Yahoo isn’t giving up on ad technology, but the real action in online advertising is in social media. Facebook is getting hammered for not growing social media ad revenues fast enough, but it and Twitter are starting to take the right steps.
Yahoo is telling people it’s not going to sell off its Right Media online advertising exchange. The Journal also says its core ad hosting and targeting technology – its APT platform – will also remain intact, though I don’t see any direct references to it in other interviews. Ad Age hears that Yahoo will invest several hundred million in ad technology, even though its exchange is mostly filled with its own remnant inventory, rather than that of many other online publishers. The six key positioning factors that Yahoo says will differentiate Right Media aren’t earth-shattering, but they’re sensible. Yahoo should indeed invest in advertising technology for its own purposes; I’m less sanguine about its chances in building out a marketplace. Possibly Yahoo could combine on some more programs with Microsoft. AOL is also trying to execute on a content plus ad network strategy, with a stronger network but weaker content.
AllThingsD reports that Yahoo is trying to unload its ad network. The rumor is that Yahoo’s Right Media exchange – a marketplace of networks for ad buyers and sellers Yahoo acquired in 2007 – is on the block, along with Yahoo’s own ad-buying and targeting infrastructure. When new CEO Scott Thompson stepped in, I wrote that Yahoo should forget about being a technology platform, a social media company or an ad network, and concentrate on being content and services portal that sells premium advertising to big brands. Much as I liked the idea of Yahoo teaming up with other name-brand publishers (AOL, Microsoft and others) to create a premium ad exchange, it could outsource the infrastructure of such a thing. And AllThingsD says Microsoft is a potential buyer, along with Google. If Google’s interested, that could work out for Yahoo, although it might re-introduce the complications of switching search technology providers.
Last week Yahoo announced it had hired Scott Thompson, currently the president of eBay’s PayPal business, as its new CEO. Thompson has product and technology cred, which means Yahoo should be fixable. With that in mind, here’s what he should do to get Yahoo growing again in order to retain its position as one of the biggest players in online advertising.
Last week, Yahoo, AOL, and Microsoft reportedly pitched a premium advertising exchange to advertisers and brand-name publishers. The object would be to raise the value of their ad inventory and compete more effectively against Google and Facebook. Could this trio of portals pull it off and rejuvenate their sluggish businesses?