Analysis and discussion of issues that impact business

Is competition a good thing? I guess it depends on who you ask. From the AP.

Yahoo Inc. is tackling its most difficult challenge since the dot-com bust with sweeping organizational changes aimed at cleaning up a mess of the Internet icon’s own making.

And stockholders are feeling it as much as anyone.

What's going on is way beyond pat answers.

Yahoo shares fell 57 cents to close at $26.86 on the Nasdaq Stock Market. Yahoo’s stock price has plunged by more than 30 percent so far this year, to wipe out nearly $20 billion in shareholder wealth.

Ouch! So what do the experts think is happening?

Yahoo has fallen out of favor on Wall Street largely because Google — the Internet’s search leader — has done a far better job of figuring out which ads are most likely to elicit clicks. That action generates more profits for Google and its partners while keeping advertisers happy with a steady stream of prospective customers.

Gee, more revenue versus less...

To compound its misery, Yahoo has been introducing a mishmash of products with no clear strategy on how they blend into the rest of the mix on its Web site. The scattershot approach appears to have aggravated and confused many consumers who are gravitating to new Internet hot spots such as News Corp.’s MySpace.com and YouTube, which Google just bought for $1.76 billion.

Never mind that both MySpace and YouTube push - and sometimes obliterate - the envelope with graphic and explicit content.

Sunnyvale-based Yahoo believes it can get back on track by consolidating its operations into three groups focused on its audience, advertising network and behind-the-scenes technology.

That includes a management shakeup, and the possibility of significant payroll reductions.

Yahoo spokeswoman Kelly Delaney declined to comment about the chances of future layoffs, but (Chairman Terry) Semel downplayed the possibility in a statement posted on the company’s Web site.

So competition, much like rain, can be both good and bad. One farmer gets the precipitation he needs, one parade gets rained on.

The ups and downs of the business "ecosystem". Only the brave need apply.