Yahoo Has Traffic; Can Yang Give It an Identity?

As New CEO Takes Helm, It's Unclear if Company's Focus Is Search or Content

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NEW YORK (AdAge.com) -- Google Yahoo.

Really, go ahead and Google it. The first result, Yahoo.com, comes with this description: "Welcome to Yahoo!, the world's most visited home page."
Jerry Yang, Yahoo's co-founder and now CEO
Jerry Yang, Yahoo's co-founder and now CEO Credit: Tony Avelar

Therein lies the company's problem, believes Tom Ordahl, a partner in branding and strategy firm 1066. It's not quite clear, he said, what Yahoo stands for, outside of, well, size. (Mr. Ordahl advises all his clients, including Microsoft, to "Google" themselves as an exercise in branding.)

Figuring out the company's identity and mission will be co-founder Jerry Yang's biggest test as CEO, a title he assumed last week as Terry Semel stepped down after a six-year reign. Is it a technology company trying to catch up in search or a media company that delivers Wall Street's largest profit margins on the planet?

"The current trend for digital-media companies is to swing back toward an emphasis on their users and what they want beyond content," said Jeff Marshall, senior VP-digital managing director at Starcom/Pixel, in an e-mail interview. "The vision is to marry tools [such as] search, IM, e-mail, etc., communities [such as] Flickr, Answers, etc. and content in ways that build audience and usage."

Visionary and motivator
Yahoo has built a strong reputation for service and ad friendliness under Mr. Semel and his appointees, most notably Chief Sales Officer Wenda Harris Millard. After a career as a deal-maker and operator, Mr. Semel was not known as particularly web savvy, occasionally appearing at a loss for words when asked about things like web properties that inspire him. Several Yahoo veterans who spoke to Ad Age for this piece called Mr. Yang a passionate yet unaffected visionary and motivator -- an employee favorite who could attract talent at a time when Yahoo has been bleeding it.

Confounding Yahoo's identity crisis is its other big problem: that it's not Google. While Yahoo appears to have trouble articulating a clear vision, Google doesn't. It may dabble in myriad other ventures, but the Mountain View, Calif., giant is still known for search -- a cash cow that the Street adores. To try to catch up, Mr. Semel spent the past year and a half investing heavily in Panama, a search platform that would monetize searches better. Yahoo responded in a statement that said it is "executing a clear strategy to deliver long-term value to our shareholders" and pointed to partnerships, the Right Media acquisition and investment in emerging areas as evidence.
Terry Semel stepped down last week after a six-year reign.
Terry Semel stepped down last week after a six-year reign. Credit: Fred Pouser

Unfortunately for the company, Panama brought Yahoo closer to par with Google, but nowhere near surpassing it. And sometimes the comparisons also follow Yahoo onto Madison Ave.

"No doubt about it," said Steve Minichini, managing director of digital ad agency IMC Squared, New York. "My media team compares the two all the time."

Google envy
One former Yahooer, who talked only on background, said that while Google envy runs rampant on the Sunnyvale campus, it would be hard for Yahoo to figure out exactly what it is.

"It's part perception but unfortunately [perception] ends up being reality," said Erik Qualman, senior marketing director at Travelzoo and another former Yahoo employee. "They get more traffic than Google so why does Google get all this love?"

That's a good question, considering Yahoo leads Google in many key areas, such as mobile, community tools, content verticals and mail. Yahoo's Flickr, for example, is regarded as one of the best photo-sharing sites on the web with 12 times the users as Google's Picasa, according to Nielsen/NetRatings. Yahoo Answers has thrived, with 18.4 million users while Google shuttered its question-and-answer service. And the 14.7 million users of Yahoo Finance spend almost 26 minutes on the site, trouncing the 1.2 million users of Google Finance who spend just over nine minutes. Google, through YouTube, has an early lead in video, but Yahoo has twice as many mobile-search users. Not to mention Yahoo has what advertisers most want to buy: a big audience.

If Yahoo can do a better job of integrating those assets for advertisers, especially search and display advertising, the sum of the parts may indeed add up.

"I do get the sense the portals are at an inflection point," said Chris Portella, associate media director at Organic. "They've made huge acquisitions. ... Now they're ... figuring how best to monetize those and also how best to sell integrated packages."
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