The report in The Wall Street Journal (DJ) saying Yahoo (YHOO) CEO Jerry Yang has decided against "outsourcing" its paid advertising arm to Microsoft (MSFT) or Google (GOOG), to me was good news.
What I like about it is Yang's commitment to long-term solutions that can propel the company forward, rather than short-term moves that will make some shareholders happy, but not deal with the underlying issues. To outsource the search would probably have given the stock price a boost and make Yang a temporary hero, it wouldn't have any impact on Yahoos' overall advertising strengths.
It's also good to see Yang not panicking and attempting to give illusions or expectations of big moves, rather he is trying to communicate calm and considering Yahoo in its multifaceted whole.
Insiders say there won't be any major overhauls for the business, as Yang has decided Yahoo needs to be the "marketing operating system," meaning offering advertisers an array of online ad options.
I think that's the right way to go as it plays to what Yahoo is good at and prepared for.
It seems what Yang is rightly doing is recognizing Yahoo doesn't need a lot of massive changes, but needs to take better advantage of what it already has.
For example, the company is looking for ways to get its 250 million Yahoo Mail users more active. They're looking at adding social networking features to the service as one means of increasing usage.
With approximately 463 million users worldwide, Yahoo has a ton of possibilities for tapping a lot more ad dollars. Project Panama is taking more time than investors had hoped, but it is doing what was expected: increasing revenue per each consumer search.
The problem Yahoo has is they can't forever remain the company with a lot of potential, but not tap it.
With advertisers looking for any quality place to put their advertising online, they've got to market their strengths to them.
The visitors and users are already there, which says Yahoo is offering content people want to interact with. They also get people to stay and come back for more, as we talked about recently.
Yahoo is set to be an online ad machine. If Yang can bring the pieces together and offer the rich advertising platform marketers are clamoring for, Yahoo has a great future ahead of it.
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