In last few years we have seen the rise and fall of two technology giants Nokia and Yahoo. They went from being the market leaders to a sellout. What was the wrong with their approach?
When Nokia launched Nokia 6110 & Nokia 5110 in 1997 It was the King of the mobile market. They were the the largest mobile phone manufacturer for fourteen consecutive years and only lost this position to Samsung in 2012.
However, Success doesn’t last forever until you do not work hard to meet up the expectations of coming generations and understand the competition and keep analyzing the market.
Nokia’s CEO Stephen Elop ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. So he was convinced that they didn’t do anything wrong but the truth is that Nokia didn’t do the right thing i.e. to change with the time. When even phones started being smart, Nokia management didn’t. In the technological world if you won’t adopt the new technologies and would be ignorant of the changes around, you’ll finish sooner or later. Nokia stuck to their OS Symbian while the world was shifting to iOS & Android. They didn’t understand that timely and didn’t do anything to either compete them technologically or by adapting the Android. This resulted the market value decline of Nokia by 90% in just 6 years by the end of 2013.
Nokia killed it itself and so did Yahoo !
Nokia killed it itself and so did Yahoo! Yahoo was 27 times bigger company than Apple just 16 years ago. Yahoo was no. 1 in the technology companies and now Apple is the no. 1 and Yahoo is not even in the top 5. Their market cap was $128 billion in the year 2000. It was sold in just 4.83 billion after the 16 years. This was less than the 4% of its value in 2000 and the share value has decreased by 90% in the last 16 years.
Yahoo got 2 chances to buy Google in 1997 for just $1 million and then again in 2002 for $5 billion and could not accumulate the opportunity and did the same mistake twice. They could have bought Facebook in 2006 for 1.23% of today’s valuation i.e. $1.1 billion but they lost the opportunity here too. They were offered $40 billion by Microsoft in 2008 and they refused to be sold then.
Yahoo always stayed in the confusion if it’s a tech company or a media company and failed at both the parts. They bought Flickr in 2005 and just kept that to image sharing only and lost the revenues there. In 2013 they bought Tumblr and started giving the ads immediately and the angry users started quitting the website.
Yahoo couldn’t update it on the smart technologies like Google and Facebook kept doing and lost the battle..
Conclusion: Those who refuse to learn & improve, will definitely one day become redundant & not relevant to the industry. They will learn the lesson in a hard & expensive way
Dr. Hitesh Sharma
Digitize Software Pvt. Ltd. & Bless International Exports