As near as I can determine, the major mistake Yahoo made in America (not that they didn’t make a whole collection of them, but this IMO is the biggie) was an apparently deliberate decision, some time around 1998, to cater all of their services primarily for people who don’t understand the internet AT ALL. The problem is, while there were a ton of people like that getting on the internet in the late nineties, there aren’t really so many now, especially in the English-speaking world. Oh, sure, there are still millions of people who don’t know anything about the internet, but they’re not getting on the internet and trying to use it like most of the people who didn’t understand the internet in 1998 were doing. The people who still at this point don’t know anything about the internet are steadfastly not buying internet service (or even computers, in many cases), so they don’t constitute a useful market for Yahoo. Meanwhile, the people who didn’t know anything about the internet in 1998 but were using it anyway have learned and moved on, for the most part. (Many are still holding onto old Yahoo Mail accounts because they don’t want to change addresses or lose all their old mail, but that’s not a viable business model in the long term. Nobody’s creating *new* Yahoo Mail accounts except to use one time as throwaways.)

Facebook appears to have made a similar mistake, catering almost willfully to people who don’t understand social networking very well and haven’t really learned to manage their priorities, time, contacts, and privacy. This hasn’t hurt them yet. I believe it will.

Oh, don’t forget yahoo Japan finance is pretty big for them.