Yahoo steps up its "journey back to respect"

OvumYahoo chief executive Carol Bartz flew into the UK last week to talk up the company’s coup in bagging the rights to show online highlights for UK Premier League football, starting this August.
 
Bartz’s visit to the UK, her first as CEO, follows Yahoo’s recent posting of strong first-quarter profits. Bartz’s mood was upbeat as she highlighted priority areas for the company, which includes ramping up on quality content, location services, and hitting the acquisitions trail.
 
There was no news on big innovation projects, but in our view this is not a bad thing for Yahoo at the moment. Yahoo went through tough times prior to Bartz’s arrival, and her goal of putting the company’s house in order, keeping the strategy focused, and getting the balance sheet strong again is the right one.
 
Yahoo is determined to be more than a search and display machine, and towards this has been building a portfolio of quality content. Sports is a key focus, and in the US Yahoo has deals with the NBA (basketball), PGA (golf), NHL (hockey), and MLB (baseball).
 
The pursuit of UK Premier League football rights comes as no surprise, but the fact that Yahoo secured them might be. Virgin currently holds the rights and past holders include BskyB – both content powerhouses. In this context, Yahoo has done well and no doubt paid good money for the privilege.
 
We can expect to see more deals of this kind – Bartz intends to go “manically” after content, and as realtime as possible. To make this kind of big-ticket content strategy stack up, Yahoo needs to be confident it can pull in the audience and advertisers to recoup the costs.
 
 
On the plus side, it already has 600 million users across all Yahoo properties and revenues from display advertising are increasing (20% in 1Q10). The deal also gives Yahoo the right to syndicate all, or part, of the Premier League highlights content to third parties in the UK. Short-form video clips are a great fit for mobile and there are good partnership opportunities here.
 
The acquisition trail beckons
 
Besides content, other areas of strategic importance for Yahoo include location services and mobile services. Acquisitions are also on the agenda, which not surprisingly raised the question of whether Yahoo is interested in buying Foursquare, a rising mobile social location service with around 1 million users.
 
Bartz would not comment either way, but it is known that Foursquare is seeking either further investment or a buyer. Social media has been important for Yahoo in the past but efforts have taken a back seat to its big content drive.
 
Yahoo has a decent portfolio of communications services and social-oriented property in the shape of Flickr and Yahoo Answers. Two years ago it was talking about “marbling” social media and community through all its properties – a good plan that has fallen by the wayside. It needs to revisit its social media strategy, and mobile and location-based services are a good place to start.
 
Bartz has spent a year redefining what Yahoo is about. Its mission is to be “the web of one” at the center of people’s lives. The strategic focus is on user experience priorities based on personalization and quality content, smarter use of data and, of course, how all these strands better support advertising.
 
This is consistent with the agenda Bartz set for Yahoo at the company’s investor day last October. This agenda may not be flashy and it may not answer the criticism by some that Yahoo is not being “innovative.” By this critics usually mean that Yahoo should be more like Google, but copying Google is exactly what Yahoo should not do.
 
 
We are glad it is not trying to run before it can walk. Yahoo is getting back to a place of strength and stability, which is the appropriate springboard for innovation.
 
Its recently posted first-quarter results suggest it is on track. Net profits for the three months ending March 2010 almost trebled to $310 million compared to $118 million in the same period last year, helped by the search deal with Microsoft.
 

Revenues for the quarter were solid but slightly below expectations at $1.13 billion.

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.