Yahoo (YHOO) president Sue Decker laid out her vision for the company at Digital Hollywood’s Advertising 2.0 conference, but don’t expect any new details on Carl Icahn’s bid to oust management, or ongoing talks with Microsoft. Decker confirmed that those talks are happening, but made it clear that she believes Yahoo can dominate display ads, become a player in search, and even evolve into a social network, all on its own.
Some small announcements: Decker says Yahoo will be selling ad inventory on Wal-Mart’s retail sites; the company added 93 newspapers to its Lighthouse consortium, and signed Havas Digital as a new partner and client of its upcoming AMP! ad platform. More details on all of these deals below.
Notes from Decker’s keynote and conversation with AdAge editor Jonah Bloom:
9:16 a.m: Decker is walking us through Internet advertising memory lane. Remember Pets.com? Boo.com? “I think we are on the cusp of a real transition.” There is a whole revolution on the Web. Major companies adjusting to building platforms so consumers can create own content…
Decker says she will make some announcements. But first, some background: she says Internet advertising began with display. First five years were driven by display. But most of the innovation in the last five years are from search. Going forward the opportunty outside of search is much larger. We need to apply the same art and science to display advertising that is being applied to search now.
9:24: She’s talking about AMP. The goal is to create a web- based platform to place ads across many publishers. This is much harder than search. All other forms of inventory the complexities are much greater. The revolution first happened in search but we believe the next revolution will be in display.
First announcement: Added 94 newspapers to the Lighthouse consortium. Bringing total number of newspapers and publishers to 779.
Second announcement: Yahoo Circular Retail program. Working with Shop Local to combine newspaper circulars with Yahoo SmartAds technology. Target is first customer for this product.
Third announcement: signed up Wal-Mart as a publisher client and will be exclusively selling advertising on their sites. Will combine with Ebay, other retail partners. Says advertisers can now reach 73%–through those sites–of online retail shoppers.
Talks about advertising deal with CNET, and video hosting deal with CBS. Nothing new about CBS …
Fourth announcement: adding Havas Digital, along with WPP, as an agency partner. They will adopt AMP.
Q&A with AdAge editor Jonah Bloom begins …
Bloom: You’ve only spent two years focused on advertising and media industry. What have you learned?
Decker: I spent the first 14 years in my career in advertising. It’s a love I’ve had for many years. It is easy to feel like we’re on the cutting edge. But I am convinced the biggest innovation is ahead. It’s hard to describe AMP if you haven’t used it.
Talk about where you are with the Microsoft deal? Are you talking to Microsoft now?
They made an offer. Our board felt it did not provide enough value. Then Microsoft dropped their offer. Then they walked away. There are ongoing engaged conversations. There are many ways a combination could work for Yahoo in many ways.
But it wasn’t all about price, was it?
Price is the first variable board has to entertain. But there is also certainty of value and certainty of closing. There are a whole host of issues that were not discussed because we did not get through the price door.
Can you talk about the strategic partnership with Google. It finally seems like there is a focused strategy from Yahoo. It feels there is a focus emerging on display. Does this mean search will be done in partnership with Google?
Decker: The answer is yes. We are focused on leveraging Yahoo’s strengths. If we move to more automated way to buy and sell–we think it will unleash the creativity. We felt we had to get our search assets up to industry competitive before we did this. We feel we’ve done that and we are starting to innovate on search now. Just launched Search Monkey. Search is very much a part of our vision and we intend to be a principal in search and a principal in display.
We have started to close the gap with Panama. There is still a ways to go. How do we deliver the returns to shareholders? We looked at the Google partnership and it did inform how the board responded to Microsoft’s overtures.
Bloom: Do you see yourselves as having standalone search operation?
Decker: Search is important in two ways. Search is fundamental valuable to understanding what consumers care about. The monetization of search is one of many approaches. Our monetization program will not incude search in its first version, but it will be added over time…
Bloom: What are the challenges in the display market right now?
