Gigaom

Can Yahoo Become a Modern Media Company?


Can Yahoo Become a Modern Media Company?

Photograph by Tony Avelar/Bloomberg

Now that Yahoo! (YHOO) has managed to make its way through yet another CEO shuffle—its sixth in five years—the former portal must figure out what its future looks like. By replacing Chief Executive Officer Scott Thompson with Ross Levinsohn, who currently runs Yahoo’s global media business and who used to be a senior executive at News Corp. (NWS), the company seems to be indicating that it wants to focus (again) on being a media player. But does Yahoo even have what it takes to succeed as a new-media entity? There are plenty of reasons to be skeptical, and the company’s knowledge gaps are not going to be easy to fill.

The news that Levinsohn had been elevated to the top spot sparked a lot of favorable reactions in the media and tech spheres. Some observers, including former Adweek editor and author Michael Wolff, seemed less than enthusiastic about his abilities. Others, such as former Myspace president Jason Hirschhorn, were much more positive, saying the company couldn’t have made a better choice. Many pointed to his purchase of Myspace while at News Corp. as a sign that Levinsohn is both a forward-thinker and willing to make big acquisitions to further those goals. (Myspace’s decline into irrelevance began after Levinsohn left the company, his supporters say.)

But while having seen Myspace as an opportunity in 2005 may be a mark in Levinsohn’s favor, some of what the new CEO has said about Yahoo both before and since he took the position raises questions about where he sees the company going as a digital-media entity. In a memo to the troops in the wake of Thompson’s departure, he said Yahoo was “achieving genuine and meaningful successes in the marketplace every day and heading in the right direction.” In an interview with paidContent last year, he said: “Yahoo is the premier digital company in the world and embracing that isn’t a hard thing to do. That’s just fact-based. Tell me what other type of media can sit with you and say ‘I’ve got the top 19  No. 1 or No. 2 newspapers, I’ve got the top 20 shows, I’ve got the 19 of the top 20 radio stations, 19 of the top 20 magazines?”

Does that make Yahoo well-positioned to be a media player for the next decade, rather than the past one? That’s not clear. Levinsohn seems to think having a huge number of eyeballs aggregated around Yahoo’s various properties is a sign of success, but that’s arguably not what media companies of any kind ought to be concentrating on right now. Advertisers don’t want hundreds of millions of eyeballs to show banner ads to any more. They want targeted reach and they want mobile and they want social. There aren’t a lot of signs that Yahoo has what they need.

In an interview on Friday at Harvard, the head of Google’s (GOOG) news division, former Salon CEO Richard Gingras, compared newspapers to Yahoo—and not in a good way. He said newspapers have suffered from the same kind of problems that afflict portals like Yahoo since the social Web started changing the landscape: They still operate on the assumption that aggregating a lot of miscellaneous content together in a digital bundle is what readers and advertisers want. That’s not the case.

Google may not have solved the issue of adding social signals and features to its business, but at least the launching Google+ has been a credible attempt in that direction. Does Yahoo even have a social strategy? Not long after it gave up on the search business and handed that responsibility over to Microsoft (MSFT), the company effectively admitted defeat on the social end of its media operations by integrating with Facebook. Is that the beginning and end of its ambitions when it comes to adding social features to its business? If it is, then Yahoo is going to have a big problem on its hands.

Mobile is a further aspect of a modern media strategy that seems to give Yahoo virtually no role. Apart from the occasional bundling deal, there is no sign the company has anything to offer—and what it does offer often seems a day late and more than a dollar short. Could it acquire something like Flipboard as a way of making a move in that area, as CNN (TWX) acquired Zite last year? Possibly. But then Yahoo’s history of acquiring things—only to let them wither on the vine—isn’t likely to fill anyone with hope.

The biggest challenge Levinsohn and Yahoo face is learning to think about media in a different way. It’s the same challenge newspapers face. Just as papers got used to being the main destination for people in search of content when paper was the dominant delivery system, Yahoo seems stuck in a mindset that sees media as a game of scale in which the player with the most eyeballs wins. AOL (AOL) has arguably been playing the same kind of game, and it hasn’t been having much more luck than Yahoo.

If the rise of Facebook as an advertising entity has shown anything, it is that what matters now is targeting and focus—the ability to drill down into precise market segments and base decisions on actual user behavior. Just how valuable that is for Facebook and for advertisers may still be in question, but there’s no question advertisers want it. And Facebook is a lot better positioned than Yahoo to offer it. If Levinsohn wants to own the future of media, he’s going to have to figure this out—and fast.

Also from GigaOM:

NewNet Q1: Advertising, Commerce, and Discovery Dominate (subscription required)

Study: 3G/4G Tablets Suck Up 3X More Data Than Smartphones

Wil Wheaton to ISPs: Don’t Throttle My Torrents!

Qualtrics Gets $70M to Boldly Scale Like No One Has Scaled Before

Optical vs. Social: So What Kind of Engineering Makes Sense?


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • YHOO
    (Yahoo! Inc)
    • $35.9 USD
    • 0.00
    • 0.0%
  • NWS
    (News Corp)
    • $17.4 USD
    • -0.09
    • -0.52%
Market data is delayed at least 15 minutes.

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus