Why Yahoo is struggling

Steve Henn Sep 7, 2011

Why Yahoo is struggling

Steve Henn Sep 7, 2011

Kai Ryssdal: Yahoo’s now-former CEO Carol Bartz had a rough afternoon yesterday. She was fired over the phone. In no small part because Yahoo just ain’t what it used to be — that’s a problem that pre-dates Bartz, by the way.

The company helped millions of people find their way around the Internet for the first time. It was once the undisputed leader in online advertising — how long ago that seems. And it created an enormous online audience. The catch is, it still has that audience but can’t figure out how to make money off of them.

Marketplace’s Steve Henn has more on what it might take to turn Yahoo around.

Steve Henn: Yahoo makes its money selling online ads. This industry is booming and Yahoo’s reach is enormous: 600 million unique visitors a month.

So why are Yahoo’s revenues flat and its market share shrinking?

David Hallerman: More and more ad dollars are going to more targeted buys.

David Hallerman is at eMarketer.

Hallerman: Whether its on Facebook, where they have information about people’s friends and contacts.

Or on Google, where search data is used to place ads all over the web.

Shar Van Boskirk at Forrester Research says Yahoo has other problems too.

Shar Van Boskirk: They lack focus. They are an email business, they are a database marketing business, they are an ad agency, they are a marketing platform, they are a search engine. And all of those things are a little bit too scattered for an advertiser, or for a user, to clearly understand when and why to go to Yahoo.

Van Boskirk believes those individual pieces might be worth more on their own.

Van Boskirk: Ultimately, the future here might be for an investment bank to buy Yahoo and spin off the parts.

And rumors are rampant today that Yahoo’s board may finally put the company up for sale.

In Silicon Valley, I’m Steve Henn for Marketplace.

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