Decker: Search is a much easier form to buy today. In search through Google and Yahoo together an advertiser can reach more than 80% of inventory. If we could figure out a way to aggregate inventory in display, that would provide a lot of value. We touch 15% of all display advertising today and we want to push that to 30% (no timetable) through partnerships with publishers.
Bloom: Do you end up with publishers holding back their best opportunities and giving Yahoo the remnant inventory? Is that a problem?
Decker: We have a world where multiple buyers and sellers are doing direct transactions–no matter how good their products are its not as good as an open, stock-market like environment. It’s easier to see the value and match value with advertiser and publishers. We think it will increase the value of all inventory with a more open, transparent process.
Bloom: What is Yahoo doing to create branding opportunities for advertisers?
Decker: It is hard to buy video today. Companies cannot find enough inventory. If we can aggregate more demand–with CBS, CNET… more opportunities for advertisers. Our Maven platform is a way to source content.
Bloom: Did you just turn Wal-Mart into a power in the media marketplace? Is Wal-Mart becoming a media company?
Decker: We are selling advertising for Wal-Mart. Wal-Mart is also an advertiser on Yahoo. We think we can sell their inventory more effectively. They believe and we believe we can build a bigger business, together. What we’ve learned is the more closed the approach, the smaller the opportunity. Our experience with other advertisers Ebay and Comcast have been positive.
Bloom: What needs to be done to get P&G and Unilever build their brands online rather than just focus on transactions?
Decker: As consumers are increasingly influenced on social media–how do you engage the consumer to be your brand advocate? One thing we’ve found is across Yahoo there are so many ways to do that. Loreal can see how many searches for their products … multiple questions on skincare in Yahoo Answers.
Bloom: Once it seemed like Yahoo was going to become a pure-play media company. Is Yahoo now shy at the notion of content creation after Semel/Braun years?
Decker: We don’t think a consumer can be coralled. We started as a ompany that was part of the journey and destination for consumers. Now we can provide platforms for consumers to create their own content. Our ambition is to build the right kind of platform. We don’t think we are going to be everyone’s destination every day. They search every day. And search is a starting point.
Bloom: Why would I create a social application at Yahoo?
Decker: In the past Yahoo has not made this easy for consumers. We have the largest latent social network in the world. 250 million email users. Enormous invormation on Flickr about what people want. We are completely rewiring Yahoo and reducing all those user profiles to one. The attraction to developers is you can write one application and reach all of our platform. We are trying to ignite social connectivity with Yahoo. What social networks don’t have is context. The more friends you have on Facebook, the less relevant it becomes. If we can ignite social graph on Yahoo Music–and I see what videos you like, that is going to matter to me and it will matter in context. We are planning to launch the pieces of this later this year. We will have a scale that no one else has.
Decker: We are experimenting now with not only serving different ads to different people, but also serving them different content. We are not looking to create a new brand for Yahoo but engagement that becomes a starting point.
Audience questions ..
Are you dealing with a shortage of talent in the marketplace?
Decker: Well, its not easy in an environment of the last four months where ever other day is a headline that has nothing to do with what our company does. But the Microsoft bid, and the news coverage, has been a galvanazing force for us. But it has made it difficult to attract employees. Says turnover rates have not changed. Hired more than 600 people in the first quarter. A little harder when people don’t know the ultimate direction of the company.
Bloom: Do you feel you’ve got to a point where you’re past the headlines and we are stable for the near future?
Decker: I don’t know how Microsoft will influence how those headlines shape up. But we are focused on what we can control, which is introducing new products. AMP we are rolling out in late Q3 or Q4.
Can you talk about what Yahoo is doing in mobile space?
Decker: It is a huge area of priority to Yahoo. Trying to recognise what is different and similar between mobile and the PC. There is an immediacy to it and level of personalisation. On mobile you are communicating, looking something up, or waiting for the subway. Consumers will tolerate less of what is not relevant to them on their mobile phones. Another way its different: there are hundreds of carriers, thousands of devices. Very hard to get clean user experience. The ad market is not developed in mobile–even in Japan. We have gone in the last 18 months to having our content on 6 million mobiles to more than 600 million mobiles. We are pursuing a global opportunity.
10: 16 a.m: Event ends …