Yahoo! Inc. (NASDAQ:YHOO) interim CEO Ross Levinsohn is looking to the company’s past to secure future prosperity according to a Wall Street Journal report this morning. The CEO, who replaced Scott Thompson in the wake of academic fraud allegations, is concentrating on online display ads to return the firm to its former dominance.
Levinsohn believes that his tenure as CEO of the firm will only be secured if he manages to improve the amount of money it takes in from its core advertising business. Yahoo’s piece of the online advertising sector amounts to around $5 billion each year.
Looking for success in the firm’s past is not necessarily a bad thing for Yahoo!. Online firms often get sidetracked and dragged into multiple sectors, with many remaining unprofitable. Yahoo! is, however, looking further back than its own roots. Part of the re emphasis on advertising will be the concentration of advertising linked to major events.
Major events include the Super Bowl and the Oscars. That particular strategy is more reminiscent of television advertising than it is of online attempts at marketing. That is not a cause for ridicule. Television advertising was king for the almost half a century. It’s fading light in the age of DVRs and online broadcasting does not make it entirely irrelevant.
That having been said, Yahoo investors may worry about the hopes for success in such a strategy. Google Inc (NASDAQ:GOOG) still dominates the online advertising market and Facebook Inc (NASDAQ:FB) is the new kid on the block, offering something new and different to the older services. Yahoo is a long way behind both of those firm’s in resources.
Advertisers like access to targeted ads. Those rely on personal information. Facebook gets this through its social network, Google reads emails, and controls the mobile operating systems of millions of consumers world wide. Yahoo does not have that kind of information gathering power.
Yahoo is sitting in a tight space in the internet landscape. It is being squeezed out on its advertising revenue, that figure dropped four percent year on year in the first quarter, and its efforts to expand elsewhere have not merited any pleased responses from the market or from customers.
Levinsohn, then, is left in a very difficult situation. His job at the company’s helm is in no way secure. In fact Yahoo’s board promised they would go looking for a permanent CEO when they appointed Levinsohn. He need to turn the firm around if he want to be at the head of the company for much longer.
Yahoo has been ailing for some time now, and despite Dan Loeb’s activism at the firm there appears to be little in the way of turning it around. Very few web company’s on their way out of the public’s good books have managed to recover. Yahoo could be the one’s to change that.
Ross Levinsohn has a great deal of trouble ahead of him as he attempts to fix Yahoo!’s problems. Whether renewed concentration on Yahoo’s older business is the key to that change is something time will tell of.