Who wins the Race the Tortoise or the Hare?

Yahoo has been sitting on the sidelines while Google gobbles up some prime online real estate. Yahoo is just now launching their long delayed search application called Panama while Google announces a new application just about every week. What's the problem at Yahoo? I call it decision constipation. eBay and Google live by the Mantra "make quick decisions and fix the problems as they develop" While Yahoo takes the much more conservative approach of a traditional business.

Who has the best approach? The Tortoise (Yahoo) or the Hare (Google, eBay)I think both approaches have their positives and negatives. Yahoo's approach to software development is a negative. Software will never be perfect and if you continue to delay product launches you will fall behind the rest of the marketplace. eBay launches applications quickly and fixes them as they find problems. While this approach is occasionally bad for buyers and sellers it hasn't affected eBay in the marketplace. Google launches applications in Beta form while it continues to mold and form the program. This approach has been a big positive in the Marketplace.

On the acquisition front though, I believe the roles are reversed. EBay made a quick decision to purchase Skype and they paid heavily for a business that may never materialize. If you look at eBay’s purchase of PayPal though that was made after many years of trying to compete with them (more of a Tortoise than a Hare). Yahoo on the other hand hasn’t made a market changing acquisition since Overture, which in my view saved their business.

Yahoo would be better served to speed up their development of applications to compete with Google and Microsoft than to purchase online dinosaurs like AOL or infants like Facebook. The “Tortoise” approach to M&A is the right approach. Yahoo needs to be a developer first and a buyer only if a market changing application becomes available. They would be far better off buying 10 low priced technology startups and developing their applications than making a huge purchase like AOL or merging with eBay. But this approach requires them to speed up the launching of applications.