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Yahoo Thinks It's Ready for VIP Status

There's a huge ego problem behind Yahoo's ID move.

Everyone who uses major web and mobile services feels the pressure of competing digital ecosystems. Major tech companies all want to establish themselves as the de facto standard (and then some) for whatever service they provide—email, web search, social media, navigation. The list goes on and on.

Doing so, however, requires tact. There's the Facebook (or Apple, or Google) way to do so: creating a product so valuable that it begins to feel irreplaceable, and then gradually nudging users to accept it in more parts of their life. And then there's the Yahoo way. According to a Reuters report, the company is planning to remove Facebook and Google log-ins from many of its popular web services like Flickr and Yahoo Sports in an effort to revive interest in the flagging Yahoo ID system.

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From a business perspective, there's sound logic to this move. Yahoo is a large web company that's been trying to recapture its cultural and commercial relevance ever since Marissa Mayer took over as CEO in 2012. Like any large web company, it has to give most of its products away for free in exchange for customer data. Simply letting its customers log into its services without a Yahoo ID stacks the deck in Facebook and Google's favor since those two companies get to hold onto the majority of the lucrative information.

Given Mayer's authoritative approach to leadership, I suppose the change in Yahoo's ID policy shouldn't come as a surprise. Remember: she courted another controversy shortly after she took over the reins of Yahoo when she summarily demanded that all employees begin working from the office again. "Anybody who couldn't, or wouldn't, should quit," Business Insider's Nicholas Carlson wrote of the news at the time.

An aggressive move, to be sure. But it was directed squarely at Yahoo's own employees. It's remarkably ham-fisted to approach customers with the same mindset—particularly coming from a company that's at a uniquely vulnerable moment in its history. Even Apple couldn't get away with forcing iPhone owners to start using its map app over Google or Microsoft's competing services. And that's Apple, the company that basically proved it could limit the freedom of its users and still leave legions of fanboys grinning ear-to-ear as long as they could keep insisting that the iPhone was the best device in its class.

Of course, the issue that Apple faced in that case was that its maps service wasn't best in class. CEO Tim Cook personally admitted that it was an inferior service that needed to be improved before the company could start tightening the screws again. Now that Apple is planning to step into the "smart car" game, many tech critics are wondering if its going to force its maps on customers once again.

Erecting stronger barriers between competing services isn't unusual, therefore. Nor is stumbling in the effort to do so. But that's the point that Yahoo seems to be missing: the company might have been on the same level as Apple or Google or Facebook at one point. But it's not anymore. Winning users back requires a degree of deference and humility; by demanding more exclusivity, they risk driving them away, to Facebook-owned Instagram or the Sports section in Google News. Yahoo may effectively be making a roadmap towards its own obsolescence.

Unfortunately, the company doesn't seem like it's interested in either of those traits. All a spokesperson would say in a statement given to the Wall Street Journal was that its new ID policy was designed to help it "offer the best personalized experience for everyone.”

Maybe forcing Facebook and Google users out of Flickr will genuinely improve the service. But we'll have to see how many people stick around to find out.