In the early days of Yahoo and Google, around 2003, the distinction between the two companies could have hardly been greater. Yahoo made its strategy bet on being a media company. It employed a cadre of editors to shape content and feed it to the nascent novice internet users who wanted a guiding hand in their insatiable search for news on Tom Cruise or MC Hammer or whoever was popular in those ancient days. This strategy worked wonders as long as the users needed help. Yahoo grew to be a giant.

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In 1987, Michael Porter, then a young academic from Harvard Business School, published a piece called “From Competitive Advantage to Corporate Strategy” (HBR, May-June 1987). While business unit strategy deals with achieving competitive advantage in a given industry (the hallmark of successful competing skill), corporate strategy deals with the question of what industries/businesses the company should be in, and how to manage the portfolio of businesses. These are two very different competing skills.

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