Yahoo!'s Old Media Strategy

Implications: While News Corp has made headlines with MySpace & IGN, Yahoo! has done the same with Newspapers.  That aside, Yahoo! is Web 2.0 though not as in-your-face as YouTube or MySpace, but through smaller acquisitions like deli.cio.us, Flickr & Jumpcut.

Analysis: The management shakeup will hopefully put Yahoo! back in good graces with investors.  If not today, then maybe tomorrow.  Wenda Millard mentioned that all sectors will grow.  What she did not say is that growth would be greater than the industry averages - which is what investors expect when they see Google & MySpace growth rates.  So what does Yahoo! do?  Aligns itself with old media - and it's not TV this time with shows like the Apprentice.  It's with good, old fashioned Newspapers.  The deal simply allows aggregation and syndication of classified through Yahoo!'s HotJobs property.  And how did investors react?  As you would expect - no reaction.  I admit the opportunity was too good to pass up, and the need for this type of partnership is great.  To further align themselves with Newspapers, Yahoo! purchased a rich media technology company called AdInterax, which has worked primarily with local advertisers to date.  To boost revenue, Yahoo! sees AdInterax as gaining more dollars for fast growing rich media advertising online.  Not a bad strategy if most of Yahoo!'s display customers only spent on Yahoo!.

I think it's easy to see the need for a shakeup, which happened last week.  The important thing to remember is that Yahoo! has made a number of smaller, though important, Web 2.0 acquisitions with Flickr, Deli.cio.us and Jumpcut, to name a few.  The issue has been integrating these functions within the Yahoo! experience, and more importantly, monetizing them.  Flickr has been a part of Yahoo! for a while and only accepts limited advertising.  Jumpcut is too new, but will be an important piece of video-editing software that, if done right, can certainly excite marketers and users alike.

The good news is that Yahoo! is still the largest web destination - bigger than Google, bigger than AOL, bigger than MSN.  Project Panama is expected to improve search volume and pricing, but that's a wait & see.  Now is the time for Yahoo! to act like the leader they are by bringing new & exciting products to the marketplace for users, advertisers and anyone in-between.  But it won't happen if they continue to silo their business units, to have lots of infighting, to drag their feet with potential acquisitions that are large in scope, and to stay the current course.  So what does this mean? Yahoo! has a lot of work to do - but they could become "old media" in the blink of an Internet eye if they're not careful in 2007.