CEO Scott Thompson outlined his vision today for how Yahoo can start growing again. His big theme: Focus, focus, focus.
“Yahoo has been doing way too much for too long and was only doing a few things really well,” Thompson said.
He was speaking on the earnings conference call covering his first full quarter as CEO — revenue was flat while earnings went up. Thompson has already been making some big changes, with layoffs and a major reorganization, but he said he isn’t satisfied with the results so far.
Even the company’s lesser-known properties may be getting more engagement than most startups or mid-size companies, but Thompson said, “That doesn’t mean we should continue to do everything we currently do.” He said he will be shutting down or “transitioning” at least 50 Yahoo properties (he didn’t say which ones, but we’ve heard that a number of Yahoo entertainment-focused properties were hit hard by the layoffs), so that it can focus on core products like Mail, Finance, and Sports.
Other strategies include using all the data that Yahoo has collected to deliver a more personalized experience for users, doing more to show advertisers their return on investment, and accelerating the process of developing new features and products.
“Yahoo has built processes that were originally intended to help us scale but they’ve become way too complex and stifled innovation,” Thompson said.
Shutting down properties may lead to a “modest” decrease in revenue, but the company’s margins will improve, he added. (Earlier in the call, CFO Tim Morse said the company is aiming for margins of 20 percent, excluding traffic acquisition costs.) He also said that Yahoo won’t rule out developing new products in the future, but first it needs to “earn the right to pursue new growth opportunities” by improving core experiences.
“I’m convinced we don’t need to reinvent who we are,” Thompson — instead, Yahoo just needs to reinvent the user experience.
Scott Thompson was formerly CEO of Yahoo!. Before taking up this role he served as president of PayPal with overall responsibility for growing the global leader in online payments. Succeeding Rajiv Dutta in 2008, Scott previously served as PayPal’s senior vice president and chief technology officer where he oversaw information technology, product development, and architecture for PayPal. Prior to PayPal, Scott worked for Inovant, a subsidiary of Visa formed to oversee global technology for the organization. As executive vice president...
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