Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.
Yahoo CEO Out: Does This Mean Panama Is A Flop?Yahoo CEO Out: Does This Mean Panama Is A Flop?
Yahoo CEO Terry Semel <a href="http://www.information.com/news/showArticle.jhtml?articleID=199905221">resigned today</a> in a move that sent shockwaves through the Web. Yahoo co-founder Jerry Yang will replace Semel at the top spot. Despite Semel's best efforts -- buying Overture and building Panama -- Yahoo hasn't been able to keep up with Google in terms of search or online ad growth. Today's announcement opens up plenty of new questions.
3 Min Read
Yahoo CEO Terry Semel resigned today in a move that sent shockwaves through the Web. Yahoo co-founder Jerry Yang will replace Semel at the top spot. Despite Semel's best efforts -- buying Overture and building Panama -- Yahoo hasn't been able to keep up with Google in terms of search or online ad growth. Today's announcement opens up plenty of new questions.In April I predicted that Google's acquisition of DoubleClick would give Yahoo six months to act. Looks like I gave the guys at Yahoo way too much credit. While Panama has made an impact, Yahoo won't see any real advantage until the second half of the year (if then):
Yahoo's revenue per search has gained more than 10% so far this quarter, helped by the new ad program, called Project Panama, Decker said on the call. The software may generate more money from each search query. Decker previously said it wouldn't be until the second half of the year that Yahoo would see gains of that magnitude.
Total sales this quarter will be at the middle to the low end of its forecast, Decker said. Yahoo in April said net sales may be $1.2 billion to $1.3 billion. While Panama is lifting results, sales of display ads are slowing, she said.
While Yahoo may be making more money off its ads, it's still losing market share to Google. If Yahoo can't reverse this trend, Panama might not matter as Google continues to eat up all the search and online ad market.
As I pointed out in April, Google beat Yahoo in the ad game without a banner ad business. Once it started running display ads, that growth only snowballed. Assuming the DoubleClick deal goes through, Google could be ready to slap down even more hurt:
If Google had any one weakness when it came to fighting Yahoo, it was display advertising. Not anymore. This deal gives Google a straight shot into the world of online branding. Google has been working for the last several years to build relationships with Madison Avenue. Now Google can use DoubleClick to enhance these relationships.
Even more important, Google can combine its AdWords and contextual advertising technologies with DoubleClick's platform and backlog of data to deliver the most comprehensive, contextual, and behaviorally driven online ad solution on the market.
Jerry Yang has his hands full. On the tactical front, he has to be able to better leverage Panama as well as make some inroads on Google in the search market.
But thinking bigger picture, Yahoo has to figure out what it wants to be. Seriously, Yahoo needs to get over its midlife crisis, ditch the past attempts to be everything to everybody, and face the future with a new vision. After that, Yang needs to get rid of as many of Yahoo's second-rate products as possible. To be blunt, Yahoo does too much and it doesn't do it very well. Yahoo has become the perpetual second and third (or fourth or fifth) player in a lot of online markets and that's not a road to victory.
What do you think? Can Jerry Yang save Yahoo? Or is Yahoo doomed?
About the Author
You May Also Like
More Insights
