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Yahoo have reportedly failed to respond quick enough to rapid changes in the market for display ads, online banner ads and other advertisements wanted by corporate brand managers.
A disappointing couple of quarters have resulted, prompting Wall street to press for radical action, suggesting substantial layoffs and the possible sale of the company. Fortunately for Yahoo, the most recent quarter's results have bought some time for Chief Executive Jerry Yang, and has subsequently prompted a 100-day strategy review of Yahoo's businesses.
Yahoo President Susan Decker told a news conference in South Korea that the leadership that placed Yahoo ahead of competitors in the first decade was not amenable to newer market shifts.
Given this, Yahoo intend to shift their strategy away from being a media company that strives to keep audiences on site. Instead, Yahoo plan to become a technology platform that facilitates users in getting tasks done.
Yahoo plan to reposition themselves ahead of rivals Google and Microsoft by differentiating themselves as an "open" alternative, transforming big properties into 'starting points' that consumers can return to each day. This is starkly different from their previous strategy of employing whatever means possible to keep consumers on the Yahoo site.
Yahoo's track record illustrates that with nearly 500 million monthly visitors and an impressive set of capabilities, the company has high potential to be a strong publisher. To achieve this however, will require the company to create a publishing platform whereby customers are encouraged to return repeatedly to the home page, Yahoo Mail, Websearch and mobile Internet services.
Despite this relatively strong customer base,internet users have shifted away from Yahoo in droves in recent years - opting for constantly evolving social networking sites such as Facebook and MySpace. Additional strategies must therefore be employed by Yahoo immediately in order to tackle both networking sites, as well as Google, Microsoft and AOL.
Yahoo intend to use two additional strategies on top of their 'openness' differentiating point. Yahoo are looking to help advertisers gain greater insight into consumer behaviour in order to target ads more effectively. Further, the company intend to establish partnerships, extending recent deals with companies such as eBay Inc and newspaper publishers, among others.
Furthermore, the online advertising market is becoming increasingly lucrative as it continues to evolve and expand to include new realms such as video and mobile. While all players are chasing the same prize in this market however, success is likely to be dependent on companies ability to plan strategically and place themselves in a state of continuous innovation.