Blog Post

Has Yahoo Picked Marketing as Its Game?

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Yahoo is cooking up new media model — one that involves creating little-to-no content. The company is harnessing its ability to build online audiences around brands, something it trumpeted at a media lunch held Tuesday at its Sunnyvale headquarters.

Throughout presentations from the Yahoo Media Group, a part of the new “Audience” division, the key word, uttered more times than we could count, was “promotions.” And so, in both overt and subtle fashion, Yahoo is a company transitioning itself into what’s essentially a marketing platform.

We’ve all wondered how Yahoo will emerge from the shadow of Google and its peanut butter demons. Many have long said Yahoo should define itself as a media company and get out of this technology game. Perhaps a compromise is for Yahoo to put its long-nurtured skills at attracting internet traffic as well as its favored status among brand advertisers to good use.

The most obvious example of Yahoo’s increasing bent towards marketing is its new “Brand Universe” initiative, announced in November. The company will tie together its disjointed properties — such as search, groups, Flickr, Answers, avatars — to lead back to pages about a certain pop culture topic — for instance, Nintendo’s Wii.

The discriminating factor here is popularity, not biz dev deal-making. Monetization is almost an afterthought; it will be varied on a case-by-case basis, and in some instances, the company that owns the brand will not even be involved, said Vince Broady, head of games and entertainment, over and over again to a bevy of incredulous reporters.

“Our whole purpose is to support their brand,” insisted Broady. “In some cases revenue sharing is not a huge priority.”

Yahoo says it will launch 100 such pages by year’s end; next up are the Sims, Halo, Lost, the Office, Transformers, and Harry Potter.

“Brand Universe” may be the most explicit projection of Yahoo’s increasing orientation towards marketing, but there are many others. A presentation about Yahoo TV and Yahoo Movies emphasized promoting pilot episodes and movie premieres; an overview of Yahoo Music highlighted contests, online-only tracks, and the ability of the site to measure buzz about a new single.

Throughout the presentations, original content efforts were clearly deemphasized. Scott Moore, head of news and information, repeatedly labeled Kevin Sites’ war-zone reporting on Yahoo News “good PR.” C’mon now people, that’s what you tell analysts, not reporters!

The marketing business may not be Google-big, but it’s something Yahoo can do well. So far, however, the talk about monetization is lackadaisical. That’s most likely a result of the recent Yahoo reorg, which leaves the financial stuff to an entirely different division. Now that could be a bit of a problem.

18 Responses to “Has Yahoo Picked Marketing as Its Game?”

  1. I like the brand focus – but I don’t like the idea of a MS/Yahoo merger. Why wouldn’t an offline media giant (NBC, Disney. Viacom) come in and buy Yahoo. The market cap is a bargain and that’s what the offline companies do best – BRAND. That’s what all off line media is about. Is it crazy to think that online ad dollars would move away from the CPC model and toward a model where reach and brand rule the day? I say no! After all, the TV ad business is something like $60B per year without a single click to be counted. Add up print, outdoor, radio and BRAND dwarfs even the mighty G.

    Yahoo is a bargain from that stand point, so let’s see if Zucker, Bodenheimer or Redstone figures it out first.

  2. When Kevin Sites was allowed to report as he saw fit, we had a true window on the world. It sounds like he is being shackled to the god of advertising. Originally this is what made his coverage different from the garbage we’re fed on the networks. It is a sad day for all of us.

  3. OK let’s not talk about underlying technology (mashups) or whether someone else has aggregated or not. Creating a brand or 100 brands is about resonating with an audience. Yahoo! are learning to leverage their investments in brands to create deeper meaning with a broad range of customers. In the olden days I called it cross-marketing. But it has to resonate personally. So the content must mindmatch the visitor so they will come again and again. It’s not just the unique visitor stats that count; it’s the nubmer of views, etc… It’s all about building deep relationships. Not technology. When you make toast you do not think about the little red wires inside. Yahoo! is making toasts–light ones, gold ones, dark ones. The visitors’ response will tell all. And frankly there is a hunger unparalleled in history for advertising that works–traditional media is not returning history’s results. Yahoo! is smartly rising to the call. And I assure you it is a loud cry. It’s a good thing guys. One of you commented that Vonage was misplaced on the wii page. Huh? An almost pure-play company who provides VOIP. This is a relevant place for Vonage and better than the expensive irrelevant audiences they were reaching with that lobster on TV. Yahoo! indeed.

  4. Where is Yahoo Shopping on that Wii page? Why is message boards in the top nav, instead of Yahoo Answers?

    The page needs more work, they didn’t tie together their best properties…it’s another internal gaff, honestly. One Yahoo team not playing nice with the others. Since the page is produced by the Media Group, the Shopping integration is down in the footer…and why link to a message board in the top nav with little to no content?

    There are dozens of startups trying to create a similar page. This smacks of a project the corp marketing folks came up with a while ago when I was there:

    Take a look at that page…while it’s not the same, the idea is the same: let’s attempt to tie together some Yahoo services into one mashup. Trouble is, there are 8 yahoo properties with a great Wii experience, and even this page doesn’t tie them all together well.

  5. I get it now. If you have a jumble of brands that don’t make any coherent sense together, just call it a “brand universe” and suddenly will rhyme with Flickr. It’s easy for the behemoths to acquire lots of properties (look at how many brands IAC has) but it’s not so easy to get them all to play in the same sandbox.

  6. I’m going to be a contrarian here and say this is really smart if done correctly. First and foremost, the variable costs associated with creating one of these new brand sites are pretty low.

    If the idea is to have targeted ads, I like this proposition more than I like those little blue links on the side of searches in Google in that IF these sites get traction than the value of the customer (die hard fans of whatever the brand is) is a lot higher.

    There are also lots of possibilities of different revenue streams (selling data, referral fees on products and packaging advertising such that if you want to be on the brand site you also get involved with Panama).

    The only challenge is to gain traction for a particular brand or product and to that end I think they made a mistake with how they launched this. If I love the Wii, chances are I’m already reading some established sites that already have the community and all the network effects that make them hard to displace. Treo users already know about Treonauts, etc.

    The way these guys SHOULD HAVE launched and should consider in the future is to make sure that sites exist day 1 (or even months prior to) product launches for items like the Zune such that they have some sort of chance of becoming the main place people congregate for news, discussion and reviews. One would imagine they could even get some money from Microsoft or the various brands for putting something like that together (yet another revenue stream).

    Another problem: after clicking on the Wii link I see a big ad about switching my long distance to Vonage. Is this targeted advertising?

    This idea is a really good one but the execution needs to improve.

  7. Wow, brand mashups with little or no content aggregated from other places?

    I get an e-mail about THOUSAND INSTANT WORDPRESS SITES WITH INSTANT CONTENT on a regular basis, perhaps I should forward some of those to Yahoo!

    Hint: should be nicely monetizable.

  8. Peter.. that was great!

    It makes me wonder when the Yahoo/MS merger talks will heat up..both companies are heading in the wrong direction and this is a tell-tale sign that they (Yahoo) have had a recent major corporate shift in philosophy ..are they basically admitting that they cannot compete w/ Google?