Risky Business: Yahoo!’s Logo Redesign

Yahoo! announced it will change its iconic logo on Sept. 4. For the 30 days leading up to the change, Yahoo has been featuring 30 different “runner-up” designs on its website.

This project may be the biggest mistake in Marissa Mayer’s nascent career. as chief executive officer. Logo changes rarely increase business; more frequently, they make CEOs look silly.

The last time a corporate logo change was so well publicized was when Indra Nooyi changed Pepsi’s logo in 2008. High-priced design firm Arnell Group was paid an estimated $1 million for the design. Arnell justified the expensive design with a 27-page document that compared elements of it to the Mona Lisa, the Parthenon, and earth’s gravitational pull. The logo change bombed with consumers, and Nooyi spent months defending the move.

In 2009, Tropicana orange juice redesigned its label in an attempt to become more contemporary. As soon as the new design hit the shelves, Tropicana sales declined by 20 percent. Embarrassed executives of PepsiCo, which owns Tropicana, hastened to bring back the old design after significant business losses.

While Yahoo’s design team might do better, the problem is that consumers don’t like to see their favorite brands change, so there is little upside and a big downside in redesigning the logo.

Mayer has done a great job of housecleaning at Yahoo, and the company is back on the uptick. Chief Marketing Officer Kathy Savitt says the new logo is meant to symbolize “a renewed sense of purpose and progress at Yahoo.”

This may motivate employees, but logos are supposed to create a brand identity for customers. Yahoo’s loyal users already like Yahoo as it is, and it is their patronage that pays the bills.

There are instances in which logo changes are necessary and add value by eliminating negative images of a brand. In 2008, Wal-Mart wanted to improve its image with women, so it changed its logo from harsh black corporate block letters to a softer, more feminine design. Despite some initially negative reactions, overall response to the change has been positive.

Many brands and companies regularly update logo designs to keep them modern, but they do it gradually and discreetly. The best logo changes are never noticed by consumers; they just gradually evolve. KFC (owned by Yum! Brands) has successfully upgraded its logo several times, moving away from images of old man Colonel Sanders to a more modern-looking Colonel, allowing the company to heighten its appeal to younger consumers.

Yahoo may not have engendered the passion some of these brands have stirred, but it has a distinct logo that is fun and contemporary. Poor management—not the logo—has been the source of Yahoo’s recent struggles.

Of Yahoo’s new designs, most seem to be less fun and innovative than the old logo. They are different just for the sake of being different. That’s the wrong reason to change a logo.

The online polling company Polar is asking visitors to rate each of the new Yahoo logos vs. the old one. With over 107,000 votes in, only one design out of the new logos has outpolled the original: Day 10, which is winning 69 percent support, vs. 31 percent for the current logo. All the others are flopping, with designs from the past two weeks getting progressively worse results in the poll.

The best-case scenario for Yahoo is that no one cares about its logo and the change goes through without incident. If that happens, it will be a sad indicator that Yahoo lacks passionate users. The alternate scenario is that the new logo causes an uproar and Marissa Mayer spends the next three months doing damage control.

Let’s hope Yahoo decides just to keep its old logo and skip the drama.