Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption

by Thales S. Teixeira

But beware: mounting too large a response also carries negative consequences. Not every entrant deserves diligent consideration and a response. When business model innovation is on the rise, as is the case of decoupling, responding to all startups would constitute a huge economic burden. Yahoo offers a cautionary tale. By 2012, when former Google executive Marissa Mayer became its CEO, Yahoo was an incumbent in the search engine space, the third-most-popular search engine in the United States in terms of market share, after Google and Microsoft. Worried about a continuing decrease in its rankings, Yahoo went on a multiyear shopping spree. As of 2016, Mayer had acquired fifty-three digital and tech startups, spending between $2.3 and $2.8 billion, not to mention countless hours of her top executives’ time for M&A due diligence. Yahoo eventually shut down thirty-three of these startups, discontinued the products of eleven startups, and left five to their own devices, failing to assimilate them. In all, Yahoo fully integrated only two of these startups.41 In 2017, unable to grow, Yahoo was acquired by Verizon for $4.8 billion, a far cry from Yahoo’s peak valuation of $100 billion.42 Overresponding can kill companies, just as failing to respond can.