Yahoo’s Latest Pitch To Investors


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At the Piper Jaffray Global Internet Summit today, analysts wanted to know why Yahoo (NSDQ: YHOO) was a good bet. The company’s repeated response: Data. Yahoo senior director David Kopp and VP Dev Patel fended off questions about challenges to the company’s businesses by saying that the company had a breadth of information about its users that it could use to target ads. Two transcribed exchanges, after the jump.

Analyst assertion: I think there is this belief that Yahoo has the most valuable property on the internet — the home page — and beyond that it is a display ad business that over time will become more and more fragmented and so the value in Yahoo today is a ‘diminishing asset.’

Patel: The Yahoo (home page) is a great looking glass for our users. That’s not where we stop. In everything else — whether it’s finance, entertainment, news, sports, Flickr — all these assets stand alone by themselves. When users come to Yahoo across all these assets, including the home page, they do one thing that is the most exciting, at least for me — which is they leave a data footprint. They tell me what they’re interested in, they tell me what kind of things they’re searching on, tell me what kind of articles they’re reading… That’s something unique about Yahoo, way beyond the home page, which you singled out… Data is the key that unlocks the value of inventory. There’s lots of inventory out there in which you can place advertising. Unless you know the user or something about the user on the page on which you are about to deliver an ad that inventory is going to have very little value.

Analyst assertion: There is some belief that (vertical ad networks) are gaining share from Yahoo. How do you view vertical ad networks? How are they going to fare in the next two to five years?

Kopp: The advertisers are going to get better performance from folks who are actually able to marry data and reach and inventory together. The ad networks are in a challenging position because they are downstream. They buy inventory from folks like Yahoo… And it’s not like they call on different people. There are about 10,000 advertisers in display. It’s not like we don’t touch them all or touch enough of then. If I’m going to be in the ad network game, vertical specialization is absolutely the best place to be, but … when you look at our data offering and the targeting products we offer we developed essentially our behavioral targeting products, they are vertical offerings, so autos, health etc.

The pitch comes as Yahoo is increasing its outreach to investors. For instance, the company hosted its first analyst day in years last month, during which it also talked up how much it knew about its users.

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