Will Yahoo Remain A Global Player Under Scott Thompson?
For Yahoo, the new year got underway with the appointment of a new leader, Scott Thompson. Mr. Thompson’s appointment was announced on the 4th of January with him due to take up his responsibilities at the beginning of this week — so right now, he’ll be meeting his new team and finding out what really makes the Yahoo business tick.
Most recently Scott Thompson was the President of PayPal and is credited, especially within the Yahoo announcement press release, as “Driving customer engagement built on strong technology platforms.” But much of the chatter around Wall Street has questioned Mr. Thompson’s ability to grow a “media” business when the focus of his experience has been around technology.
Is Yahoo A Media Or Technology Company?
For a search engine, this would be a ridiculous statement the equivalent of saying, “If Google is now a media company, it doesn’t need to invest in algorithms to decide on rankings.” After all, as Sean Corcoran of Forrester Research recently said in a Search Marketing Now webinar, “Technology is the new creative”.
But what of the global perspective? The good news is that at PayPal, Scott Thompson has been working in a global environment much more so even that it’s parent company eBay. PayPal has some 104 million active users in 190 countires worldwide.
Will Yahoo Dispose Of Prize Assets In Asia?
His brief at Yahoo is to continue the strategic review process the business has been going through and to “Identify the best approaches for the company and its shareholders.”
The Yahoo release poignantly continues, “Yahoo is considering a wide range of opportunities for the company’s business, as well as specific investments or dispositions of assets.”
The dispositions of assets relates mainly to an area of great interest to international search marketers like me. Yahoo was one of the great international successes of the last decade but sadly failed to capitalize on some huge successes. Now the discussion is all about Yahoo disposing of those international assets and potentially, through certain asset swaps, becoming much more of a domestic US company.
I sincerely hope that Scott Thompson does not fall for this crazy idea. It amounts to saying, “Because you messed up a few things recently, why don’t you sell of your prize international possessions and focus instead on the market where you’re less competitive.”
Yahoo Owns $14 Billion In Its Alibaba Stake
One of Yahoo’s principal global assets is its share in Alibaba — the Chinese giant business-to-business match making site — where Yahoo owns 43% of the shares. This asset alone Yahoo valued at $14 billion in October.
Meanwhile, the founder of and chief executive of Alibaba, Jack Ma, had expressed an interest in buying Yahoo rather than just the shares that Yahoo owned in his own company.
This looks less likely now and talk is of an asset swap which might involve gaining assets in the US or Yahoo reducing its stake in Alibaba from 43% to 15%. One mooted plan is that Alibaba buys the Weather Channel and then swaps it for the Yahoo shares in Alibaba — this apparently is a tax efficient way to achieve the result.
Yahoo Japan, which for years has been the leading search engine in Japan, is jointly owned with Softbank Corp. In a bizarre turn of events, last year it switched its search support from Yahoo and its alliance with Microsoft, to have its organic results and ads powered by Google, giving Google first and second spot in the significant Japanese market.
Other uses of “Overture” the older version of Yahoo ads included Naver in Korea who have since switch to their own system. Meanwhile, Yahoo in Hong Kong and Taiwan are going strong.
Amongst all of this talk, not much is said about Yahoo returning to any kind of role in search — other than through its international sales teams recruiting advertisers for Microsoft-Bing. Does that potential exist? I think it does…
Yahoo needs a formula to give it a purpose in life and I cannot see how being a “media” company can ever give it a distinctive purpose as a former technology company. So, perhaps Scott Thompson would like a few suggestions from me (ironic smile)?
Will The Real Yahoo Stand Up
Yahoo is not really a media company. Yahoo is no longer a search company. Yahoo is not really an email company. Yahoo is not a social network. But Yahoo does have aspects of all these — so what should it do.
Here’s what I think:
- Yahoo should reinstigate the directory which made it famous! There is still a role for that!
- Yahoo should merge all of its diverse assets under a single brand — in other words Flickr should become Yahoo images!
- Yahoo should hang onto its international foothold — somehow, anyhow — especially when so many are desperate to get a slice of the Chinese market.
- It should treat display advertising as an extension of search advertising increasing the level of intelligence used to target ads
- It should expand and combine its Q & A sites and invest in the technology of how it provides “answers”. There is a growing need for that too!
- Yahoo needs a powerful suite of mobile solutions fast!
Good luck Scott Thompson!
(Some images used under license from Shutterstock.com.)
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