Yahoo Vet Millard: Microsoft Deal Was "Inevitable" (MSFT, YHOO, MSO)
Wenda Millard, who's appearing at the DeSilva+Phillips media summit today, is supposed to be talking about her new gig at Martha Stewart Living. But given recent events, she's also spending some time talking about her last job -- running sales at Yahoo.
Wenda on the MSFT bid:
Wenda on the MSFT bid:
It was absolutely inevitable and predictable. Yahoo lost sight of who they are and who their customers are. Yahoo's perception is that their only competitor is Google. But 95 percent of their revenue comes from advertising -- so their competitors are really the broadcast TV networks. They think they're in the search game,when they should really be in the brand advertising game.
...It reduces choice for advertisers. There would be two Goliaths, down from three. Advertising is a business that is both art and science. The merger focuses unduly on science. With Google-Doubleclick, and Yahoo-Microsoft, it is as if the scientific community is taking over advertising. And advertising is not about science.
In other words, we must stop this crazy trend toward accountability for marketing dollars! Damn you, Google.
doesn't she mean, SHE and her tiny group of cronies at Yahoo lost sight?
Amazing! Gosh, who knew Ms Millard spent her many years at yahoo fighting for strategic change? Guess that's why she and Mr Semel and the rest of those (now clearly) hamfisted yoyo's took home the huge bucks -- fighting for the shareholders against wicked shortsighted management!
From 2002 to 2005ish Y! dominated because of Wenda's Brand Dollar vision. We had the systems and tools to deliver and she created the sales strategy that attacked traditional budgets and sent them only our way. AOL and MSN struggled for that entire period because they had a poor sales strategy (do we sell P&G our DR/CPA product or a $40 CPM Big Idea? DR because I get paid the same way)
Then something happened. Search wasn't pulling its weight. The engine itself had no relevancy built into it, we were losing out on revenue upside compared to google, and google was just simply so much better. Still is. Google's blockbuster revenues put the pressure on Y! to continue growing + pick it up.
MSN and AOL started to improve as well and those display dollars that were once so heavily favored to Y! started going to the other 2. Y! was losing it's share in display and getting owned in search.
We could only increase display CPMS 20% max Y/Y but the expectations were greater. Given the loss in share an internal debate began. David K. , who now has Wenda's job, ended up winning the battle. He convinced management that Y!'s way out was technology - ROI, Retargeting, Exchange models, etc. Take every digital advertiser online today run it against the sweetest performance technology and watch it deliver. Ad.com had made it look easy enough for AOL and start ups like Right Media were talking a big game: 'Buy us and we'll drive your yield way up.'
So where do things stand now? Here's today's reality for Y! - there are simply no models, no amount of advertisers (brand or DR), no technology and no budgets that can produce the amount of yield necessary to boost revenues TO THE DEGREE WALL ST. WANTS TO SEE. Y! is still printing money folks, just not at the rate to satisfy WS. Will the "Big Bet" that David K. has made pay off for Y!? - no way. It will only devalue the brand in the eyes of Brand Marketers who have already begun to see Y! as a DR play.
Try asking P&G for $10M at $20 CPMS when you just sold them a $5M performance deal on a CPA. Hell, ask an MSN rep who spent the early 2000s pimping out MSN on a CPA because J-Brad didn't have the vision or a stratgey - it's a hard job changing perceptions folks.
The merger of Y! and MSN - a disaster. The biggest distraction ever that will mean huge upside for their competitors while both sides try to figure it out. There's 4-6 adservers just between the two of them (Atlas, MSN, Y!, Right Media, Blue Lithium, and Ad Center). WTF? Theres absolutely no one, and I mean no one, at MSFT who could handle this deal if it closes. McAndrews has his hands full. Berk didn't work out (great guy though), who else? Yusif? come on.
My big bet:
Say so long to the portal. Portal traffic is down and will continue to decrease as the 'portal model' becomes obselete. (See JPMorgan's Nothing But Net '08. The Big 3 accounted for 42% of minutes spent online in '02 down to 29% in '07). The idea that by 2012 a 'portal' will tell me they've got everything under the sun online and I never have to leave is ridiculous. The digital consumer is smart now - thanks to portals. And if you're not the latest addictive social network, good luck commanding huge CPMs on dwindling audience numbers who spend zero time on your portal other than to check their email. *MSN's Home Page hasn't grown in 3 years even though their rates do each year by 20%. Refute that for me will you.
dutchboywasright
From 2002 to 2005ish Y! dominated because of Wenda's Brand Dollar vision. We had the systems and tools to deliver and she created the sales strategy that attacked traditional budgets and sent them only our way. AOL and MSN struggled for that entire period because they had a poor sales strategy (do we sell P&G our DR/CPA product or a $40 CPM Big Idea? DR because I get paid the same way)
Then something happened. Search wasn't pulling its weight. The engine itself had no relevancy built into it, we were losing out on revenue upside compared to google, and google was just simply so much better. Still is. Google's blockbuster revenues put the pressure on Y! to continue growing + pick it up.
MSN and AOL started to improve as well and those display dollars that were once so heavily favored to Y! started going to the other 2. Y! was losing it's share in display and getting owned in search.
We could only increase display CPMS 20% max Y/Y but the expectations were greater. Given the loss in share an internal debate began. David K. , who now has Wenda's job, ended up winning the battle. He convinced management that Y!'s way out was technology - ROI, Retargeting, Exchange models, etc. Take every digital advertiser online today run it against the sweetest performance technology and watch it deliver. Ad.com had made it look easy enough for AOL and start ups like Right Media were talking a big game: 'Buy us and we'll drive your yield way up.'
So where do things stand now? Here's today's reality for Y! - there are simply no models, no amount of advertisers (brand or DR), no technology and no budgets that can produce the amount of yield necessary to boost revenues TO THE DEGREE WALL ST. WANTS TO SEE. Y! is still printing money folks, just not at the rate to satisfy WS. Will the "Big Bet" that David K. has made pay off for Y!? - no way. It will only devalue the brand in the eyes of Brand Marketers who have already begun to see Y! as a DR play.
Try asking P&G for $10M at $20 CPMS when you just sold them a $5M performance deal on a CPA. Hell, ask an MSN rep who spent the early 2000s pimping out MSN on a CPA because J-Brad didn't have the vision or a stratgey - it's a hard job changing perceptions folks.
The merger of Y! and MSN - a disaster. The biggest distraction ever that will mean huge upside for their competitors while both sides try to figure it out. There's 4-6 adservers just between the two of them (Atlas, MSN, Y!, Right Media, Blue Lithium, and Ad Center). WTF? Theres absolutely no one, and I mean no one, at MSFT who could handle this deal if it closes. McAndrews has his hands full. Berk didn't work out (great guy though), who else? Yusif? come on.
My big bet:
Say so long to the portal. Portal traffic is down and will continue to decrease as the 'portal model' becomes obselete. (See JPMorgan's Nothing But Net '08. The Big 3 accounted for 42% of minutes spent online in '02 down to 29% in '07). The idea that by 2012 a 'portal' will tell me they've got everything under the sun online and I never have to leave is ridiculous. The digital consumer is smart now - thanks to portals. And if you're not the latest addictive social network, good luck commanding huge CPMs on dwindling audience numbers who spend zero time on your portal other than to check their email. *MSN's Home Page hasn't grown in 3 years even though their rates do each year by 20%. Refute that for me will you.
dutchboywasright