Yahoo’s chief executive has confirmed plans to shut down several products not viewed as core to the company.
Scott Thompson late yesterday announced to analysts the company’s decision after presenting its financial report.
He says he posed the question: “How would we build Yahoo from the ground up if we were building it from scratch today?”
He consequently thought the answer would be “shutting down or transitioning roughly 50 properties that don’t contribute meaningfully to engagement of revenue”.
Thompson did not distinguish which units of the company are to be dropped but noted that news, finance, sports, entertainment and mail are not among them.
“Each of our products and services may individually generate more engagement than most start-ups or even mid-sized companies in certain markets, but that does not mean that we should continue to do everything we currently do,” he said in a conference call by Seeking Alpha.
He also noted that its search venture with Microsoft is “not yet delivering” what has been expected of it.
In 2009, the two companies joined in the idea that Microsoft was to provide Yahoo with the search results carried on Bing service, which will then cater to Yahoo for its audience. On top of this, Yahoo’s sales force would target “premium” advertisers on behalf of both parties.
The chief executive – who worked for PayPal before joining Yahoo in January – says the United Kingdom and France are currently transferring to Microsoft’s search algorithm, and that sometime in the future, parts of the EU and Asia are to follow.
On the other hand, he added that Yahoo was “working hard with Microsoft” to deal with the unproductivity of the software firm’s AdCenter technology concerning the expected revenue it was supposed to deliver.
In the meantime, Yahoo has protection against the shortcoming by a “revenue per search” guarantee that Microsoft signed. However, it is due to expire by March next year.
Thompson also received queries for details regarding his promise to make better use of the company’s vast store of data.
He said that cookies are for personalized news content.
“I only care about the Boston Red Sox,” he says, stating the American baseball team as an example.
“So when I visit Yahoo Sports today, the only thing I actually want to see is Bruins, Celtics and Red Sox. And that’s uniquely relevant to me, personalized for me and we ought to be able to do much, much more of that than we’ve done to this point.”
He also adds that the data would help advertisers gain better understanding of how visitors use the site and request “almost real-time” analytics.
This is the latest update of the company’s plans of a turnaround promised for Yahoo, but some are rather impressed with the comments.
Ian Maude from Enders Analysis quips:
“I’m a bit more hopeful. He’s obviously no holds barred, very candid and has a good understanding of the strategic issues. The question now is whether he can deliver.
“The key will be getting the search and banner advert revenues higher – I’m not sure what the alternative to the Microsoft deal would be if they can’t get that right.”