Shake up at Yahoo

Yahoo is undergoing yet another transition and transformation. Our Zintro experts weigh in on the company’s stability and its ability to position itself for future growth.

Mary Brophy, an internet marketing expert, says the new CEO, Scott Thompson, should do as Steve Jobs did when resuming control of Apple: fire the board and bring in the best media visionaries and innovators he can acquire. “Thompson can take it still further by eliminating the three remaining and recurring board members: a radio station owner, former airline executive, and Hewlett-Packard executive,” says Brophy.

She thinks Thompson has an unsavory job ahead, specifically his recent announcement of massive layoffs to cut costs with no signs of where revenue growth will come from. “He hired Boston Consulting Group management consultants to advise him on which products are unprofitable and should be abandoned; however, with years of languishing ad sales there is little hope for investors. As BGC Partners analyst Colin Gillis stated in the LA times recently, it’s hard to ‘cut your way to revenue growth.’ Thompson needs to make intelligent and lucky choices for the direction of Yahoo’s research and reformulate its advertising business.”

Mike Russell, an internet marketing expert, thinks that the new restructuring at Yahoo presents a unique opportunity. “I’ve been buying search advertising since it was invented and have seen the expansion and decline of Yahoo during that time,” says Russell. “Over the years, I’ve purchased millions of dollars in ads through all of the search engines for many mid to Fortune 500 companies. I’ve seen it unfold over the years with both Yahoo and Google. Sadly, Yahoo didn’t progress with its offerings or ad tools, leaving the window open for Google to take over search advertising, which they did with a vengeance.”

Russell suggests that Yahoo do the following to stay competitive:

  • Build out easy to use tools for campaign set-up and targeting ads;
  • Make it more cost effective than Google for the advertiser by bringing in advertisers with incentives and lower ad costs; and
  • Promote all of this through third-party tools to expand reach to advertisers and offer incentives to the third parties.

Arthur Kupperman, an expert in web portal development, says that Yahoo indeed needs a major transformation. “The company has an extensive number of consistent users; however, Yahoo has not been innovative and is merely a competitor in a crowded and undistinguished space,” he says. “It needs to break away from the pack of competitors and change its focus, presentation, and concept to conquer new and creative features and content. Yahoo has a strong base, but as it delays it will begin to wither on a progressive scale, which will make it harder to comeback.”

Chip Boykin, an expert in business development and web development, says that Yahoo is probably doing the right thing by trying to innovate and reposition itself. “I think the question is whether they are going it in the right direction. When you compare Yahoo to most companies that attempt to make change within the organization, often it is the marketplace swinging back into its favor,” he says. “I’m impressed that Yahoo is making changes ahead of the curve rather than waiting for the curve to catch up to them.”


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