s losing money with youtube. Lol..
Go go Yahoo!
GOOGLE’s service is so great and it deserve the champion in search industry. Bing now looking good, especially I like the Bing image search.
I’ve always used Google’s search engine over the others since I started using the internet. Google is the better search engine by miles for me.
hmm.. i agree with you…
wow this is great post shoe. Thank’s for sharing
Yup that’s fairly true that hiding thing from competitors will not lead you to new successes the most innovative companies expose there creative things and ask for comments to make them more better companies.
Thanks for sharing this information.. good work
I know you guys have “evolved past grammar”, but Jeremy your posts could have a bit more impact with some editing. I edited this post for no good reason; meanwhile I guess you made about $2000
Many times once people/companies achieve success they put up walls to hoard and protect their spoils. But those same walls prevent you from making progress and parlaying your success into something bigger.
About 2 months ago I wrote about playing with the houses money. In that post I talked about my numerous experiences leveraging successes into bigger and better things.
Recently I have gotten tons of emails and comments asking for my take on the whole Yahoo selling out to Microsoft.
I think this is a perfect example of what happens when you play defense.
Lets first go back in history for the peole who don’t know.
Yahoo Search was originally powered by Google Search and monetized by Google Adwords. In 2001 Google’s Co-founders offered to sell the search Engine to Yahoo for 1 Billion dollars. Yahoo passed on the deal.
In 2002 Yahoo purchased the Inktomi search engine.
In 2003 Yahoo purchased they purchased Overture Services, Inc., which owned the AlltheWeb and AltaVista search engines. Overture also had a great revenue generating “in search results” contextual feed.
In 2004 Yahoo came out strong with its own search engine now utilizing the purchased companies algorithms and monetization of the contextual feed. Yahoo’s search monetization product (overture) was so strong that it was also powering Microsoft’s Search.
But it all went down hill from there as Yahoo! went on the defense. They never again would make a serious move in the search industry. As years passed by Google and Microsoft came out swinging with new products to greatly increase (and sometimes decrease) the user experience. But Google and Microsoft kept trying to build a better product.
Yahoo! sat on its ass and steadily lost market share and also Microsoft as a client for its overture product.
Last year they even gave up on their own product and started mixing in Google Adwords to monetize their own search results.
Now in their recent deal with Microsoft they are giving up search results on their core properties and basically gutting the companies core.
All because they decided to settle and play defense.
I think Bing is a great product and now that Google is the new Microsoft in terms of anti-trust watch dogs Microsoft is in a excellent position to gain some serious market share.
Playing defense gets you no where. Yahoo should have hedged its bet and purchased Google way back in 2001. Ya I know what your thinking… “Sure its easy to say that now”. But cmon Yahoo was POWERED by Google then.
Yahoo also purchased flickr which is a pretty awesome service…. but what are they doing with it? Nothing….
Yahoo also purchased delicious bookmarking service but what are they doing with it? Nothing….
Meanwhile there competition is passing them by.
But lets get off Yahoo!. At every conference I run into a new kid who tripped over a rock and fell into a pile of money. Lets say its with promoting weight loss… or dating… it doesnt really matter… Its always the same story.
But instead of leveraging their position and playing with the houses money they put up walls…. and when they go broke they start a blog or contribute on forums and become super bitter because nobody pays attention to them.
Are you playing defense?
Great, your blog stripped all my punctuation anyway! Haha…here it is on Google docs
http://docs.google.com/View?id=dd8wq8td_35fk3ht4dx
Is that true that Yahoo will collaborate with Microsoft so compete with google in online advertising?
Google make a lot of progress so far especially with their lab tools that I think really usefull for me.
They are now really desperate and want to get back their lost share …
For that they have collaborated with Microsoft as well.
Money, Money Money… Everything is for money
Everybody talks about money.
Sometimes when you find yourself in a financial pinch, you realize all you are really doing is playing defense. Sometimes you can only work with what you have and hope for the best. I’m sure Yahoo thought they were making the wisest decision they could with the information they had at the time.
Follow me @ http://www.twitter.com/krenee76
I made that same mistake in the past. When a site ranked well I moved on to the next and shielded the ranked one off.
Just doesn’t work.