Yahoo! tries to stem hemorrhaging with new b-to-b chief

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In a bid to increase its b-to-b clout as a way to emerge from a pool of red ink, Yahoo! Inc. has hired James Fanella as senior VP-business and enterprise services, a new position.

Fanella, who will join Yahoo! later this month, was group president of software developer Commerce One Inc. He will oversee all of Yahoo!’s b-to-b businesses, including Corporate Yahoo! and Yahoo! Broadcast Services, which recently launched a Webcast platform aimed at marketers.

Yahoo! faces a huge challenge extending its brand to b-to-b and is doing so to make up for weakness in its flagship consumer business, said Dave Wilson, director of Crimson Consulting Group. "Yahoo!’s consumer franchise isn’t strong enough, and they need to go into b-to-b," he said. "But their brand is too consumer-centric, and it will be hard to do."

Another analyst said b-to-b client dissatisfaction drove the company’s move to hire Fanella. "[Yahoo!’s corporate platforms] were tested at a lot of Fortune 500 companies, and there was a lot of discussion that Yahoo!’s follow-through wasn’t there," said Dan O’Brien, senior analyst at Forrester Research Inc.

Technology overload

O’Brien said Yahoo!’s b-to-b services have suffered from too many technologists and not enough marketers, and that Fanella’s arrival could change that. "They haven’t had a strong marketing lead. It’s a smart move."

Fanella, who was with AppNet Inc. when it was snapped up by Commerce One last September, oversaw Commerce One’s consulting services. He advised Fortune 500 clients on b-to-b interactive marketing and e-marketplaces—skills that will come in handy at Yahoo!, a neophyte in those spaces. Fanella, who will report to Yahoo! President-COO Jeff Mallett, could not be reached by press time. Yahoo! declined to comment.

Sunnyvale, Calif.-based Yahoo! laid off 429 employees, or 12% of its work force, earlier this year. It has recently seen the departures of Karen Edwards, longtime VP-worldwide marketing, and sales head Anil Singh. Yahoo! reported a net loss of $48.5 million in the second quarter, compared with a net profit of $53 million a year earlier.

It is also seeking increased b-to-b exposure through deals with SAP AG. It recently entered a pact with the Walldorf, Germany-based company to co-market Internet portals that bear Yahoo!’s familiar corporate brand.

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