Yahoo’s Levinsohn: ‘I’m Not Crazy’

Three Junes ago, Ross Levinsohn and his investment partner Jon Miller were caught up in the drama of Yahoo as Microsoft (NSDQ: MSFT) tried to acquire the company. Their names, individually and separately, were bandied about as possible board members or candidates to run Yahoo (NSDQ: YHOO). Now both are out of the private investment business; Miller leads digital efforts at Levinsohn’s old News Corp (NSDQ: NWS) stomping grounds and Levinsohn, EVP-Yahoo Americas, is the company’s newest evangelist.

In one of his first interviews after seven months spent learning the business from the “inside out,” Levinsohn talked to paidContent about Yahoo’s underestimated value as a content company, Carol Bartz as CEO, potential M&A activity, and more. Edited excerpts below:

Did your view of Yahoo change when you went inside? At one point, you were an advocate of some pretty big changes for Yahoo.

I’m an advocate for change in general. We’re here at D and what you’re hearing from the first two speakers Eric Schmidt and Reed Hastings is complacency is what kills most companies. Change is good; even if you’re successful you have to evolve. One of the great things I learned at News Corp. was you could have a senior leadership team as comfortable with change as anything … and I think Rupert is one of the great change agents in the world.

Do you think Yahoo belongs as a standalone company?

Sure. If you step back and take a look at the business, here we are 16 years after David (Filo) and Jerry (Yang) founded the business, here we are with a vibrant company that’s making a billion dollars. There aren’t a lot of businesses that are consumer facing that are touching 700 million or so people every month.

I think Yahoo doesn’t get the credit for what it’s achieved over the last decade and a half and if you really just focus on the core business and what we’re doing every day you’d be hard pressed to find another business in our sector, our category that’s doing as well as we are. Some of it is talking about those things, focusing on the pieces that are successful and not getting so bothered by the noise.

I’ve been around a long time, I’ve ridden that wave up, I’ve crested and seen what happens when the wave crashes. You know it’s never as great or as bad as the industry seems to believe. You just have to have patience with it.

Why hasn’t Yahoo been able to get its story out and keep it in the forefront despite other events?

I spent six months digging into the company making sure I’m not crazy — and I’m not crazy. Yahoo is the premier digital company in the world and embracing that isn’t a hard thing to do. That’s just fact based. Tell me what other type of media can sit with you and say I’ve got the top 19 #1 or #2 newspapers, I’ve got the top 20 shows, I’ve got the 19 of the top 20 radio stations, 19 of the top 20 magazines. Duh. But you have to fully embrace that. You can’t half ass that.

When you came in I thought maybe Yahoo has someone who can tell the story but you’ve been quiet.

This was very planned, Yahoo has 14,000 or so people. It’s got history, it’s got a legacy, a number of thriving businesses. There’s no one who can walk in the door on day one and say ‘I know exactly what we should do.’ … At investor day, “It wasn’t Blake (Irving) has one view and Ross has one view and Carol Bartz) has one view. In a company of 14,000 people, that would be complete dislocation.

There are some distractions now: the Alibaba situation and this latest meme about what happened when Carol’s contract is up.

The China stuff is going to work it’s self out. It’s not my place to talk about. … The noise about Carol or any CEO is always out there. It’s irrelevant to us working for her. She has been an incredible boss for me, has hired a great senior team and let’s us do our job.

What was the biggest surprise when you got inside?

The dislocation between the groups. These are easy things to fix, like gee, can product and region get on the same page? Blake’s a great guy … Before I even got here we were at a dinner and we were finishing each other’s sentences. Sales was dislocated,customer advocacy. For a communications company, we don’t communicate very well sometimes.

(Admission: this is when I started laughing inadvertently as I thought about the number of Yahoo re-org stories we’ve written here in just the past few years.)

What do you want to do with M&A?

M&A is not pressing, What’s pressing is look at these things we have, put the right people around them, get the right strategy on them, leverage the assets we have. There’s no one even close that combines reach, scale, canvas — the type of environment we create for content — and data. We’ve got people logging in and registering and doing things on Yahoo for 16 years. Internally we call it ‘science, art and scale.’

There are a lot of people that do a lot of things good. Facebook’s great on the social graph and the data. Google’s great on the search and the data. AOL (NYSE: AOL) has the creative canvas.

There are no game changing acquisitions for Yahoo. It’s a multi-billion-dollar company. One day you wake up in 2005 and you buy MySpace and it changes the landscape for News Corp. We don’t need it and we’ve got such incredible assets sitting here.

(Yahoo did acquire ad startup 5to1 for $28 million; Levinsohn was chairman of the company founded by several Fox Interactive Media alum but resigned and divested his shares after joining Yahoo.)

Yahoo recently hired Jai Singh (The Huffington Post, CNET) as editor in chief. What is he going to do that’s different from people running the sites?

One of the big things that’s important for us is voice. Yahoo has been the preeminent aggregator in the world for 16 years. Some would call us a portal, some something else. I view us as a network, As a network you must have distinctive voice. You must package well, you must program well. We haven’t been doing it in a cohesive manner. We’ve never had an editor in chief.

Yahoo has been a good aggregator and now needs to do more than that. Yahoo Sports broke the Jim Tressel story. Were the most humble company I’ve ever worked for. We don’t celebrate our successes like we should it by placing the emphasis on wins.

What’s your challenge for the next six months?

Phase one was strategy and integration of people. Phase two is execution around content programming that we’re doing, optimizing our search business. Optimizing the technology that sits powering all this stuff. Probably at the top of this list is how we sell, how do we go to market with this story in a way that advertisers get a breath of fresh air from Yahoo. You don’t know how many times I hear, Ross, we want to spend more money with you but you guys are hard to do business with sometimes.

How do you use things like Flickr, those assets that are within Yahoo and bring them into today’s scheme?

Flickr is like having a Ferrari in the garage that you don’t take out very often. It’s that good. It’s a jewel. I and Blake and the rest of the team look at Flickr as a much broader social strategy. Flickr was one of the first social networks in a way. The assets that sit within Flickr, the photos that consumers have contributed are amongst the best photos in the world whether they’re uploaded by consumers of taken by professionals. Today, good luck trying to find how we integrate Flickr photos into news stories. There was a tsunami in Japan and there were thousands of photos on Flickr from it and our news editors don’t try to pull those. We have this incredible asset here and we can surface the work of millions of people in front of millions of people. Just integrating Flickr into our billions and billions of page views around content, how hard is that? That’s an easy one.

Yahoo Answers is the biggest answers site in the world. Integrating answers into content– that’s part of a social strategy, part of a local strategy. You have these incredible pieces of the puzzle so why aren’t we doing that? They’re doing their own thin, region’s over here doing its own thing, products over here doing its own thing. Not any more.

Spend an hour with Yahoo and tell me where else you can get all this stuff. We’ve made it harder than it should be. That’s over. It can’t be over unless you have agreement and alignment in a company the size of Yahoo but we do.