Daily Debrief: Are the digerati missing the big story at Yahoo?
[ Music ]
>> Ever since stepping out of his Bat Cave for a
one-on-one interview at the Web 2.0 conference, Jerry
Yang of Yahoo has been taking a beating in the press.
But are the digerati missing the big story. Welcome to
the CNET News Daily Debrief. I'm Charlie Cooper here
with my colleague Steven Shanklin [Assumed spelling].
And Steven, I want to take the contrary point of view
here. Much of the chatter has been pretty negative,
especially since the Google deal fell apart. What is
the conventional wisdom missing?
>> Well, I would say that certainly the conventional
wisdom has it right that Yahoo has a lot of problems on
its plate, in terms of growth, in terms of
profitability. But I think it is overlooking to a
certain extent some of the actual efforts the company is
making to reform itself. The --
>> There are a few areas. They have a big advertising
platform overhaul that seems to have some interest.
They actually had a relatively bright spot with their
search advertising in the third quarter, and they are
doing some real work to make their content properties,
mail, Yahoo.com web page, a bunch of other pieces of
Yahoo, actually more compelling for users, and more
compelling for advertisers as a result. So they're
actually doing some real work there. The big problem
with that is that none of that is going pay off in the
next couple of weeks. It's all going to take a long
time to turn into something real.
>> So short term, they're getting hammered in the market
as are most stocks. Long term, the changes that they're
putting into effect will have, presumably, a beneficial
>> Yeah, they have a big audience, and certainly that
audience isn't going to vanish overnight, even if the
company is suffering. So advertisers will continue to
take Yahoo seriously. They don't have the profitability
that Google has, for sure.
>> Who does?
>> Yeah. But when you look at a downturn, I think Yahoo
can say with a certain amount of creditability that it's
going to remain a player, even during a downturn.
Certainly, a lot of the little web 2.0 start ups are
going to be hit a lot harder by it. Small ad networks
or little small social networking sites. Yahoo has 500
million users, or so, you know, people who come by.
That's a lot of traffic. So people are going to be
interested in Yahoo. Advertisers, third party
developers, things like that. So they certainly have --
they'll certainly be a real force, even during a
>> Now, impossible to look inside the board room,
whether or not there is a change at the top. How much
is the company still bound up with Jerry Yang? If he
should go would it make that much of a difference?
>> Hard to say. I think that Jerry Yang still clearly
has a lot of clout on the board, and at the upper
management levels. I mean, he survived a pretty
gruesome year for the company with, you know, not
fantastic financial results and you know, people are
still very angry about the Microsoft acquisition saga,
which a lot of people thought that was going to happen.
And they were pretty close. Yahoo held out for a little
bit more money and it all fell apart. Now in retrospect
that looks like the best deal Yahoo shareholders could
have gotten. So -- but you know, Jerry Yang has a lot
of clout inside the company still, it appears, even
though he's getting a lot of criticism from outside the
company. If he were to leave I think a lot of the
reforms the company has put into effect are well on
their way, so I don't think the company would fall apart
>> So if Yahoo's plan is to rewire itself reach
fruition, as we look out over the horizon, how about
that future Yahoo look different from today's Yahoo.
>> So what would happen is it would have more users, and
the users would be more active. And therefore there
would be a lot more places will advertisers could show
ads. In addition, the advertising would be more closely
targeted toward people where, you know, people who would
-- want to see those ads. So the advertisers would get
to the markets they want to reach better, and
advertisers would be able to measure the effectiveness
of their ads more easily. And they'd be able to place
them more easily. So it would be easier for advertisers
and there would be more stuff available for users to do
on the site. So for example, if you like something on a
Yahoo site you can say something about it and, well, I'm
your pal. So I would notice that Charlie Cooper just
said something nice about something, because we're all
on this, you know, this Yahoo network. It's sort of
adding a social component to how people use Yahoo. So
it would be more users, more engagement for the users
that are there, and more advertising, and more precision
and -- for the advertisers.
>> And presumably, more value attributed to the stock.
But of course everything is predicated upon the market
meltdown -- or whatever you want to call it --
>> Thanks, Steve.
>> On behalf of CNET News, I'm Charlie Cooper.
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