Commentary

What's Next for Yahoo -- And How Will It Affect Search Marketers?

by Roger Barnette , September 9, 2011

Carol Bartz was ousted as Yahoo's CEO this week. Many in the industry are asking, "What took so long?" In reality the decline of Yahoo's business pre-dated Bartz's tenure at Yahoo but she did little to stem the tide. Digital marketing spend is growing by double digit percentages in 2011 while Yahoo's market share is declining by a double digit percentage. The executive shuffling at Yahoo has descended into dark comedy, with Bartz calling Yahoo's board of directors "doofuses" (which is an insult to doofuses everywhere) and is refusing to step down from the board herself. All of this is very sad for a once proud company that still has significant assets.

What can Yahoo do to right the ship -- and what can search marketers learn from Yahoo's trials?

1) Embrace technological change and innovation. Innovation needs to be at the core of every business, but especially digital marketing businesses. Digital marketing is as much analytical and technical in nature as it is creative -- and your adoption of new technologies need to keep pace with the industry. Yahoo has fallen continually behind in innovation in the last decade, would buy businesses to try to catch up, and then not be able to take the innovative culture of their acquisitions into their core business. Make innovation a core tenet of your business and don't fall into Yahoo's trap.

2) Be nimble. No matter how innovative you are this fast-paced industry will evolve in unexpected ways. This is an opportunity, not a threat, as long as your business can change directions as quickly as needed. Yahoo has been anything but nimble in recent years. Be able to change your business model when needed and don't be afraid to do so. In fact, in digital marketing continuous change should be norm and not the exception.

3) Invest across multiple marketing channels. This is pretty straightforward. Every business needs to have a portfolio of complementary products to provide their clients. Yahoo did invest (poorly) in search and display, but has largely ignored social and mobile, which are the next big growth areas. Are you being innovative in search and display, while also investing in social and mobile? If not, you should.

4) Be entrepreneurial. There are several key tenets to classic entrepreneurism. As a company you should reward trying new things, not punish failures but learn from them, incent everyone to think like an owner, invest for the future and don't milk the status quo. I imagine that Yahoo broke all the rules above. While it is harder to change a culture than create one, business cultures can be changed. A change of leadership is the best time to do this for Yahoo. Is your business as entrepreneurial as it needs to be?

I think I speak for most in the industry when I say that I am rooting for Yahoo to succeed. Since they are in the digital marketing space, their lessons for search marketers are particularly relevant for all of us.

3 comments about "What's Next for Yahoo -- And How Will It Affect Search Marketers?".

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Douglas Cleek from Magnitude 9.6, September 9, 2011 at 11 a.m.
Not looking good. Unless they do a comeback like Apple.
Right now. no cloud, no mobile and no social presence to speak of. Even if they did, they need to be a little louder.
Reply

Jim Dugan from PipPops LLC, September 9, 2011 at 6:06 p.m.

"Are you being innovative in search and display, while also investing in social and mobile? If not, you should."

Yeah, Yahoo has had a chance to invest in social and mobile, so has everybody else.

But, what are they all doing with these investments?

Yahoo's best chance for a comeback is LOCAL MOBILE SEARCH AND DEALS - BUT, NOT THE SAME RIDICULOUS BUSINESS MODEL AS EVERYBODY ELSE HAS ATTEMPTED.

Look at Groupon - A Deal A Day - Groupon's business model is flawed. I'm not going to pile on, but so is LivingSocial's. In fact, most all of them are flawed in this field today.

If you're in business and want to use a first-rate mobile plan that really, really works - look at the available options from the "big players". They don't even know what they're doing.

Groupon (the current "biggest" in this field today) just raises money, while businesses who try Groupon's "scheme" realize the problems that it causes.

Google continues to buy and sell businesses in the multi-millions of dollars (and, then, proceeds to sell them or fold them back into their deck of cards.

And, if you HAVE a flawed business model, it's not a matter of how much money a company has or raises.

Here's a key:

FACT - Users want a variety of information at their fingertips plus offers in a variety of categories that they can use at their convenience.

That means whenever they want.

They don't want to be force fed a DEAL A DAY. Now, seriously, ONE DEAL A DAY in your entire area? How many times are people going to continue to go to your site?

As a business owner, what would you think if someone actually came to your business with that business model?

If you participate with Groupon's business model as a business, how long do you have to wait to be listed again? And, how long do you want to give away 50% to the user and 12.5% to Groupon and still perform at your 100% service level for the user?

And speaking of the user, seriously, to do what?

Drive 25 miles to save 50% on some spa treatment? Martial Arts? And the occasional restaurant? I really feel sorry for the owners when I think about what angst this will be creating for most of them.

So, when we use our mobile phones to search in most cases we'd like to see a result for a DEAL along with that search. And, in most cases the advertisers would prefer to have instant analytics when the user redeems the deal (with a barcode at the point of purchase for instant savings), and the advertiser would like to KNOW instant results.

Truly, we, they, and you know it. You want to be able to go, at your leisure, to one site to search for anything and see all of the deals today and tomorrow and next week. If you could.

Not only that, behavioral research and current data are showing that with the stunning growth of mobile is that you would prefer to see all of these deals on your mobile whenever and wherever you want, wouldn't you?

Oh, and yeah, it's not a bad thing to get great search results AND a good deal on something. You'll have all of them available on your mobile phone and you have that with you all of the time, don't you?

And . . . Not to have to print it (just in case you aren't at home when you decide you want to stop for lunch - nicer to the environment, also.

So, perfect solution is one dynamic mobile search site combined with over 300 categories to cover all types of businesses, advertiser supported and created, free to users, click to call, four color, video postings, with barcoded offers to be redeemed at the point of purchase for instant savings for the user plus instant analytics for the advertiser.

I KNOW IT'S POSSIBLE - I'm doing it, but with a company like Yahoo and the resources they have and the exposure they have, they could lead the pack. There's no other deal out there that allows the advertiser to create and post his own deal (in real-time) while offering the variety and amount of deals in the local area to the users for redemption for savings at the point of purchase.

Check out www.PipPops.com - Partners In Profit Point Of Purchase Savings to imagine what's possible especially for a company such as Yahoo!

David Pavlicko from AVISPL, September 13, 2011 at 4:47 p.m.

I hope Yahoo sticks around as well. They are at least trying to innovate a bit with their 'takeover' ads on the login page.

Personally, I'd start by completely re-working the home page. Meme.yahoo may be a complete failure, but it's certainly attractive to look at...I wish I could say the same thing for their home page.

@Jim - Didn't Groupon just report a 17% increase in revenue?