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December 07, 2006

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Internet Inside-her

she's hot

Siggyboss

I don't see how any of this is going to turn things around @ Yahoo. Google finds a destination, and Yahoo is a destination. Both are trying to expand to other side will little headway; Yahoo has actually gone further relative to Google. Unless someone @ Yahoo trips over a far better mouse trap, people have little or no incentive to switch. Heck, Amazon's A9 and others offered discounts on merchandise and a sweepstakes to no avail.

Henry Blodget

Yahoo has a solid share of total searches (approx. 30% in the U.S.). As long as it maintains this share, it will be okay. The problem is monetization: the company absolutely must figure out a way to generate close to the same revenue and profit per-search that Google does. Then it has to focus on the rest of its products, decide which ones are critical, and make sure that Google makes no further headway in attacking them.

Victor

I've spoken with a number of engineers who left MS to go join GOogle and one thing that struck me is that many of them were very unhappy with the fact that MS was no long an engineering company. It was no long run by Gates and from Ballmer to several levels down it was just MBA/PR type folks.

I agree with you Henry, Decker doesn't need to be an engineer, but if she can't return Yahoo to its engineering cultural roots (getting rid of Braun was a great start though) then Yahoo is going to remain in trouble.

They cannot keep losing their brightest engineers - the people who *build* the services.

I personally think it'll be hard for her to nurture a new engineering culture because she isn't an engineer, but maybe you're right. Let's see how it plays out.

Victor

ps Do you really think it's outlandish for Yahoo to just adopt Google's ad service (i.e., do a deal with them)? They would save themselves a large cost and instantly improve their margins.

Neal S. Lachman

When Semel announces "Sue Decker will be a group-head", he must have meant it. So, there is little use to argue here what Semel should do with Decker. Fact remains that she will be in charge of ads, and -as many suggest/think- most likely she is being groomed to become Pres./CEO.

The CFO world (i.e. the numbercruncher's planet) is vastly different from the CEO world, and I think it is very wise of Semel to have Decker test the waters first as a group chief. This will also allow investors to feel more at ease instead of putting an inexperienced person in the CEO-seat. And who knows, maybe Decker herself told Semel, "Pal, for now the CEO post is a hot-seat, I don't wanna risk burning my butt".

I think there is one way for Yahoo, and that's UP. Well done, Semel.

Victor

Interesting perspective from Cody Willard at THeSreet:
http://www.thestreet.com/_yahoo/markets/activetraderupdate/10326317.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Neal S. Lachman

With all due respect, Willard's article has no substance.

I also don't understand why Semel is being pissed on all the time. The guy took over the reigns in the middle of the Internet economy's collapse. One important thing Semel's critics overlook is that he is building Yahoo out as content-distributor as well as a content-aggretator and a content-creator. This is great as it all has to do with content, search, and eyeballs.

Monetization is at the core of the problem, Henry rightly said so. And Yahoo's Decker (and thus by default Semel) have admitted to that too. But you have to seperate reality from the hype. When/if the search-economy tumbles, implodes, recesses, it may (in retrospect) be very wise of Semel c.s. to have invested in other interesting revenue-generating businesses.

So, when looking at Yahoo's long term goals we may be surprised to see that these guys have really meant it when Decker said they'll be happy to remain 2nd in search. They want to be first in content, and I think they can (if they aren't already). Accelerating revenue, growing profits, marketshare et cetera should not be seen with a 3-monthly vision. It has to be seen as a company's efforts to grow in broader and deeper terms. And I think Yahoo is going to surprise us in 2007.


Royal

Technology companies should be run by technologists.

Just ask Apple or HP.

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TallTroll

>> The problem is monetization: the company absolutely must figure out a way to generate close to the same revenue and profit per-search that Google does

Agreed. A big part of that problem is that their PPC platform sucks quite badly compared to the AdWords platform. The big money in PPC comes from a handful of large advertisers who bid on tens, if not hundreds of thousands of keywords. Uploading that data to the Overture, now YSM, interface has alwys been a frustrating experience at best, and the up-to-2-week delay in getting editorial approval to run your ads has been know to reduce PPC managers to tears.

In contrast, Googles tools make it easy to create and activate large campaigns, and start getting traffic within hours. If you break the regs, there are some automated tools in place to stop more flagrant abuses during the set-up phase (you can't use certain trademarked terms, superlatives etc as standard, although you can apply for exemptions in some cases). Your campaigns still get human moderation, but after the fact. G start by letting you run ads, and then tidy up.

A scenario I've seen play out more than once : A client approaches a PPC managment company with a decent sized budget, say £100k / month. The managment company charges the client on a %age of spend basis (very common model), and therefore needs to start spending the money as soon as possible. What platform do they concentrate the resources on?

Google. They can get some traffic going the same day / next day - it'll likely take until next week to get the YSM data prepped and uploaded, never mind approved

As it happens, I know a Yahoo type who has worked on Panama, and he is of the opinion that the new system will greatly improve the technical aspects of the ad system. It will be faster, more stable, and more importantly perhaps, easier to work on in the future (I gather the lagacy OV systems were a bit of a hiound, code-wise - no-one expected them to have to run at anything like the capacity they were handling when they were first built, and hardware can only take you so far)

The same basic arument applies to samller advertisers. If you only have a small monthly budget for PPc, which platform do you choose? The one that will kill a day sorting everything out, and require you to keep checking back on progress for 2 weeks? Or the one that lets you get going inside an hour?

