Ross Levinsohn: Yahoo's Future Is Content and Big, 'Beautiful' Ads

Executive Says Portal Doesn't Need More Journalists, but Will Spend More On Video

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Seven months after Ross Levinsohn replaced Hilary Schneider to head up the company's Americas division, the former News Corp. executive told Ad Age about his plans for Yahoo's future.

Ross Levinsohn
Ross Levinsohn

Ad Age : Now that you've had the chance to evaluate the company, what are the challenges it faces going forward? What's working? What's not working?

Ross Levinsohn: After six months, I'm not surprised by much. I knew this company pretty well before I came in. I competed against it for pretty much my whole internet career, and when I had the chance to come here, instantly, it was a "yes" for me.

Ad Age : Why Yahoo?

Mr. Levinsohn: You look at these assets and these properties, and there aren't two properties in the world that have the reach and the canvas this place has.

Ad Age : So how are things at Yahoo then?

Mr. Levinsohn: Some things are better than I thought, more traffic gets moved to areas than I've ever seen before. Every internet company I've been at, I've never walked into a situation where there was so much built already. The infrastructure, the systems, the technology.

Ad Age : So what's not working?

Mr. Levinsohn: First, there are amazing people. There's definitely some tweaking that needs to go on -- a shift that needs to happen to push the company agenda in how we engage people. I was pleasantly surprised the way users interact on Yahoo was better in some cases than I thought, but I was equally surprised that some of the systems weren't where they were supposed to be.

Ad Age : Such as?

Mr. Levinsohn: Not getting into that just yet. I'm still only six months in.

Ad Age : How is it working with the product chief [and former Microsoft exec] Blake Irving?

Mr. Levinsohn: After my first month, I got deep with Blake and his team. To see what they're doing, the transformation that goes on in those groups, what they're solving is pretty amazing. And it's not a one-day solve. It's rolling out every month -- we're moving all of our sites onto a single global platform. Instead of a bunch of engineers that runs a site, you have a template where editors can push out sites on their own.

Ad Age : So what is Yahoo's strategy moving forward? Technology? Content? What?

Mr. Levinsohn: To be the premier digital media company. We're No. 1 or 2 in 19 categories. That's insane! That doesn't exist anywhere else in the world. You embrace that . You support that . We're focused on premium content. Some of it's original, some of it's curated, some of it's aggregated. And we're focused on premium advertising. Of course, that doesn't mean we're not focusing on search, of course we are. And it doesn't mean we're not doing mail. But when you look at ... where are we winning more than anywhere else, it's our owned-and-operated properties. We're building experiences in OMG or Sports or Finance. And we have the scale that no one else has. And we have the canvas for advertisers. We're not talking about text links. We're talking about beautiful ads.

Ad Age : So, tools, more content and ads. Sounds somewhere between AOL, which is all content, and Google, which is all tools. But it appears that content is the underlying strategy.

Mr. Levinsohn: I worked at CBS in the late '90s, and I remember sitting in meetings with both advertisers and digerati and everyone was saying network TV is dead. So here we are, 14 years later, and last week you had as strong an upfronts as we've ever had. It proves one thing: If you put great content in front of people, and you are able amass lot of audiences because to that content, you can bring great advertisers there. We've got huge masses of people. We've got good properties that are getting better, and we have incredible data on people, which the TV networks don't have.

Ad Age : Like everybody else, you're going after TV ad dollars.

Mr. Levinsohn: Compared to TV, on the internet there's a gap of two times between ad dollars going to it and time spent on it, and that gap is like $50 billion dollars, and it's mostly brand advertising. Traditional media brand advertising is 65% to 70% spend; online it's like 28%. You've got a huge margin. Those brand dollars, in my opinion, are going to look for safe environments that they don't have to worry about where their ads are running. They're going to look for scale and ROI and that 's targeting on consumers, and we got all of that .

Ad Age : You've mentioned OMG, Sports and Finance, top media brands on Yahoo. Are you guys planning on building out anything else?

