The Value of Yahoo - New CEO says "Give Me Just A Little More Time"


On the analyst call yesterday newly appointed Yahoo CEO, Scott Thompson (now former president of eBay’s PayPal unit), basically answered all of the questions directed at him with the words from the Chairmen of the Board’s hit 1970 single, “Give Me Just A Little More Time.” While he chose not to sing, he did hit all of the appropriate high notes citing the:

  • Iconic nature of the Yahoo brand and its huge base of active users (#4 in worldwide web traffic)
  • The quality of the employees
  • Need to concentrate on the core to deliver customers compelling experiences because advertisers want to be where customers hang out
  • Yahoo technology expertise and “history of innovation”
  • The great opportunities that lie ahead

Thus far, Wall Street’s reaction to the Yahoo board handing Thompson the keys to the executive suite has been less than enthusiastic. On a day when markets closed slightly higher, Yahoo was down 3.1 percent. eBay suffered significant collateral damage with the revelation by its CEO John Donahoe that he was informed of Thompson’s departure on Tuesday. eBay’s stock closed down 3.8 percent and speculation that its anticipated spin-off of PayPal was now on hold certainly ruffled some investor feathers. And, as if to add insult to injury, after a good night’s sleep the stock continued its tumble.

Yahoo Chairman Roy Bostock, in his remarks introducing Thompson to the analysts, said Yahoo felt they found the right person for the job based on his team building and operational experience, along with his shepherding the phenomenal growth of PayPal in the last few years from $1.8 billion to $4 billion.   However, even on the call, questions were raised as to whether a self-admitted “geek” and transactions guy had the creativity to transform a media/content company, and the morning call did nothing to change trader views on the appointment.

Does Wall Street Have it Right?

The chilly reception of Thompson and its aftermath lead to two interesting questions, “what is the value of Yahoo, and is the ‘smart money’ really underestimating the value of Yahoo? The last has been a saga for some time, as the stock price was hammered down to its low in August and only recently struggled back into the mid-teens based on lots of M&A talk, as well as the probability of it ending its relationship with its Asian partners which involves billions of dollars. Many are rooting for an announcement before Yahoo’s earnings come out on January 24.

Let’s put aside for the moment the perception that Yahoo (like AOL), has been poorly managed with a board that has shown unusually poor judgment in its selection of CEOs.  I am even going to shelve the fact that every day inboxes and websites are filled with the latest and greatest from the likes of Google, Facebook, Apple, Instragram, YouTube, Baidu and a host of others, while Yahoo when mentioned gets headlines about its “troubles.” 

I keep coming back to the fact that in 1995 Jerry Yang spoke to a new media group I was a member of and convinced me to make Yahoo my home page. It has been and is likely to remain so. The reason is the quality of the experience. 

I am loyal because despite some obvious warts, My Yahoo and remains a nice, if somewhat cumbersome, digital dashboard for the things I like to keep track of. This despite the fact that I leave Twitter and Facebook open all day, have Chrome as my browser and prefer Google for search and Gmail for email, and get my music from iTunes and Pandora.   Albeit, this all may be anecdotal based on the experiences of a “baby boomer”, but the point is that Yahoo also happens to be how I follow companies, get news (trade and general) from around the world, follow real and play fantasy sports, and maintain up-to-date information on my favorite ski areas.

In other words, it serves many of my deepest needs (I don’t need to know what all of my friends are doing all of the time, especially during work hours), and in many ways is more intimate and engaging than most social media. Enriching those experiences and aggregating them in new and exciting ways where I feel compelled to spend more time is Mr. Thompson’s great challenge and opportunity. There is still room to maneuver in this space, particularly in light of the total turmoil in all content delivery marks and the coming disaggregation of the TV experience.

Just for grins I took a look back at Nielsen’s top U.S. web brands for November of 2011 (the last month they had numbers) to see what I could learn about Yahoo and its potential value.   I won’t reproduce all of their finding here except to cite a few numbers:



Total Internet Audience (000)

Time per Person (hh:mm:ss)














MSN/Windows Live/Bing







* Yahoo duration data shows an artificial decrease for May – November 2011 and does not reflect the activity on these sites.



Sessions/Visits per Person


Domains Visited per Person


Web Page Views per Person


Duration of a Web Page Viewed


Online Time per Person


Source: Nielsen

If you are an advertiser these metrics are interesting but probably not useful since comparing time spent on sites that are pinging you constantly and sending alerts to your email and mobile phone which may initiate a visit are not the same as ones like Yahoo! where you need to initiate an interaction. 

Time may be the one resource we cannot create more of, and is prized by every Internet company, but there is a huge difference between time on and time interacting. In fact, I would argue that the more interesting metric would be an enriched comparison of time on a site/number of advertising clicks and time on page/number of advertising clicks. In a world where we can have multiple sessions open and leave them open all day, quality may be much more important than quantity. 

For instance, Netflix has stated that its average user is spending over an hour per day looking at streamed video. YouTube has hundreds of millions of people looking at video, for only a few minutes at a shot and these people  then search for something new and different.

Therein lies my issue with the Wall Street guys in their evaluation of Yahoo! Based admittedly solely on intuition, it would seem that the Yahoo! session by its nature is more conducive to me looking at an ad than the Google, Facebook or YouTube experience. It would be interesting to see a tale of the tape on this because I really don’t wish to change my home page. In fact, I will make an offer to anyone out there who would like to discuss metrics to send me an email. I am sure inquiring advertisers would like to know. 

This seems like behavioral marketing to the max, and some combination of demographics and psychographics to find out what it is about various sessions that engages clicks on advertising could be the holy grail for propelling a re-evaluation of Yahoo’s value. Yes number of unique visitors, page views and average time on a page are critical metrics, and have tools for offering users to not want to leave your site (related articles, related offers, etc.) are key as well, but getting to the heart of the matter, i.e., what compels a change in attention and hence a change in engagement during a session is where it is at. 

Yahoo certainly has the raw assets to leverage the nature of the interactions generated by its content. Indeed, it can be argued that because of the type of content offered and the way it is consumed, the value to an advertiser of an active user of Yahoo! could very well be higher than that of other big websites, and hence the stock market is being a bit harsh. We shall see if Mr. Thompson’s declaration of focusing on the customer experience unlocks the doors to future differentiated value that is recognized by customers and thus by advertisers. It is going to be interesting.

I close with one observation. Other commentators has remarked about Mr. Thompson’s plea for a little more time. It will be interesting to see just how long he is given. Reality is he does not have much. My absolute favorite song by the rock band The Chambers Brothers may become a theme song at Yahoo!, “Time Has Come Today!”

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Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Rich Steeves
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