Marissa Mayer: Yahoo’s value lies in retaining your information

Avatar By Aaron Sims | 7 years ago

Yahoo, the former search titan turned beleaguered media amalgamation, has seen it’s stock climb steadily since late 2012, but not because of technological breakthroughs or revolutionary product offerings. Instead, the company regained its value the old-fashioned way: By compiling information.

“Yahoo has some of the best data on the internet, what consumers like to read, what they like to do,” said Yahoo CEO Marissa Mayer at a Goldman Sachs technology conference in San Francisco on Tuesday.

Despite falling far behind Google in the search market, Mayer also indicated that Yahoo is far from giving up on the service that made them famous. Analysts believed Yahoo’s focus was changing from search to content, especially on the heels of hiring TV personality Katie Couric and the former New York Times tech writer David Pogue. That’s apparently only part of the plan, according to Mayer.

“We’re long on search,” said Meyer during a Q&A session with a Goldman analyst. “Search is curiosity, and that will never be done.”

“Contextual search,” or search results based on a user’s location and/or recent activity, will be an area of focus now that Yahoo’s acquired contextual info provider Aviate. “This is about taking those scenarios and making app search and general search easier,” Mayer said. “There’s a lot we can offer in the search area beyond core search.”

Much of that search growth appears to be focused on Asia, where Yahoo is heavily invested and will continue to invest. Yahoo has had financial successes in China’s Alibaba and Yahoo Japan, and the constantly evolving landscape in Asia means there’s more room for finding the “right” opportunities, Mayer said.

Other search growth opportunities include a recent partnership with online review site Yelp, which, when combined with contextual search technologies, could create a more useful, seamless search experience for the user.

Mayer hopes Yahoo’s wealth of consumer behavioral information will continue to pay off in the form of advertisement revenue, which she indicated will continue to be the company’s main source of income as opposed to paywalls or subscriptions. In order to grow under that model, Yahoo will have to continue to work with advertisers to use their data to develop targeted ads for consumers.

“There’s been some move toward digital, but not enough,” Mayer said, as she noted that 80% of all advertising dollars are still spent on television campaigns.

Yahoo currently plans to retain its large human-powered ad sales force, which raises eyebrows in light of the rising popularity of automated ad buying technology. Yahoo believes their ability to create custom, prearranged ad placement deals is simply too valuable.

“It’s hard to imagine that kind of custom placement would ever be sold by machines,” Mayer said.’

The Wall Street Journal reports that under an agreement signed in 2012, Microsoft gets 12% of the revenue Yahoo generates from search ads appearing next to search results. Yahoo is unlikely to get out of its contract with Microsoft until at least 2015, the midway point of the 10 year contract at which time either party can opt out.