At yesterday’s investor conference in San Francisco, someone asked Yahoo CEO Carol Bartz if she held the upper hand in negotiations with Microsoft about a possible search deal.
“Yes ma’am,” said Carol.
Amazingly, it’s true. Yahoo search has actually managed to stabilise its market share the last few months. And Microsoft’s search business is still too small to matter.
But Carol shouldn’t push it.
Specifically, she needs to stop spouting Jerry Yang’s old line about how it’s important to Yahoo’s advertising clients that they be able to buy search and display advertising in one place.
It’s just not true.
Here’s what Carol said yesterday about that, per the WSJ:
Bartz took the time to reiterate several points that Yahoo has made – and will likely continues make – to argue for the value of their search business, if or when talks heat up.
One of them: Yahoo’s search and display businesses are greater than the sum of their parts, she said. The two businesses are “linked in the minds of the top 200 advertisers,” she says, noting that Yahoo’s salesforce can sell more advertising because they sell the combined concept.
We’ve heard a bunch of times from advertising insiders that this is rubbish. But just to drive the point home, we asked a top digital media agency exec for a response. (He asked us to leave him unnamed because his firm does or could potentially do business with Yahoo). His answer:
The remark about the sales force does not reflect my understanding or
At the top, the two fields tend to be linked, but those people are less
concerned with individual publishers.
At the buying level, for most large agencies and clients, the practices are
very separate. They’ll share the same objectives/strategy, but execute very
Smaller operations have generalists who do both.
Carol is probably just using the “search + display” line as a negotiating ploy. But she should stop it anyway. As any poker player knows, when you’ve got the “upper hand” — like Carol knows she does — there’s no need bluff.
Photo: Jam Adams