The Yahoo Turnaround Formula
Red Herring included the possibility of a buy-out of Yahoo this year among its top predictions. Business Week rated Terry Semel recently as one of the highest paid Chief Executives with one of the worst returns to shareholders.
And yet, I have said for a long time, that Yahoo is a superbly underleveraged asset that if played properly, could return gold.
Today, Techcrunch reports on one of Yahoo’s big (and rare) wins versus Google: Yahoo Answers. It is indicative of an area in which Yahoo still remains strong: Content and Community, versus Google’s stronghold: Search.
So, the first order of business for Yahoo is to understand that brand advertising - CPM based banner ads - is ALSO big business, and concede the broad CPC-based Search business to Google.
Then, focus on the 3C : Content, Community, and Commerce.
And, they need to be segmented 3C. Not the haphazard, all-over-the-place 3C that Yahoo has today, which makes it impossible for a Sales Rep / Account Manager to have a structured conversation with an advertising customer. If I am a Nike Brand Manager, and I want to market to 3 segments : College Kids, Teenagers, and Pre-Teens, Yahoo’s properties are not organized in a way that allows me to understand how to distribute my money amongst these properties. And Yahoo’s Sales Reps cannot explain. They don’t know themselves.
For all its morale boosting effect, the Yahoo! Answers property is yet another horribly understood and explained ad vehicle which does not at all clarify how I am to reach my desired segment using it. This puts it in the category of junk CPM, in the order of 50c. But it doesn’t have to be this way, and Yahoo! Answers could just as easily fetch $30 CPMs.
This brings us to the 4th C: Context. In what Context am I asking the questions? Is the Community that is relevant to that Context, around me, so that I can actually tap into their knowledge?
I would submit, that Yahoo hardly needs to do anything drastic, except, that it needs to reorganize its entire portfolio into Segments and Lifestyles, and align the 4Cs of each segment, so that the people interested in advertising to a particular segment can reach the community in a focused way, in Context. If they want to sell Groceries to people reading recipes, they should be able to reach them right there. Or, if they have Gadget Geeks researching a cell phone, they should be able to access that eye-ball, in Context.
And this would be the point to bring back Search. Constrained domain Search. Vertical Search. In Context Search. And, Search with a Customized UI that is specific to that segment. Example: I am a petite woman, looking for designer Jackets by Armani, Yves St. Laurent, or Gucci. Give me a Search Engine interface that allows me to put sizes, colors, brand, etc. in, not just free-form keywords. I am interested in precision. I am interested in personalization.
Yahoo: You can give me Context. You can give me Personalization. You can give me Content, Community, Commerce, and Vertical Search.
But you don’t. You keep disappointing me. You keep chasing Google’s tail, investing where they are strong, rather than where You are strong.
What a wastage. What a colossal wastage.
I am shaking my head.
Related Reading:
* Yahoo & Web 3.0
* Yahoo Must Acquire Shutterfly
* Yahoo Please Put Up A Fight
The key to really rich segmentation is having a good way of also analyzing the underlying data and usage, which is becoming more dynamic.
http://newspeedwayboogie.blogspot.com/2007/01/segments-and-data.html
If you can’t beat them, then break them.
Why should MSN,Yahoo be worried about google’s leading position in search segment?
Why even spend billions on msn, yahoo search when they clearly know that they are still years away from google?
Why should msn,yahoo be worries about google’s lion marketshare in CPC,cpm market segment?
Chnage the way you look at google and you can atleast get closer to google.
Google couldn’t repeat its success story in any other market segments. It unsuccessfully failed at ‘froogle’, ‘google checkout’, ‘video’
Google overpaid for youtube and somehow applied balm to their bruises.
Earlier we thought that google will take on craigslist,shop.com,ebay with one ‘froogle’. It failed. Again with googlecheckout, we thought it will beat paypal. It miserably failed again.
Whay yahoo/msn should do is learn from ebay.
They need to break the search market and wean people away. How?
Today none searches google for auctions. Because they know ebay is there fir them.
Similarly yahoo/msn should create services similar to shop,shopper.com where people should find good deals and prices for virtually any product. This way bulk of the daily visitors on google will move to other properties, where they know what they are looking for.
Slowly they should create niche services for each market and reduce google’s usability.
Today wikipedia is knowledge source. Already people started going directly to wikipedia for all their needs. Similarly answers.com should be upgraded as one stop shop for any query.
Google should basically be a place where users should go as a last option. This really takes long time to achieve but is not impossible.
Look at google’s flops and get confidence and move on.
Hope this was not boring.
–sri
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