Why Open Innovation Could Be Marissa Mayer’s Downfall At Yahoo!

Most business pundits share the opinion that Marissa Mayer, the newly appointed CEO of Yahoo! and a former Google engineer, will bring an open-innovation agenda to the struggling Internet giant. They have good reasons for thinking that. Mayer has been an advocate for openness. But Google’s scattershot approach to innovation, which Mayer helped to champion, may not play well at Yahoo!

Yahoo! has a number of troubles, but closed innovation isn’t one of them. If anything, Yahoo! has listened too much to everyone. The company has done way too much, over-innovated, tried to be everything for everyone, buying up companies here and there based on user feedback. What the company has lacked is a clear direction forward from stubborn, single-minded visionaries at the very top, who make the right calls and focus on what strategically matters. Open innovation, in the broad sense that Mayer promotes, is more the cause of Yahoo!’s problems than the cure.

But Mayer is smart. If she takes the right lessons from Google’s success, she’ll recognize that open innovation isn’t much more than a PR tool. Why? Google’s real success has very little to do with open innovation. the vast majority of Google’s revenue is from search-related advertising, an idea Google’s founders thought up during their university years. Despite its phenomenal success, Google remains a one-trick pony. Its strength is the ability to keep its main focus on its search engine and search-related services. None of the beta experiments, the free-thinking Fridays, and all the other innovation-yielding exercises has resulted in significant new revenue streams.

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