Brand Health Check Aug'07

Not Yahoo-ing such much no more?

Financial results show that the Yahoo machine has been stuttering to a standstill of late. The replacing of chief executive Terry Semel on June 18 after a six year reign was proof enough that shareholders were not happy with the search engine's performances and that a change of strategy is in order.

Enter Yahoo co-founder Jerry Yang as the new chief executive who then upped Susan Decker to president. Although most experts were not shocked at Semel's departure, especially since it happened just six days after an annual meeting in which shareholders took swipes at his US$72 million (S$109 million) pay package, many still debated whether this was a temporary and safe choice to buy some time for the company to come up with another strategy.

Currently Yahoo is failing to keep par with the current crop of online hotshots from familiar rivals like Google to social networking phenomenons like Facebook and MySpace. Marketing's Online Media of the Year survey however still named Yahoo as overall winner, edging out Google. The survey involved respondents from Singapore media, creative, public relations and media planning and buying agencies, and clients from across all industries. Light at the end of the tunnel?

Yahoo SE Asia will have to find its way with the newly appointed head of marketing for SE Asia, Bennett Porter who replaced regional director of marketing Dennis Susay who left in May to join Merrill Lynch. In the future, Yahoo will be hoping to avoid past mistakes like missing out on MySpace, Facebook and YouTube.

However, the brand is in need of some solutions other than just more acquisitions - our branding experts have their say.

Diagnosis

The return of Jerry Yang may just be the right move for a beleaguered Yahoo, drawing parallels to how Steve Jobs was fired and rehired by the company he co-founded, and then managing to rejuvenate and propel the Apple brand to its dizzying heights today.

Yahoo came late to the search-driven advertising business, almost two years behind Google. Much of the delay stemmed from the lack of technical capability to build its own from scratch like Google did. Instead, it acquired the search advertising pioneer, Overture, but integration issues with Inktomi, an earlier acquisition to beef up its own search engine expertise, meant that Google had an unassailable lead.

Axed CEO Terry Semel was never technically inclined; as an ex-Hollywood guy, he was known more as a marketing person and deal-maker. In this era of Web 2.0 services, technology and revenue models evolve rapidly, what Yahoo needs is someone intimately familiar with the technicalities behind these new-fangled services and knows how to integrate them to drive advertising opportunities. In this respect, Jerry Yang will provide both the technological vision and credibility needed to turn the brand around.

Cure

Focus on one core idea; are you a search engine or a media/social portal? Then align efforts to communicate that key message.

Acquisitions and content bloat have blighted Yahoo for the longest time. Clean up and provide a consistent user experience across all the Yahoo platforms.

Google's approach to advertising is technological and cold. Be a strategic partner instead by forging close relationships with advertisers and media professionals.

Roger Khor

Senior Brand Analyst

BrandHub

Diagnosis

I remember when Yahoo was fresh and exciting. When it was its imagination that fuelled its passion - and its resulting growth. Now I don't really think about Yahoo at all. And it seems that I'm not the only one.

Yahoo's recent adventures on the acquisition trail seem to be relying more on replicating past success than growing its footprint for the future - behaviour typical of a corporate, not the cutting edge. And while industry professionals may have named it Marketing's Online Media Of The Year, billions of bloggers and online users quite obviously do not feel the same way - and afterall, they are the ones feeding the frenzy, not simply stirring it up.

Yahoo! simply represents an attractive acquisition fund for a whole new generation of web entrepreneurs. What's more, all their best new ideas are no longer their own.

The cure

Current social trends do not lend themselves to traditional business development and marketing practices, so forget about focus groups and sales figures as these only report what has already happened (or at best, the current state of play).

Focus on the customer and their bottom line.

Online users do not subscribe to traditional marketing demographics and models - these are not necessarily "broken", they are simply no longer relevant. That said, the emotional connection to benefits over features still rings true, so focus less on the technology and more on the difference that Yahoo will make to their customers' lives and lifestyles.

Richard Curtis

Director, Corporate Brands

Landor