Playing Defense Gets You No Where

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?