James

As a long time Yahoo user... the changes they made to their systems to give me a 'new, and improved' bright and shiny Yahoo.com front page made me change to another default home page instead. I have spoken with other users who have all said that Yahoo have lost the plot.

For any portal to be a success it should not be 'in your face'. For example, Google, I travel globally and find their localisation option irritating if I am in a country where I do not speak the language and get a search returned. One of the reasons why I try to avoid using it...

Yahoo have forgotten they have users and are trying to turn everyone into a customer...


jack x

Bureaucratic nightmare must end. I have been in the e-commerce technology and marketing field for years. Without keeping extra special attention to corporate industry movements of companies like goog and yahoo; - I saw from early on that Yahoo needs a lot of help to get it to be a company of the 21st century that can bring in continuously growing revenues.
We all know this business is about traffic and how you can resell it. Yahoo has no corporate structure that allows the world merchants to communicate with them in a way that would make them feel comfortable dropping even ten percent of marketing budget at their door. No welcoming of revenue along with corporate bureaucratic department disconnection is a recipe for disaster.

Victor

Google checkout free for 2007:
http://www.thestreet.com/_yahoo/newsanalysis/techstockupdate/10326648.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

from what i've been reading checkout is now being picked up by merchants very rapidly because of the big discounts google is giving them. This will probably cut into the bottom line in Q4, but Q4 is usually massive for them anyway, so it'll be interesting to see the effect.

Toby Durkin

Ever since Yahoo got rid of the private user rooms in messenger, I've lost interest in Yahoo, full stop!

The only reason I used it was to go in one room to meet up with my friends and now they've got rid of it, my friend no longer go on yahoo, so it's pointless having messenger.

The 'so called' improvement program is a joke!

Raj

We are google adsense user as a publisher. Result have been mix but it is better than nothing. We tried several times to get into Yahoo as a publisher. Couple of points for Yahoo.
-Its system is confusing to use.
-They do not have any crieteria to select small publisher. More than likely you will be rejected.

The reason we want to try Yahoo is because
Google Adsense never tells us how much they are getting paid. What % cut they are getting ad. running on our sites. Being monopoly helps them here. If Google had competition, they can be more responsive and be willing to share more information with their partners.

Victor

http://www.nytimes.com/2006/12/09/technology/09msn.html?_r=1&oref=slogin

great NY Times article on why MSN is facing even bigger problems than Yahoo. The guys at Google must be laughing at the foibles of their two clumsy competitors

Illuminati

Is the internet companies runing out of steam and ideas yes, and yahoo messenger,s adoption of Flash technology put me right off and also the way they pester, for example every time i went to yahoo mail it kept saying hey try this new thing it's free [my thought i don't bloody want it] just give me email.Then 360 appeared er what the hell is this? i dont ant others knowing anything about me.The winning solution for yahoo is keep it simple stop messing up our hom page and lose the flash .
To be honest the internet will come to grinding halt soon because of the shear volume of adds that appear ever where, oh and spam which yahoo have totally failed on stopping.There a dying compnay with burnt out people working for them plus the fact the name Yahoo [these days] puts many off them as it is to American. g--gle is a nice fun name.
The time has come for the real owner of the internet to step forward and take control [probably the US government.] Didn't yahoo say that they could look at ever little bit of data they had.
Sooner Yahoo is dead and gone the better.
goodbye Yahoo you were never any good anyway.

Von frutilash

"The problem is monetization"

No, the problem is people making up words that don't exist

Matt

I no longer use Yahoo because of all the giant ads and crap that it throws in your face. It's that simple. Is that ever going to change? Nope.

Still Inside

Just another vote...to open the debate on the Great Search War of 04-09. In particular, whether YHOO should pull troops out of this war compleletely and start making money off nof the competitror's system, or should they stick it out? HUGE near-mediumn upside versus long-term-suicide. Let's here the debate.

SI

Kent

I wish Yahoo would merge with the Wall Street Journal. It's impossible to easily find data buried in the WSJ and Yahoo seems to want more beef in its news dept. Although, not as cute, Y!s finance data is much deeper and richer than Goog's; the Y! package of currency, commodity, option price, historical price, new issue, IPO, global index and essential/fundamental company info are nowhere to be found on other sites. The AJAXed methods that Yahoo uses to integrate the realtime stock price displays throughout their site really smoke. I wish that Y! would build on these advantages. I'm just talking about the finance section here, but my biggest fear is that future Yahoo finance redesigns are more cutsey-pooh and less hard core.

Neal S. Lachman

SI,

My two cents:

Why on earth would a company that has such great content and virtual assets just drop everything and start sleeping with the enemy? I believe Sumner Redstone (Viacom/Paramount/CBS) can also be quoted when it comes to ONLINE content... "content is king". Cisco System's mantra is "Infrastructure is God", and even though they are talking about hardware-based infrastructure, I am sure this can be translated to the Internet. Yahoo happens to owns both (online) content and (cyber)infra, what does that make them in the online universe?

I'd also like to note that although Google has won the battle, it hasn't yet won the war. Besides Yahoo there is Diller's ASK, Gates's MSN, and now Falco's AOL up and coming. And we are not even aware (let alone talking about) some start-up that may be the NEXT Google, or even better than them.

What say?

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