Davidcard[Posted by David Card]

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Yahoo’s new CEO should make an inventory check of Yahoo’s core assets, and balance the near-term with the longer term. Yahoo’s core positives are:

  • A large, loyal, general-purpose audience
  • Leadership in online display advertising, and a solid number two overall (14% of 2007 US online ad sales, vs. Google’s 31%), and the resulting excellent relations with agencies and advertisers
  • A collection of category-leaders: e-mail, news, sports, finance, a collection of women’s categories, music
  • Opportunities in mobile, local, and publisher partnerships

The new CEO must make some hard decisions on assets that Yahoo has failed to exploit:

  • Search marketing. Though it’s number two, Yahoo has not proven any synergies between owning search technology and an SEM marketplace and display (better targeting, attribution measurement, cross-format campaigns)
  • Social media. Flickr, IM, and Answers do not a business make. Opening up social media & other services for mashup is interesting (see BOSS), but I’m less sanguine on the "social media as air/electricity" metaphor than other analysts
  • Advertising Platform. So far, Yahoo has been far more successful hand-crafting (i.e., on golf courses) integrated marketing campaigns than it has making a technology/marketplace play. Either Yahoo can’t increase the value of remnant inventory via targeting, or it can’t prove it to advertisers, or there’s no demand for targeting. There’s plenty of demand.

Ironically, with its audience and some of its core programming assets, Yahoo is in a great position to figure out — with its agencies and advertisers, and its own salesforce and programmers — how to do real, live social marketing. Not just selling cheap CPC banners on MySpace. But rather tapping into the streams of brand advocacy, viral passalong, and insights based on observing communications and content behavior. But it doesn’t have strong social media assets, and its publisher relationships are more traditional.

Colleague Shar Van Boskirk’s take.