Mr. Levinsohn: We've been the best aggregator of content ever on the internet. I'm organizing our group around what in a media sense is pretty easy to understand: anchors and tentpoles. Every network has done it. Anchors are things that happen every year -- they're the Grammys, the Emmys, CES, the Super Bowl, the World Series. We've never ever looked at the world that way. We've never packaged it and programmed it aggressively. Then there are bigger events, tentpoles likes the Olympics and the presidential campaign -- events that get bigger audiences than even some of the anchors.

The Japan tsunami became a tentpotle. We did a billion page views in covering the Japan tsunami in the first three days. It's virtually impossible for most sites to do a billion page views in a month or even a year. So you have to program and package off of that .

Ad Age : That's more of a strategy to capitalize on what you're already doing content-wise. Anything you're looking to build out?

Mr. Levinsohn: We got to add some voice here; Yahoo is a great aggregator, but it's only been a few years since we've started adding our own content in an original way. With sports we did a billion page views on our blogs in a quarter.

Ad Age : So then more original voices? More journalists?

Mr. Levinsohn: It's a balance. We have deals with so many people already we've been able to aggregate so much good content, I think we can supplement in the right places. I don't think it's wise for us to hire hundreds of journalists and double their salaries. I don't think it's wise to hire thousands of local journalists and pay them $25,000. But I do think we can have distinctive voices in certain categories. We have a big political season coming up. We had the No. 1 politics site in the U.S. in the last campaign. We should have some original voices in entertainment and finance, and we do. And we will leverage these bases.

Ad Age : So then where will you spend?

Mr. Levinsohn: If you told me, "Hey Ross, you have a dollar to spend," I'd spend it on video. We have 700 million people coming to our sites. Video will drive the share-shift in advertising.

Ad Age : When you said "video," you mean on original content? On infrastructure? On sales staff?

Mr. Levinsohn: Yes.

Ad Age : Advertisers say there's not enough video content they can buy against. Wouldn't it make sense to focus on that ?

Mr. Levinsohn: We already have that . Last month we did 630 million video views. We're No. 1 in sports and finance, and we're twice the size of TMZ in entertainment news.

Ad Age : I had no idea.

Mr. Levinsohn: In all candor, we do not surface this stuff well at all. Now we've got to program better. We've got to surface this better. We do 20 original videos a month -- we have more viewers a month than Hulu.

Ad Age : Hulu is an interesting example. Given the size of your audience, Yahoo could make an attractive place for those networks to park their content once their contract runs out with Hulu.

Mr. Levinsohn: I was part of the creation of Hulu -- and I don't in any way mean to take any credit away from Jason [Kilar] and what he built. He's done a great job there. I think they've built a good enough brand on their own and good enough experience for their consumers that . Let me put it to you this way: I don't think Hulu is going to have exclusive rights on "30 Rock" anymore. In six months to a year from now "30 Rock" is on Hulu, it's on Apple, it's on Amazon, it's on Netflix, but I don't think people are going to abandon Hulu because other companies have that show.

Ad Age : What about Netflix?

Mr. Levinsohn: We're not going to compete against Netflix and spend a $100 million on a series. But we can help established content providers and platform. We're a digital MSO in some respects. We can distribute content as well as anyone else.

Ad Age : That's interesting prospect, being a digital MSO.

Mr. Levinsohn: I view us as the network of the digital age. Put it in that context. Our network is Yahoo's front page, our owned and operated are our properties. I think the battle for premium supply is the next war.

Ad Age : Google recently surpassed Yahoo as the biggest display-advertising company. Does that bother you?

Mr. Levinsohn: Last week we bought a company called 5to1 and it will allow us to have a very strong media alliance around premium supply that 's different from what Google is doing. I don't worry about that too much.

Ad Age : You are a board member of 5to1. Wasn't there a conflict of interest in that deal?

Mr. Levinsohn: Not at all. When I joined Yahoo, I divested. I sold my shares within 30 days of joining. It's as much an "acqui-hire" for us as anything. We get great people and we get great relationships with some of the best publishers in the world. And I don't benefit at all.

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