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Shareholders Give Yahoo a Vote of Confidence
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It is a mark of the rapidly changing nature of the Internet industry that a dominant company just eight years ago now seems anchored in another era.
Yahoo rose to prominence as a destination on the Web. Users would come to Yahoo sites -- and then stay. There were games, advice columns, financial information, news, all available under the Yahoo banner.
But as users have become more accustomed to browsing all over the Web and using search engines such as Google, Yahoo has lost its dominance. Social networking sites have made inroads on it, too.
During the shareholder meeting, Yang and President Sue Decker laid out a two-pronged strategy to recast the Web property.
First, for consumers, the company is seeking to make Yahoo sites more open to the rest of the Web and more social.
For example, the Yahoo home page is trying to present users with links to the "best of the Web," Decker said, rather than simply encouraging them to stay on Yahoo sites as before.
The company is also trying to capitalize on the enthusiasm for social networking. Company officials said there are 20 billion latent social connections among Yahoo users now, from e-mail lists and other sources. The company will seek to allow users to better know what their friends are doing on the Web.
The second part of the strategy revolves around display advertising, which accounts for the vast majority of Yahoo's revenue, and which is expected to continue to grow rapidly.
Advertisers have long complained about the fragmented nature of the Web audience: to reach it, an advertiser often has to deal with many Web sites instead of centralized providers.
"Display advertising is unbelievably complicated," Decker said.
A new Yahoo advertising system, still being tested, would allow advertisers to buy simply from Yahoo and from partner sites across the Web.
Despite such plans, many analysts remain wary. The company's stock has lost more than half its value since trading at $43 in January 2006.
"At the root of it, it seems as if Yahoo's troubles are tied to shifting consumer behavior," said Derek Brown, an analyst at Cantor Fitzgerald. "I don't have a magic bullet, nor, do I think, do they."
