Sunday 15 September 2019

Commentary: Yahoo! changes

Dubai, June 19, 2007

Yahoo! co-founder Jerry Yang has taken over the role of CEO at Yahoo.

Susan Decker, until yesterday executive vice-president and head of advertiser and publisher group, has been promoted to president of the company.

Terry Semel, who was CEO from May 2001 until yesterday, stays on as non-executive chairman and advisor.

David Bradshaw, principal analyst at Ovum, comments on the development. Ovum is part of the Datamonitor Group.

The full commentary below:

“This has a ring of inevitability about it. Something has to give in the combination of a relatively under-performing company and a CEO who is reportedly one of the highest paid in corporate America. In the end Semel resigned, apparently of his own accord though we’d imagine that there were some frank behind-the-scenes discussions with the board of directors.

“The problem that Yahoo has is that it is overshadowed by Google. Google also has a much simpler business than Yahoo, and is 99 per cent dependent on search-based advertising. In good economic times, it does well, benefiting disproportionately from market growth.”

“Yahoo in contrast is a much more complex business. Though advertising forms a smaller part of its revenue mix than Google, it is still very important to Yahoo, and there it is hurt as well as overshadowed by Google’s growth. Yahoo has some advantages over Google – for example it (like Microsoft) has far more e-mail users than Google, but like many of its other diverse business areas, it does not seem to be getting sufficient reward from this and other ‘properties’. Part of the reason for this is that search has overshadowed display advertising. There are some signs that the tide may be turning here, and that could benefit Yahoo – despite Google’s prospective purchase of display specialist DoubleClick.”

“We can’t see a change in leadership producing any sort of quick fix. Yahoo has to conduct a through strategic review. Long term it has to find a way of getting a better return from its diversity. Being just a pale shadow of Google is not an option.”

“Does all this make Yahoo any more of an acquisition target than before? We don’t think so. Its complex business makes Yahoo a difficult meal to digest. It would be most suited to a company that has little involvement in the web space but wanted to build a unified business based on a mix of advertising and subscription revenues. That would probably mean a large media conglomerate, but most of those already have dipped into the web space, and many already have strong presences.”

“PS If you want to help Yahoo a little – while doing something for the environment – you should think about joining Freecycle. Just remember to click on some of the ads, and buy stuff that you can later recycle through Freecycle.” TradeArabia News Service

Tags: Google | Yahoo | Yahoo! | Ovum |

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