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Yahoo will shell out US$100M to promote its brand and products

Juan Carlos Perez | Sept. 23, 2009
The ad campaign will be the first global one in Yahoo's history

In its thrust to be the preferred hub for people's online experience, Yahoo, like other traditional portals such as AOL, faces a tough competitor in Facebook, which has fast become the Web's starting point for many of its now 300 million members, Sterling said.

"Facebook has moved into that role for a lot of people and encroached on that space," he said. "It's not a portal and doesn't have all that functionality, but it has gotten a lot of the mindshare Yahoo used to have."

Gartner analyst Andrew Young also expressed the concern that Yahoo may not have enough oomph in its roster of services to back up the interest the campaign generates.

"A campaign of this size will put enormous pressure on the company to fulfill and exceed people's expectations for how these services will change their experience, opinions and relationships with Yahoo," Young said.

"I don't know if Yahoo has the goods. Yahoo has to go beyond where it is today to fulfill the campaign's promise," he added.

For example, to truly be the central place from where people manage their lives online, Yahoo needs to let people manage all their online identities and social networking interactions on and off Yahoo.

"There are many things that can be done to make the world of social networking more convenient and empowering for people. There are plenty of things Yahoo could do," Frank said.

Bartz declined to comment about recent reports that Yahoo is looking to sell its Zimbra communication and collaboration suite for businesses, whose technology has been used to enhance Yahoo Mail.

In general, she said Yahoo will either sell or shut down any of its products or units that aren't aligned with the company's strategy of being the center of people's Web experience.

The campaign seems to be in line with Bartz's push since taking over as CEO in January to streamline and clarify Yahoo's structure and focus.

In recent years, Yahoo has regularly delivered disappointing financial results and has been criticized for lacking a technology edge, failing to capitalize on many big opportunities like search, video and social networking.

Yahoo also starred in an 18-month corporate soap opera with Microsoft, as the latter tried unsuccessfully to acquire Yahoo before the companies struck a search advertising deal in July.

That deal, which is awaiting regulatory approval, calls for Microsoft's Bing search engine to be the exclusive algorithmic search and paid search platform for Yahoo sites, and for Yahoo to sell premium search-advertising services for both companies.

 

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