Marissa Mayer: Yahoo is Staying in Ad Tech, Won't Sell Right Media

Key Exec Michael Barrett Says He's Sticking Around, Too

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Marissa Mayer has made one of her first big strategic decisions as Yahoo CEO, as the company announced it was not going to sell its ad exchange Right Media. Some execs under past leadership teams had pushed the company to sell Right Media; instead it will increase investment in the exchange and the company's other ad-tech assets.

Ms. Mayer's message was delivered in a telephone interview by Brian Silver, Right Media's chief, and Michael Barrett, Yahoo's chief revenue officer originally hired in June by former interim CEO Ross Levinsohn.

"We just want to go on the record... Yahoo is committed to being a primary player in the ad technology space and Right Media is part of that strategy," Mr. Barrett told Ad Age .

Michael Barrett
Michael Barrett

Mr. Barrett also confirmed what Ad Age prognosticated last month: he plans to stay at Yahoo despite Mr. Levinsohn's departure.

With the announcement, Yahoo is hoping to remove the cloud of uncertainty under which Right Media has operated for at least the last year as previous Yahoo execs pushed to work out deals for the exchange with either Google or AppNexus. The widespread perception in ad tech is that Right Media has fallen behind competitor exchanges from Google and AppNexus. Industry execs have previously told Ad Age that a majority of total ad inventory on the exchange is unsold Yahoo inventory and that the revenue generated from non-Yahoo inventory on the exchange is immaterial to the overall Yahoo business. Mr. Silver denied both assertions.

"Certainly [Yahoo is ] the anchor tenant, and it's great to have them, but it's a minority of the supply," he said. "People have been taking shots at Right Media for quite some time... and we've been a little quiet, but we're not going to be quiet anymore."

Right Media planned to publish a blog post Thursday morning highlighting improvements it has made to its platform since Mr. Silver came on board in January.

Mr. Silver said he has been meeting with Ms. Mayer weekly and stressed to her from their first-to-face that it seemed time that the company publicly backed Right Media.

"When I first met with Marissa, I told her, 'Hey, the last couple of months have really been very negative toward the future of our ad-tech stack,'" said Mr. Silver. "She said, 'Then we have to ensure that we get out there and tell them it's just not true.'"

Over the past two weeks, industry execs have told Ad Age that Ms. Mayer was likely to sign off on a plan to invest at least several hundred million dollars into Right Media and the rest of Yahoo's ad-tech products. Asked if that dollar range was accurate, Mr. Silver did not answer directly but hinted that future investments would be significant.

"Everything has to be relative to size. Obviously being as large as we are, with the established presence we already have, key decisions over the forthcoming period will both accelerate our efforts as well as make it easier for our core customers to do business with us," he said. "If you want to translate that into a dollar figure, go ahead."

Still, it's not completely clear why Yahoo feels that it needs to continue to invest in a platform that hasn't yet reaped the rewards it had hoped for when it purchased it for $680 million in 2007. Mr. Barrett said the company's senior leadership is aligned in the belief that a media company as large as Yahoo shouldn't "outsource the money engine of the company, the tech that actually converts demand from buyers into revenue," as he described it. So why not focus investments on technologies that only Yahoo will use rather than an open exchange? Mr. Silver said owning the exchange helps Yahoo bring in bigger budgets from advertiser clients who want to also reach users off of Yahoo.

Mr. Barrett said he will likely bring on some new ad-sales hires soon, but said the company hasn't decided how, or if, it will fill the role vacated by former North American sales boss Wayne Powers.

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