Is Yahoo Trying To Sell Small Biz & HotJobs?
Yesterday on the Yahoo Q2 earnings call, CEO Carol Bartz spent time talking about local and small business (SMB) advertising. She said that these overlapping segments were increasingly important to Yahoo and she announced a new deal with AT&T (to sell display ads on Yahoo to SMBs). She added that between AT&T’s yellow pages sales […]
Yesterday on the Yahoo Q2 earnings call, CEO Carol Bartz spent time talking about local and small business (SMB) advertising. She said that these overlapping segments were increasingly important to Yahoo and she announced a new deal with AT&T (to sell display ads on Yahoo to SMBs). She added that between AT&T’s yellow pages sales force and the company’s newspaper consortium partners Yahoo effectively had “13,000 sales reps” in local markets around the US.
Here’s the relevant verbatim Bartz quote from the earnings call transcript:
We also know that local relevance of both content and advertising is increasingly important to our users and capturing more of the local ad market is a big focus to us. To this end, we have announced today that we have expanded our relationship with AT&T to include the reselling of Yahoo! display ad inventory by AT&T’s advertising sales force. Grouped with our strategic newspaper consortium partnership we now have a local sales force 13,000 reps strong. These relationships extend our reach into the fast growing local online advertiser segment.
Given all that it was a surprise to me to see a report on peHUB asserting that Yahoo was seeking a buyer for both HotJobs and Yahoo Small Business:
Now, peHUB has learned from multiple sources that as part of Bartz’s drive to dismantle non-core assets, Yahoo is also trying to shed both HotJobs, which Yahoo acquired for $436 million in cash and stock back in 2001, and Yahoo Small Business, which helps customers get their small businesses online by providing them with everything from domain registration to site monitoring to promotional tools.
On the subject of small business, beyond the remarks above, Bartz also highlighted the Yahoo-Bank of America small business answers center:
[L]arge advertisers such as Bank of America come to us because of our leading sites and large reach. We are partnering with B of A to promote its small business answer center. The center is integrated with our popular social assets such as Yahoo! Answers and Yahoo! Group to capture user engagement. It is promoted across our network through related search and display ads.
Yahoo Small Business is one of the biggest — if not the biggest — webhosting entities in the SMB market. I don’t know its precise economics, but it generates fees revenue and also serves as a marketing channel to the SMB marketplace:
In addition, Yahoo recently launched a partnership with AdReady that allows SMBs to create self-service display ads that run on the Yahoo network. This doesn’t seem like a company ready to abandon its small business assets as “non-core.” Still it could be true.
I’ve always believed that Yahoo has not fully exploited Small Business as a channel and maybe they want to be out of the hosting and domain registration business. Perhaps the company feels that others are better suited to sell and create the ads that will simply run on the Yahoo network and through the APT platform.
I might be more inclined to believe that HotJobs is for sale. However HotJobs was the basis and cornerstone for the newspaper consortium that Yahoo regards as strategic. That consortium has now moved well beyond HotJobs, but recruitment remains one of three relatively large (though declining) classifieds categories for newspapers. It would certainly raise lots of eyebrows among consortium newspaper execs if the HotJobs property were sold.
Yahoo is trying to control expenses, shed groups and properties that are not strategic and invest where the most value is to be found. However, given Bartz’s remarks about the importance of local and small business advertising and its newspaper consortium, it’s very strange that Yahoo would be selling these two properties.