By being very expensive to run. In 2016, they had 8500 employees. In comparison, the 5th most popular website (reddit) has <250 and has not exactly been the greatest financial success story either.
The primary business that Yahoo is in is really content production. And content production just isn't as high margin as search.
It's just a sign of corporate rot. Yahoo doesn't do anything nearly complicated enough to warrant that many employees. And I'd be willing to bet more than 1/3 of them are "managers". Cull the non-engineer/product/design people I say.
I don’t see how it would be possible to have that many good engineers left at Yahoo. I would think that most of the good ones left a long time ago and they are suffering from the “Dead Sea Effect”.
When I was there (2005-6), there were many layers of management between me, a developer, and Terry Semel, CEO (IIRC, it was more than 10, possibly even 15.) Often it was like working in Brazil (the film).
Ouch. That really sucks. They also had soooo many services its hard to keep up when you rarely go on their site to begin with. Like years ago you could watch some shows off their site. I found out through a college professor. I never bothered trying to watch anything off their site though. I dont know what the answer should of been for them but 8k employees sounds crazy. Tumblr was a decent investment but I suppose without properly putting ads on it, it really didnt return much.
Yahoo had everything from an IM service, mail, hosting, groups, fantasy sports stuff, Geocities once the defacto free site host of the internet, their own web browser at one point iirc and loads more.
The primary business that Yahoo is in is really content production. And content production just isn't as high margin as search.