Last week, computer scientist Marissa Mayer was named CEO of Yahoo. In the process, the Silicon Valley-based company passed over interim CEO Ross Levinsohn, the candidate favored by many New York media professionals. This occurred despite the fact that Yahoo is dependent on New York-based media agencies buying its ads. 70% of all U.S. media is still bought on the island of Manhattan.
Yahoo’s decision was only the latest example of New York’s waning influence over the Valley. Facebook, Twitter and most of the other major platforms were all founded in the Valley and are led by product-focused CEOs. While major Valley firms will occasionally hire New York media pros for sales positions, none have cracked the CEO role in recent memory.
The Valley has also largely rejected New York’s more traditional approach to advertising. Native ad formats are in ascendance, as standard display ad units are seen as a revenue source of last resort. But while the Valley has New York outgunned in terms of money and engineering talent, that doesn’t mean the game is over. There are a number of steps that New York can take to secure the future of the industry, including:
Build next-generation consumer platforms. Building big platforms that aggregate millions of users is how the Valley has begun to undermine New York’s hegemony over the media industry. In response, the city needs to develop more companies like Foursquare, Tumblr and Etsy with big user bases of engaged audiences.
Develop new media companies. The Huffington Post was an affirmation that significant media companies can still be founded, built and sold here. Startups like Thrillist and PureWow represent the next generation of promising New York media companies.
Keep developing ad tech companies. Whether it’s been ad servers like DoubleClick, behavioral targeting engines like Tacoda or social media platforms like Buddy Media, New York has been the undisputed king of ad tech. And now hot ad tech startups like Simulmedia, Moat, and Mediabrix are rising up and continuing New York’s dominance in this sector.
Fund locally. Whenever possible, New York startups should work with local venture capitalists and vice versa. Keeping it “in the family” is good for the entire New York media ecosystem.
Stop selling out to the Valley. When a New York software company sells to a Valley-based company, it provides a windfall for the founders and investors. That’s great for them, and a far better outcome than not being able to sell at all. But at some point we need to stop selling all these media-related businesses to Valley-based companies and build something of lasting value that we control.
There are over 300,000 people employed in information and media jobs in New York, the largest number of any metropolitan area. Let’s work hard to keep it that way.