There's still time for Bartz to transform Yahoo - but not much

There's still time for Bartz to transform Yahoo - but not much

Summary: The thing to remember about Yahoo is that it's still an Internet giant, a global Web property that's visited daily by millions who come to check email, headlines, stock quotes and more.As such, a massive turnaround for a company of that magnitude won't come fast or easy.

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The thing to remember about Yahoo is that it's still an Internet giant, a global Web property that's visited daily by millions who come to check email, headlines, stock quotes and more.

As such, a massive turnaround for a company of that magnitude won't come fast or easy. But two years after CEO Carol Bartz came on board to inject a new life into a company that was once the darling of Silicon Valley, one big question is starting to surface: How much time should Bartz be given to turn Yahoo around?

Yahoo's fourth quarter earnings may have beaten Wall Street estimates on profit but revenues were down - a mixture that suggests that Yahoo was able to cut its way to profitability but still isn't quite getting the job done in terms of sales. Even hours before Yahoo released its Q4 numbers, the company made headlines by confirming that it had plans for yet another round of job cuts.

But is 2011 the year that the results of two years' worth of change start to pay off? To hear Bartz talk about the year ahead, one might assume that things will look much different a year from now. Consider the following:

First, the company  is investing in new technology platforms to not only increase its own efficiency but also to bring some consistency - as well as the latest technological tools - to make the experience better for advertisers and content creators. Bartz said:

...by the end of 2011, we will have moved 135 old platforms to our new LEGO platforms, and that's in finance, entertainment, news, sports, et cetera, and added 50 new products in market. All of these products will be more flexible. They'll have a consistent publisher tool. They'll be able to use our content agility from the cloud and they will be able to be content optimized and for the first time, SEO optimized... we're going to go from about 20 languages to about 47, which allows us to get in many, many new markets that we haven't been in and new markets means new users and more minutes and all that kind of stuff. The point is by the end of the year it's called faster, moving much faster, innovating faster, but we're investing to do this.

Second, Yahoo still has a strong offering in display advertising, which grew by 16 percent - and big brand names that drive the industry recognize that. She said:

Advertisers continue to come to Yahoo! due to our unique blend of science, art and scale and that we lead the web in display advertising. We bring in more revenue in display than anyone else, and we are growing strong... Where did Macy's go when they wanted to take their bread and butter placements, circulars and fashion books into the online arena? What company did Toyota turn to when they wanted an out-of-box solution to launch the new Avalon? That's right, they all came to Yahoo! These big brands and their agencies know and value the same things that we do. Quality content and context matters, creativity matters, insight into audience behavior matters, brand trust and privacy matters, innovative new ad formats like our Login Page and new Mobile Screen takeover and video ads matter.

But what about Facebook, which reportedly has made strong gains in display advertising? Bartz said there's some confusion about Facebook's impact on the fight for display ad dollars and that Yahoo and Facebook offer different types of display ads. Specifically, she said that Facebook has a lot of "little impressions." She said:

We actually lead in display revenue and that is because of the art and science, so obviously the scale is relatively similar. There is a lot of advertisers that work with us that obviously work with Facebook, especially on top of the funnel. We expect that will continue. The concept, though, of how you can page your story on the pixels of Yahoo! is very different than you're going to do on a Facebook. So, I think we're actually very compatible... I think the most important thing that Facebooks, Yahoo!s and Googles can do is to get them online, then we can argue about who gets what. But the idea is to get them online and feel very comfortable. We see them sailing off more comfortably because of video and being able to paint a story. We see them being a lot more comfortable because of the large format, so they can actually put their products and context and feel much more creative. So there is room for everybody here because we're certainly in different part of the Internet value chain.

Finally, what about this continuous shedding of talent. Bartz said the company will actually be adding people in 2011 - and went so far as to "guarantee" that the company would end the year with more people than it started and that will be done with flat costs.

In Silicon Valley and on Wall Street, things can move fast. And when a company the size of Yahoo embarks on a major transformation, that process is certainly going to move slower than anyone in Silicon Valley or on Wall Street might have the patience for.

Two years seems like a long time with those lenses on but Bartz and company hinted that the tough decisions for a major transformation may be pretty much behind them now. The stars - it seems - may finally be aligning for Bartz and team.

Maybe I'm just being an optimist, but I think that there's something to the plan plan to put Yahoo back on the right track. The company is no longer viewed as a search company, which means that it's no longer compared to Google. Bartz has restructured the executive management team and is reallocating employees to better execute the strategy. The Microsoft deal is in place. And the investments to position the company as a content provider have been rolled out.

The only thing left is to wait for Bartz and team to take these changes and investments and execute in a way that starts pushing Yahoo back up - both in Silicon Valley and on Wall Street.

Hopefully, that upward momentum will come sooner, rather than later. The patience for Yahoo to turn it around is wearing thin.

Topics: Social Enterprise, Browser

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  • Y!

    Somehow I'm amazed how often I visit Yahoo. I also keep Yahoo mail as my spam email and the email I give out to companies etc.

    I'm glad MSFT didn't buy yahoo... remember Hotmail in the 90's?
    Hasam1991
    • Yes, hotmail has only gotten better.

      @Hasam1991
      So I'm not sure what you're implying. At least MS stepped in and helped keep Yahoo from dying.
      AllKnowingAllSeeing
  • Yahoo! Email

    isn't yahoo! mail still the most popular web based email out there? With every upgrade it is getting better, I find the spam filter to be excellent, even better than Gmail, I get far more spam to my Gmail account than I do to my Yahoo! account.

    They may need to change their business model to remain profitable, but as long as the email remains popular Yahoo! won't disappear anytime soon, people generally stick with an email address forever, and are loathe to change unless they have to.
    Doctor Demento
    • I have to agree with you on that.

      @Doctor Demento
      From what I hear, Yahoo mail is much better then gMail from those I know who use both.
      AllKnowingAllSeeing
      • RE: There's still time for Bartz to transform Yahoo - but not much

        @AllKnowingAllSeeing

        I would agree with that. I use both and prefer Yahoo by a considerable margin. It works just like a good desktop mail client mostly. There are a few things better in GMail e.g. drag and drop attachments and inline viewing of PDF and Word attachments. But in yahoo I can click, shift-click and ctrl-click emails for selection and just press delete. No clunky check boxes. I can also drag and drop messages into folders.
        andrewjg
  • I think Yahoo! should come out with a ...

    ... living digital magazine, based on a superset of the content it makes available on the web for free. The magazine should have tiered subscription pricing. In other words, Yahoo! should come out with smarthphone and tablet apps, and try to monetize them through subscriptions and ads that bring in higher revenue. I believe if it's not already so, browser apps are yesterday's news.
    P. Douglas
  • RE: There's still time for Bartz to transform Yahoo - but not much

    With every upgrade it is getting better, I find the spam filter to be excellent, even better than Gmail.<a href="http://sazkove-kancelaree.cz">sazkove tipy</a>
    marco5811