The Tao Of Digital Media

by The Riff, Jun 20, 2007, 6:00 AM

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As Yahoo demonstrated the other day, if you want to survive in today's rapidly evolving media world you've got to have a little Yang. You've also got to have some Yin. And you need to keep the two in balance. Taoists understand this essential truth about the harmony of the universe--and so, apparently, do the shareholders of big digital media concerns.

Under former CEO Terry Semel, Yahoo appears to have gone a little too Hollywood. It also may have become a little too focused on content, forgetting that a core reason for its success has been exploiting superior technology to connect people to the stuff they want: information, content, and other people.

So Yahoo is going back to its roots. It's tapped co-founder Jerry Yang as its new CEO, and it plans to refocus on the kind of technology that got it where it is today: The No. 1 destination on the Internet. That's right. It may have gotten lost in the headlines surrounding Semel's ouster this week, but the fact is Yahoo--not Google--is the place more people go to spend their time online... to get around... and to find stuff... than any other destination.

But as anyone who keeps close tabs on Internet traffic knows, there's not a significant gap between Yahoo, Google, and MSN, and Yahoo's dominance appears to be eroding.

Yahoo.com still has the greatest reach of any online destination, according to Alexa, followed by MSN.com and Google.com. The problem is that Yahoo.com's reach has been heading in the wrong direction, as has that of the other big portals.

What's going on here? Ironically, it's the same long-tail phenomenon that has made search engines and portals like the Big 3, well, the Big 3. The problem is that as new players enter the market with increasingly vertical search plays; smaller, and more tightly focused online communities; and the aggregation of more relevant and better contextualized content, the Big 3 are getting a little less big.

It's an ironic trend, for sure, and is a bit reminiscent of something another Big 3 of media have been facing for some time: ABC, CBS and NBC. But unlike Yahoo, MSN and Google, which may not be able to do anything but watch their Internet audience shares decline with an influx of longer-tail players, the Big 3 broadcast networks are now utilizing the Internet to extend their reach and grow their audience base.

Don't get us wrong. Online's Big 3 are still plenty big. And it will be some time before anyone writes their epitaph as "Three Blind Computer Mice." But just like the traditional media are being forced to adapt by their initial innovations, now the innovators are being forced to adapt. Witness Google's push to diversify and extend its reach online, via computer applications, and into traditional media. Now it's time for Semel to exit stage right and Yang to enter stage left.

Yahoo is not the first, and won't be the last to refocus on technology. In the constant Yin Yang of the digital media world, we've observed a noticeable shift toward the tech side.

That was evident last week during the American Association of Advertising Agencies Digital Conference in New York where, agency after agency--both the pure play digitals, as well as older school traditionals--were remaking themselves as digital marketing services agencies. We suppose that was inevitable given the Internet's rapid re-ascendancy. It's cool to be a geek again. And it's all about the algorithm, not to mention the market multiples.

But please, let's not delude ourselves again. It's all about balance. And the organizations that get that--whether they call themselves media, technology, marketer or agency--are the ones that will succeed. Why? Because it's ultimately what the consumer wants.

We've entered the Yin Yang era of media. It's all about harmony. You can no longer push things at people. And you cannot simply rely on them pulling what they want. Just like any good Taoist understands, the world is about pushing and pulling, and the energies in between.

Internet Destinations Ranked By Traffic.

No. 1: Yahoo.com
No. 2: MSN.com
No. 3: Google.com
No. 4: YouTube.com
No. 6: Myspace.com
No. 19: eBay.com
No. 54: AOL.com
No. 168: NYTimes.com
No. 1,675: Second Life
No. 4,347: MediaPost.com
No. 7,398: Adage.com
No. 28,303: Adweek.com

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