The Search For Brand Credibility
What happens when a brand, especially a tech giant, loses credibility? For consumer products or theatrical movie releases it could mean demise or success, depending on the circumstance. Several executives at companies and organizations -- not to mention former U.S. presidents -- might give us reason to lose trust, but as a result, how has their respective situation changed things?
By now you've heard that Fuse Capital cofounder Ross Levinsohn, who oversees Yahoo's content and advertising business, stepped in as Yahoo's interim CEO following Scott Thompson's departure Sunday after an error on his resume related to education destroyed his credibility. Levinsohn became the fourth executive to run the portal/search engine/technology company in eight months.
Levinsohn held positions as president of News Corp.'s Fox Interactive Media; senior management at search engine AltaVista, and programming executive at CBS SportsLlne and HBO. He will likely become the new CEO.
In a research note, J.P. Morgan Research Analyst Doug Anmuth tells us that former CEO Carol Bartz hired Levinsohn in October 2010 as EVP of the Americas to lead the media and advertising business. "We believe he will be considered for the CEO spot going forward, but we expect the Board to also quickly engage in another external search, with a number of names who were in the mix just a few months ago still potential candidates."
Thompson, however, left for other reasons, too. News organization KABC reports he has thyroid cancer. One thing certain, Thompson started Yahoo down a better direction. He recently re-organized the company into three groups: Consumer, Regions, and Technology—with Consumer breaking into Media, Connections, and Commerce.
Before believing leaders can do no wrong, consider this list from The Washington Post pointing to others who have fudged their resume. I'm not condoning the act, but questionable credentials from folks like MGM Mirage Chairman Terry Lanni, Notre Dame Football Coach George O'Leary, RadioShack CEO David Edmondson, and MIT Dean of Admissions Marilee Jones make me wonder what happened to moral values and how they directly or indirectly influence the outcome.
On Friday, data firm comScore released market share numbers for April. Google led with 66.5% of the U.S. market, followed by Microsoft with 15.4%; and Yahoo took 13.5%, sliding a bit by 0.2 percentage points.
It's not clear whether the debacle will hurt Yahoo's ad business, but clearly the company refuses to abandon online advertising to focus solely on portal services. Last week the U.S. Patent and Trademark Office granted the company a patent filed in 2008 that supports dynamic ads. The ads change as content changes on the page. The patents focus on mobile and image search, too. Or what about the application that runs on a set-top box, enabling a user to interactively select a point of interest within video content being played? Messages related to the objects are created and sent to the relevant users, indicating a selection that correlates to the objects.
Even with all this innovation and technical knowhow, the overall online U.S. ad market outpaced Yahoo's 22.7% growth to $8.9 billion in Q1 2012, compared with the year-ago quarter, according to eMarketer. Yahoo's share of overall U.S. online ad revenue, which reached 15.7% in 2009, declined to just 9.5% last year. While the online ad market should grow to 23.3% to $39.5 billion this year, Yahoo's revenue share will fall to 7.4%, the research firm estimates.
Much of this decline is due to the changing display advertising market. In 2008, Yahoo's share of overall U.S. display ad revenues peaked at 18.4%, according to eMarketer. The
company's share of U.S. display ad revenue fell to 10.8% in 2011 from 14% in 2010.
Other events rocked Yahoo last week, as well. Yahoo board members Patti Hart, who also filed an inaccurate bio in SEC documents, VJ Joshi, Arthur Kern, and Gary Wilson, each of whom had previously indicated that they will not be standing for reelection, will step down.
Amid the turmoil in a research note, Macquarie Securities Analyst Ben Schachter writes: "The bottom line is that the situation at Yahoo is a mess. It remains unclear how the new management will turn things around at Yahoo.com and how quickly yet another new strategy can be formulated. The Asia assets remain the key to the stock, and while there is clearly value there, it remains to be seen if Yahoo shareholders will benefit from it."