Need for nimbleness

The interesting thing about the Microsoft-Yahoo merger to me is not that two companies that lost out to Google now are combining, but rather why they lost to Google in the first place.

 

Here is one common thread in the commentary:

"Yahoo management has not been nimble, Microsoft has not been nimble, Google has a management team that is nimble and dynamic."  - SF Chronicle

Over the past few years, "Yahoo became less nimble ... " -  Diab

"I'd add that since Google is a faster growing, more nimble company than Microsoft or Yahoo ... " - Techsmart

"Word has it that Yahoo's once nimble and entrepreneurial culture has turned sluggish and bureaucratic. The company's organizational structure and compensation system appears to be rewarding silo behavior that inhibits change."  - Steve Tobak

"... what some see as an inability to respond to more nimble (though considerably larger) Google" - CNET

Falling back into a "comfort zone" and building mechanisms (bureaucratic or otherwise) that "ensure stability", is a typical human response to success.  In its time Yahoo had plenty of success and slowed their rate of change as a result. 

For a Internet service business where the "network effect" applies and there are "very low switching costs" for the end user.  It is critical that you respond to success by staying nimble and accelerating your rate of progress.  Otherwise someone else will see what you have achieved so far and take the initiative to eat your lunch.