Call Me Crazy, but This Is Why CEO of Yahoo Is a Great Job

Portal Needs to Forget Comparisons to What It Was and Focus on the Future

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Brian Sheehan
Brian Sheehan

Being CEO of Yahoo has to be one of the most unenviable tasks in Silicon Valley. Just ask Carol Bartz, who unceremoniously lost that job this week. How unceremoniously? She was fired over the phone.

Yahoo, which once had a hammerlock on display advertising, now sees its share of the display market slip year-in and year-out. In fact, both Google and Facebook are now selling more display ads than Yahoo. And then there's Yahoo's big-time search deal with Microsoft's Bing, which didn't even create a ripple.

But despite all that , I think the CEO job at Yahoo would be a boon. Why? Because the foundation of Yahoo's business is rock solid. Yahoo is in a highly enviable position if you look at it through the right lens and recalibrate your expectations. Forget about Yahoo's history because it will never be what it was. The world has changed. The market has transformed. It's more crowded. Competitors in slightly different, and even previously non-existent, categories have moved into Yahoo's advertising space. Who would have guessed three years ago that a social network would sell more display ads than Yahoo?

But the war is anything but over. Yahoo needs to embrace what it is now -- and can be in the future. Today's Yahoo has two significant competitive advantages: content and engagement.

Take a look at Nielsen's new Total Internet Audience metric, which looks at the combination of audience size and time spent per person (i.e., engagement) each month. Facebook is the undisputed leader in this metric with an audience of 159 million and a whopping time spent of 5 hours and 19 minutes. Yahoo, however, is a healthy No. 2 with an audience of 149 million and time spent of 2 hours and 14 minutes. Google is No. 3 with the biggest audience, 173 million, but only 1 hour and 30 minutes spent.

Why is being No. 2 a cause for celebration? Because it underscores that Yahoo is still the king of "premium" display advertising on the web. Despite its loss of share and third-place position in display, one need only look at the kinds of ads Facebook and Google attract to see that Yahoo has an indisputable advantage in display ad engagement.

Yahoo is also the only content site in the top three, which makes it king of the display trifecta: quality content, tremendous reach and high levels of engagement. The combination of good content and display advertising is a time-tested approach to awareness and brand building. On the other hand, combining a display ad with personal social messages (no matter how long people are engaged in the social interaction) is not yet a proven winner for display. Premium engagement for Yahoo can equal premium price.

My advice to Tim Morse, Yahoo's newly minted, though interim, CEO: Pretend Yahoo launched yesterday. If he does, he will realize he's sitting on a winner.

Brian Sheehan is is associate professor of Advertising at the SI Newhouse School of Public Communications at Syracuse University. He spent 25 years at Saatchi & Saatchi, the last nine years as chairman and CEO of Team One Advertising in Los Angeles.

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