Don’t put a stopwatch on Carol Bartz’s quest to turn around Yahoo.
In a wide-ranging conversation Tuesday, the CEO of 13 months noted that it took Steve Jobs four years after his return to Apple to come up with the iPod. “And now everybody likes to think, what a magician,” Bartz said.
Arriving in January last year as Yahoo struggled with declining revenue and profit, Bartz immediately oversaw the layoff of 800 employees and began selling off pieces of the company that she said were outside Yahoo’s core focus. Tuesday, Bartz said Yahoo was swinging back into a growth mode, seeing greatly increased interest and activity from advertisers, expecting to add employees and even making some limited acquisitions in 2010.
Still, sitting down to lunch with a group of financial journalists to mark Yahoo’s 15th anniversary, Bartz acknowledged problems. She said Yahoo had lost some of its Silicon Valley mojo as a cutting-edge engineering company, that the recent “It’s You” branding campaign hadn’t worked well in the U.S. and that the company had allowed itself to be “pigeonholed” as an Internet search company rather than a content provider.
Following the disastrous mishandling of a takeover bid from Microsoft in 2008 that triggered a 60 percent decline in Yahoo’s stock price, a shareholder revolt and co-founder Jerry Yang stepping down as CEO, Bartz has been using the word “transformation” as she moves into her second full year at the helm.
Earlier this week, speaking at an advertising conference in San Francisco, Bartz was all about being the mainstream corporate CEO. She sounded a long way from the disruptive and irreverent spirit of the “Yet Another Hierarchical Officious Oracle” that Yahoo co-founders Yang and David Filo launched in a temporary trailer on the Stanford campus in 1994.
Instead, using marketing jargon, she touted Yahoo’s deal to identify American mothers online and serve them advertising from the world’s largest retailer, Wal-Mart. As she talked to advertisers Monday at a San Francisco conference and reporters Tuesday at Yahoo’s Sunnyvale headquarters, Bartz said Yahoo had signed Wal-Mart Stores to its largest ever online advertising deal.
“Yahoo knows where the moms are,” Bartz said Monday in San Francisco, telling the advertising executives that Wal-Mart’s message had reached 70 percent of America’s moms who are online. “That just blew Wal-Mart away. I would challenge the competition to be able to do that. We’re helping a traditional offline retailer think of transformation in their ad marketing.”
Yahoo is pursuing a similar joint marketing venture with consumer products giant Procter & Gamble, mashing up video, social networking and its mass of personal data about users’ online habits into a blending of advertising and entertainment, a strategy that Yahoo is touting to potential advertisers with the slogan “Science, Art and Scale.”
“Last year was about focus,” Bartz said, referring to the company shedding some businesses, such as Yahoo’s recent $225 million sale of its HotJobs employment site to Monster.com, areas of the business Bartz called “space debris” distracting from Yahoo’s focus on content linked to advertising. “This year we’re focused on what acquisitions we should do.” She said the acquisitions would be small or mid-size companies, most likely in the area of audience — such as allowing Yahoo to do a better job of targeting moms — along with analytical tools to help the company understand user behavior, and expansions into other countries.
Bartz said Yahoo’s newly approved search deal with Microsoft would stabilize Yahoo’s declining search share, although she declined to give numbers. But unlike Microsoft CEO Steve Ballmer, who said Tuesday in a talk in Santa Clara that Microsoft was raising complaints with antitrust regulators in Europe and the United States about Google’s dominance, Bartz declined to comment about Google’s search practices.
She did, however, question the sincerity of Google’s threat on Jan. 12 to shutter its business in China unless the Chinese government allowed Google to run an uncensored search engine.
“I actually thought that if they were that heartfelt they should do it, and they would have done it, but it looks to me like it was more of a statement than an action,” Bartz said. “All I’m saying is that if they wanted to pull out, they should have pulled out. Nobody said please, please stay.”
Contact Mike Swift at 408-271-3648. Follow him at Twitter.com/swiftstories.
CAROL BARTZ ON …
The time it took Steve Jobs to turn around Apple:
“All I’m saying is that he returned to a company that he knew really well. And now everybody likes to think, what a magician. He knew the DNA better than anybody and it took him four years. So, guys, I’m not trying to be obnoxious here. I know people want to see magical things happen. . . . We have to get better, we have to grow revenues. By the way, I also came in in, the, whatever, great depression. I’m not trying to make excuses. I’m proud of what we’ve done here.”
On whether she’s OK with Facebook recently passing Yahoo as the second most visited Web site:
“No, it’s not OK . . . but the fight to get another user is too expensive. It’s the fight to get advertising dollars around relevant users that I want to win. So, listen, I need to sign up people in India, people in Indonesia, people in Brazil, people in Mexico, but the additional dollar of trying to get the next unique visitor in the U.S., I can put that money elsewhere.”
On the valley’s perception that Yahoo is no longer a cutting-edge engineering company:
“We did lose that. . . . The comparison we get a lot, for instance, is Google. They’ve got a $4 billion engineering budget, and we’ve got a $1 billion engineering budget. We’re not going to play with phones and broadband; we’ve got to play in our own space.”
On her vision for using data about user behavior to make content and advertising more interesting:
“I want the page to know what kind of content I want, and I want the ads to know me, so I have some interest in the ads. . . . I want to get it down to what I call the Internet of one, which is, I want you to know me.”
