Yahoo! Year in Review 2009 - Market Darlings
Market Darlings
In a year of bank bailouts, tanking auto giants, and the collapse of many smaller—but well-loved—businesses (Mervyn's, Eddie Bauer), the few bright spots stood out even more. Not coincidentally, the businesses causing the biggest online clamor were all about improving communication. Think Twitter, Facebook, and LinkedIn (a timely resource for the unemployed masses). Tech toys made the list, too, as did language-learning software and shops designed to help consumers stretch a dollar. Read on for the whole scoop.
—Amy Weaver Dorning and Michele Meyer, Y! editors
1. Facebook
Friending is free, but a Russian firm got a whole lotta Facebook love when it invested $200 million in the social networking site this year. Even bad news—phishing attacks, being blocked by the Chinese government, and a less-than-flattering depiction of its founder—did not slow Facebook's growth (now valued at $10 billion, with 300 million users).
The website's busy year included partnering with Microsoft and Nintendo and acquiring startup FriendFeed, but its biggest accomplishment was turning a profit for the first time in its six-year existence. While some question Facebook's future, small-business marketers love it. So does Hollywood. Coming soon to a theater near you: "Facebook: The Movie." —MM
2. Twitter
This year's social-media sweetheart made a splash (literally) when a Twitter user posted the first photo of the US Airways Flight 1549 evacuation in the Hudson River. A few months later, even more folks were introduced to the microblogging service when actor Ashton Kutcher challenged CNN to see who could get more Twitter followers.
The company made headlines all year long, thanks to account hijackers, tweeting astronauts, White House updates, Iranian election protesters, overly revealing politicians, and Balloon Boy. "Daily Show" host Jon Stewart and Doonesbury creator Gary Trudeau turned Twitter's ubiquity into parodies that begged the question many had begun to ask themselves: Were all five billion of those tweets really necessary? —MM
3. Hulu
Hulu's "evil plot to take over the world" seems to be going smoothly. So how exactly is the video site luring TV viewers from their sets and getting some to cancel their cable service altogether? One word: free. Hulu's ad-funded business model and growing number of content providers means free TV shows and movies for its audience, and its user-friendly interface has made the site stand out among its competitors.
So when a stakeholder said that Hulu would probably start charging users by 2010, a ruckus predictably ensued. Hulu has since qualified that statement, although its "capitalist" CEO said he's "very bullish about the future of Hulu." Our advice? Watch all the free "Family Guy" while you can! —MM
4. Bing
Bing, Microsoft's new search engine (or "decision engine," as the company calls it), launched in June to much marketing fanfare. TV viewers chuckled knowingly at its commercials, featuring poor souls suffering from "Search Overload Syndrome," an affliction that Bing would undoubtedly cure them of.
But clever commercials aside, are people actually using Bing? Yes—9.4% of people, in fact. And once Yahoo!'s search pages are "powered by Bing" (thanks to a deal inked in July), that figure might increase to 28%. And just why was the name "Bing" chosen? According to CEO Steve Ballmer, because it can "verb up." So will "just Bing it" become a household phrase like "just Google it"? Only time will tell. —MM
5. iPhone
Last January, Apple followers and investors were shaken when CEO Steve Jobs, a pancreatic cancer survivor, announced that he was going on a six-month medical leave due to health problems "more complex" than originally thought. Some wondered if he would ever return, and how his absence would impact the once-struggling company that he revived with innovative products like the iPhone.
But return he did, and this time with a new liver. And during Jobs' absence, the iPhone line got its own new additions: OS 3.0 and the 3GS model. With 6.4 million active users, the iPhone certainly has no shortage of fans—or fan-created apps. But with the recent release of Google's Android 2.0 OS, some wonder if the iPhone has finally met its match. —MM
6. LinkedIn
Pink slip? Get LinkedIn. In a down economy, the "grown-up" social networking site ballooned to 50 million members (someone joins every second, including ex-Alaska governor Sarah Palin) in more than 200 countries. It's also worth a cool billion, give or take. Since its '03 launch, LinkedIn has built its ranks more slowly than Facebook or Twitter, but it has one thing the trendier sites can't claim: profits.
The career-minded site has been thriving on the recession by embracing the newly jobless masses and connecting them with people who can hire them (executives from every Fortune 500 company are on LinkedIn). Shrewd moves like recent linkups with BlackBerry, Microsoft, and Twitter keep the company looking forward as the economy starts to brighten. —AWD
7. Dollar Stores
No shocker that the recession has been good to the humble dollar store. Market-watchers noticed the trend early in the year when shares of Family Dollar—one of three national chains—surged 14% after reporting better-than-expected earnings.
In fact, all three major dollar chains bloomed in the economy's arid soil this year, not only by selling the cheap goods they're known for, but by changing with the times: accepting credit cards, adding food items like eggs and milk, and, in an effort to reach out to their loyal customer base, honoring food stamps. Can the trend last as the economy recovers? With many consumers claiming that the hard times have changed their spending habits for good, it doesn't look like dollar stores will be going away anytime soon. —AWD
8. Palm Pre
Palm once ruled the handheld universe. To revive its sagging image (not to mention its fortunes), the hardware company unveiled its much-hyped Pre smartphone in June at a consumer-friendly $199. The follow-up to Palm's successful Treo became a hopeful rival to the iPhone (one tech blogger even called it "St. Paul following the iPhone Jesus"). Despite much buzz and many glowing reviews, the Pre didn't touch Apple's market and now has fallen into third place behind Google's Android.
Still, the media frenzy surrounding the release gave the titan a much-needed boost. Besides, Palm modestly claims, it never really meant to take on the iPhone—probably a shrewd position, since, as the NYT puts it, "Palm is a mouse in a land of cellphone giants." —AWD
9. Rosetta Stone
When shares of the language software company's stock shot up 40% in one of this year's most successful IPOs (yes, there were IPOs in '09), Wall Street took notice. Rosetta Stone's product is everywhere—from late-night infomercials to Barnes & Noble to malls.
But who exactly is paying $500 (the cost of a typical three-stage program) to learn Italian in this economy? Unemployed folks looking to add skills to their portfolio, for one. The U.S. government is another sweet source of revenue for the company, which uses a specialized program to teach soldiers military terms in Arabic. Can Rosetta's rosy glow last? Experts say not likely, since competition will probably level the playing field. But in 2009, success tasted molto dolce. —AWD
10. Kindle
Despite Amazon's legal scandal involving copies of Orwell's "1984" being digitally snatched away, the Kindle is a 2009 success story. The February debut of the new and improved e-reader (the original Kindle came out in 2007) may have been met by skeptics, but the "early adopters" (i.e. college students and gadget-loving readers) snapped it up, and suddenly the sleek handhelds were popping up in dorms and on public transit everywhere.
Despite the fact that Kindle may (or may not) eventually replace "real" books, the public is warming up to reading on a screen (or on their iPhones), and media moguls are rushing in to set up competing e-readers to preserve their own digital publishing future. The biggest threat to the Kindle? Barnes & Nobles' new Nook. —AWD
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