Yahoo’s CEO Choice Reveals the Engine’s Current Thinking

Is Yahoo hoping to reinvigorate itself as a technology company by selecting Carol Bartz as CEO? She worked at Autodesk, Sun Microsystems, Digital Equipment Corp., and 3M, not to mention being on President Bush’s Council of Advisors on Science and Technology, plus serving on the boards of directors of Cisco Systems, Network Appliance, Intel, and the Foundation for the National Medals of Science and Technology. If it’s technology expertise plus business acumen that the Yahoo board wants, it’s made a great choice. Yet I’m not sure the selection had much to do with Bartz’ experience, and I’m not alone in that thought. The choice broadcasts some interesting possibilities beyond that of bringing in a leader who might be able to increase revenues fivefold at Yahoo within a few years, as she did at Autodesk.

Another search engine marketing company anointed a similarly pedigreed geek for its CEO spot. Does Yahoo think that because Eric Schmidt has led Google to success that Carol Bartz will do something similar? Or is it simply that Yahoo needs someone who can hammer out a deal with Microsoft (for search or for the entire company) that would make Yahoo’s stockholders happy enough not to sue someone?

Schmidt was selected to run a search engine that cloned and improved a paid-placement business model built by Overture (now Yahoo). In the meantime, between the brain drain at Yahoo following its Overture acquisition and a failure to invest heavily enough in search technology, Yahoo lost its way, at least with respect to SEM (define) technology. If someone is going to try to not only fix Panama but also build something better than what Google has, Bartz was perhaps a good choice. That’s because she could gain the respect of top programmers who might otherwise be drawn to Google or even a startup.

Most analysts, pundits, and industry folks I’ve talked to are concerned that Bartz might not understand digital media, marketing, and advertising. It’s unclear whether her prior roles called for any hands-on management of marketing strategies in conjunction with a CMO or marketing VP. I looked around for some clues. Senior executives of large public companies often like their privacy, so they don’t always network heavily online. However, most digital media CEOs I know have at least dabbled with LinkedIn or Facebook, if only to satisfy their curiosity. But if Bartz has dabbled, she hasn’t left much of a trail. I was unable to find a LinkedIn or Facebook profile for her (a possible Facebook hit with no picture). Will she understand social networks, a source of both huge volumes of inventory and targeting information?

At this point, Yahoo would probably like to close a search business deal with Microsoft, so this will likely be a high priority for her. However, Bartz should get to know the search business well before discussing a deal with Microsoft. Even though Microsoft is the new engine in town, it’s staffed up significantly (including some from Yahoo’s ranks), and one wouldn’t want to negotiate without understanding the other side.

The Key Is Behavioral Targeting

Yahoo must preserve access to its search data. With the display ad market showing softness in premium pricing, Yahoo must take full advantage of the fact that most of its search engine advertisers would be interested in targeting searchers behaviorally. I’m not talking about Yahoo’s AMP/APT platform; I’m talking about Panama’s sponsored search interface. There should be a tab for behavioral search where I can target creative at recent searchers in either image or text link form. I need the same functionality in the API (define) and the ability to bid differently for behavioral clicks and set recency (the time since the search). For example, a flower retailer would want to set recency differently than a cell-phone company or an auto advertiser, because searchers stay in-market for different periods by category and sometimes by keyword.

If Microsoft were to buy or otherwise take over the search business, Yahoo would need to either be compensated for the loss of its behavioral data or share that behavioral data with Microsoft (which also has plans to use behavioral search data more effectively). It would also have to allow marketers access to it in APT, even if Panama is shuttered.

Yahoo reports fourth quarter earnings on January 27. Given Yahoo’s dependence on premium display ad revenue for a huge chunk of its business, the results could be quite disappointing. The next six months will be nothing if not exciting.

Join us for Search Engine Strategies London February 17-20 at the Business Design Centre in Islington. Don’t miss the definitive event for U.K. and European marketers, corporate decision makers, webmasters, and search marketing specialists!

Related reading

site search hp
amp
Space Shuttle Launch
google-changes
<