Profile: Jeremy Gilley

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Yahoo! must sell to survive

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Now Carol Bartz, Yahoo!’s third CEO in as many years, has been ousted from the company its shares have rocketed, but the remaining executive team still faces a monumental uphill struggle if it is to see any more of its financials on the rise in the coming months.

Yahoo! is now undertaking a “comprehensive strategic review to position the company for future growth”, according to the Wall Street Journal.

The review is understood to be focusing on “organic growth” and the possibility of acquisitions or partnerships - but considering Yahoo!’s current state, perhaps less is more.

Although profit at Yahoo! actually doubled since Bartz joined the company two and a half years ago, it was still below the peaks of 2004 to 2006. The number of minutes that visitors spend on Yahoo! sites per month has dropped 33% during Bartz’s tenure as users migrate to Google and Facebook, which are both butchering its ad revenues.

In her short time at Yahoo!, Bartz notched up some historic achievements. She helped overhaul its organisational structure and streamlined the business.

She oversaw the search alliance between Yahoo! and Microsoft (although this means search ad revenue is now split with the latter company, meaning Yahoo! could have potentially made more money in-house).

Bartz also led the strategic change in direction for the company, from being seen as the “billboard of the internet”, to aiming to become the “premier digital media company in the world”.

It’s no wonder Bartz said to Fortune magazine earlier this week that the “doofuses” on the Yahoo! board had “fucked [her] over”.

The fact that all these changes were implemented, but display market share is still dropping at a remarkable rate and top level executives and investors are still leaving in droves, are likely to be among the reasons why Bartz was asked to leave. But what will her replacement be tasked with?

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Yahoo! needs to quickly establish itself as a company with a unique proposition. At present it struggles to define itself against the growing number of media/digital/tech companies already in existence. What is Yahoo! capable of that sets itself apart from every other affiliate site?

It is possible that Yahoo! is seeing its video offering as a potential answer to that most difficult of questions.

In April, Yahoo!’s UK managing director James Wildman told Marketing Week that the company is looking to provide more advertising funded and professionally produced video to its users to encourage more engagement with ads.

Yahoo! secured its first professional video content deal last year with the Barclays Premier League and Wildman said the company is well placed because of its “trust, brand advocacy, heritage and scale of [its] proposition” to work with further partners.

Globally, Yahoo! is purpotedly set to be bidding for US video streaming service Hulu, which would significantly ramp up its video offering against the likes of Google’s YouTube, the biggest video site in the world.

Unfortunately for Yahoo!, Google is also understood to be tabling a bid, which would signal yet another nail in the coffin for the former dot com giant.

Without a unique video proposition, Yahoo! has little to differentiate itself except its progress in Asia, specifically its 43% stake in Chinese company Alibaba. Although Yahoo! and Alibaba were embroiled in a public spat earlier this year, both seem to have now made amends, although Alibaba’s chief Jack Ma did suggest that Yahoo! would do better were it broken up.

AOL has already taken the lead when it comes to content - especially with its acquisition of the Huffington Post earlier its year, Google is the mammoth when it comes to search and other facilities such as e-mail and Facebook has social media covered. When it comes to the internet, the hare always beats the tortoise in the race and Yahoo! has simply been left behind.

Perhaps Yahoo! would be wise to take on Ma’s advice: Microsoft already showed interest for Yahoo! back in 2008 and if the company was broken down into its component parts, there would be enough interest from Asian-focused private equity firms and even other “digital media pioneers” to generate a sizeable wedge.

The question now should not be who Yahoo! will draft in to replace Bartz and turnaround the company, despite it being just days since her dismissal, the key question is: who is going to buy out the company and unlock what valuable assets it still has?

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