The Key to Yahoo's Long-Term Health? Data, Says New CEO

Scott Thompson on Seeing the World Differently and Why You'll Rarely Find Him at His Desk

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Yahoo today named PayPal President Scott Thompson as CEO after a four-month search and amid a sales process that may see the company broken up or sold for parts. He spoke with Ad Age this afternoon about why data was king at PayPal, why it needs to be the priority at Yahoo, and why you'll rarely catch him sitting behind his desk.

Advertising Age: As someone with a tech/product background, what can you tell the marketing community about your skill set that you think will transfer over to the content side of the business?

Scott Thompson
Scott Thompson

Scott Thompson: I'm a person who enjoys complex problems, swims around in the detail, a person with a tremendous amount of energy and a natural curiosity to understand things that inform good decisions, if not great decisions. A classic question I have asked in my career is : That's a good idea, but how do we get there from here? In my consulting days, I used to ask my team, how can you imagine getting there? How can you get there quickly?

I also enjoy people a lot. And hopefully that will be the buzz here as it was at PayPal. Not in a rah-rah-rah company way, but I have a natural desire to interact with people, understand what they do, understand what they struggle with. Unlike some people who enjoy being in their office all day, I can't actually sit in my office. At PayPal, I had a low-rise cube -- constant interaction results in constant stimulus and creates a buzz about getting things done.

So how does this translate to what it means for the business and the display business and where it all goes? If you've spent time covering us at PayPal, you know people said these guys are different, they see the world differently, and the products they're building are different. It's very innovative and as a result, very disruptive. That's who we intend to be.

I say this, and some don't believe it, but I genuinely believe we're in the early days on the internet and the impact it will have on people's lives. And if you're a media company, a display business that has 700 million people visiting its properties every month, playing in a space that 's evolving so quickly, growing fast, there's a chance to redefine yourself and recreate a really big brand for consumers and advertisers in a way that could be very compelling. What is it, Scott? you're going to ask. Just give me a bit of time to do what I do best: interact with the team to come up with a really compelling forward-looking plan.

So that 's who the heck I am.

Ad Age : When did you start talking to Yahoo?

Mr. Thompson: In November, I became part of the process and began down the path of meeting with board members.

Ad Age : What does Yahoo need to do to reinvigorate its core display business as Facebook and Google continue to gain market share?

Mr. Thompson: I would love to outline our strategy there, and the steps likely to be taken, but given that we're six hours into it ... it's a very valuable question and one I'll have an answer to and we'll have answers to, but it's premature to jump into that right now. I would be giving only my instinct and that 's really not fair. I understand that we need to answer that question and quickly. Speed is important and so is making certain I understand all the history to make sure the right answer will come out fast.

Ad Age : You mentioned on the call this morning that data will be a key to building better products for both consumers and advertising customers. We've heard about how great Yahoo's data is for a while, so can you give any insight into how it will be used differently going forward?

Mr. Thompson: Thanks for catching that . I think most people didn't get it or it went right by them. I think I can tie the loop for you in a meaningful way if you bear with me. At PayPal, we were able to create an unbelievably compelling business because we used data to understand risk and fraud better than anyone on earth. And that was the secret sauce. We had more data than anyone else, better tools and models, and super smart people who were challenged by the problem. It doesn't seem glamorous, but that was the reason.

I am more than 100% convinced that there is the same opportunity in the data that is the core of Yahoo's business. I don't know exactly what that is right now but I am certain that the battle of the next generation of internet businesses will be made up of who has more data and who knows how to use it better than anyone else. Naturally, then, I have a really keen interest in spending time with people who understand that . I'm not talking about your classic segmentation stuff. It's the segmentation of one and what the data of one tells you about what to do next. That's fascinating. If this business is going to be really successful five years from now, we'll get this right better than anyone else. As a result, the consumer experience will be better than anyone else's and the advertiser ROI will be, too.

Ad Age : Yahoo has made recent moves to cut out ad middleman in an effort to increase the value of its inventory. Is that a strategy that will continue going forward?

Mr. Thompson: That's a bit too detailed of a question to check in on today. I appreciate the importance of it, but any response I give you would not be appropriate today. It's one of those questions we can revisit in the near future.

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