September 12, 2007 | Wednesday
Yahoo almost outsourced PPC to Google
By Jackie Danicki - Blogger in News |PPC |Search Engines |Google |Yahoo |Microsoft
...or Microsoft, according to the Wall Street Journal. Yahoo even approached Google with the proposal, which would have boosted the also-ran’s revenue immediately and substantially, to the tune of hundreds of millions of dollars annually. Yahoo co-founder and newly minted CEO Jerry Yang eventually nixed the idea, and the prospect is no longer on the table.
Analysts and investors are hungry for just such a significant change in strategy, and the lack of innovation is causing a great deal of consternation for them. These people are begging for a revolution at Yahoo - and selling off their holdings as it fails to materialise. To wit:
“After meeting with management in August, we decided that the management isn’t considering the kind of transformational changes that would be required to improve their position in the market,” says Glen Kacher, managing director of Menlo Park, Calif., investment fund Integral Capital Partners, which has more than $500 million under management.
Mr. Kacher, who believes that outsourcing search advertising could tap “massive earnings power,” said Integral sold its entire Yahoo holdings following the mid-August meeting with Yahoo President Susan Decker and Chief Financial Officer Blake Jorgensen. He declined to specify the amount of those holdings.
Yahoo’s response was more of the same watered-down, boilerplate corporate response that I have lamented in past blog posts. The company spokesflack had this to say:
Jerry Yang and Sue Decker are committed to making significant changes to the way Yahoo operates, and to sharpening its focus on key initiatives that will enable the company to improve its performance and strengthen its position as the most open, vibrant online marketplace for consumers, advertisers and publishers.
Other investors are happy to ride things out, seeing Yahoo as a sound longterm investment. Bear Stearns & Co analysts refer to these investors as those “willing to wait for Yahoo’s growth initiatives to deliver positive results”. Or, the prospect left unmentioned by Bear Stearns & Co, willing to wait for a deal with another media giant which would take shares through the roof. Either way, the clock is ticking and Yahoo will have to deliver eventually, or face extinction.
“Innovate or die” is one of the most oft-repeated buzzphrases of the last five years. In Yahoo’s case, the options really are that stark.
Comments
There are no comments for this entry yet. Use the form below to add yours.