Yahoo’s Ross Levinsohn: We’re still No. 1
As Yahoo’s Executive Vice President of the America’s region, Ross Levinsohn’s task is to transform the image of the lumbering Internet giant to one with a passing resemblance to the darling of the 1990s dotcom era when it called the shots. Though, investors ascribed virtually all of Yahoo’s market value to its prized Asian assets – a major stake in China’s hot Alibaba Group and Yahoo Japan – brushing aside Yahoo’s core U.S. business.
A long time Internet player, Levinsohn, who also headed News Corp’s Fox Interactive Media, sat down with me and Kenneth Li during Internet Week in New York and explained how Yahoo needs to fix its image problem, how much of a distraction the tussle in Asia over Alipay was, and how he expects advertising dollars to continue to migrate to Yahoo.
Reuters: What’s working and not working at Yahoo?
Levinsohn: What is clearly working is hundreds of millions of people interact with our properties. Do you know that we have over 700 million people? Do you know that we have the No.1 or No. 2 positions in 19 categories — sports, news, finance, and entertainment news? OMG is our entertainment news gossip site and we are twice the size of TMZ. We’re bigger than ESPN in sports, we’re bigger than the Wall Street Journal, Fox News and Bloomberg combined in finance. The numbers are astounding and, for some odd reason, Yahoo doesn’t get that credit. It’s an easy story for me to tell that you are able to aggregate huge audiences around premium experiences and we should double down on those things.
Reuters: What’s the disconnect?
Levinsohn: Messaging, partly. I think Yahoo has been doing so many things well for so long and frankly got a little trapped in I think ‘oh, what is Yahoo?’ People don’t ask Google ‘what is Google?’, even though they have this
driver of driver-less car division, an operating system and a browser division…
We have a lot of businesses that make a lot of money too. The important thing is to figure out how they all work together. That is another big part of the challenge for me, to take a look at what we do in search and figure out how to optimize that incredible rich product and history, how to integrate what we are doing in mail with our content pieces (and) our search pieces, (and) make sure that (the) product and region are working hand in hand.
I have been faced with much tougher challenges than ‘gee you got hundreds of millions of people visiting your properties and you’ve got advertisers clambering to spend money with you.’ We’re in a leadership position in 19 categories; we’re generating billions of dollars in ad revenue and nearly a billion dollars in profit. There aren’t two or three companies in our space that are doing that.
Reuters: But it is declining.
Levinsohn: I think the mix is changing. This is generational thing. It’s a not a Yahoo thing.
Display is growing for us. If there is going to be a shift of premium brand dollars to digital platforms I think Yahoo is a pretty good position to capture a large percentage of those.
We have the massive audiences, scale, data that enables us to target and a canvas that you can actually tell a story on. You can look across the competitive landscape and say others have portions of those — Facebook has great data, great targeting and great scale but not the canvas. A postage stamp ad isn’t going to let you tell you the kind of story a full rich moving environment. It’s not a zero sum game for anybody. Billions of dollars will flow from traditional to digital and I think Facebook is going to get a lot of them. I think Google is going to get a lot. I think AOL is going to get some. There is plenty of money to go around.
Reuters: What is the biggest thing that is broken?
Levinsohn: I’m not sure that anything is really broken. We have spent a lot of time as a senior management team getting on the same page. … There are always agendas inside companies. The main thing everyone will tell you (is that) we need to be in sync.
Reuters: Is the company in sync now?
Levinsohn: Yes, for sure. I think I was the last senior member of Carol’s team hired. Obviously, it’s an important role because it touches a big part of audience and a big part of the revenue.
In the meantime, the company has been wildly profitable. It’s not growing at the rate of Facebook, Twitter, Groupon or whatever, but it did when it was in its first few years. And I think you have to look at the whole. I have been around long enough (to not) get worked up by what anybody writes or says.
This is a big company that makes a lot of money that is successful and touches hundreds of millions of people around the world. How hard can it be to focus and marshal those forces for good?
Reuters: Is the migration of big brand advertisers to digital happening slower, faster or on par?
Levinsohn: I think it has been too slow, personally. What is going to accelerate more over the next 24 months is video. For brand advertisers, if you can walk up to your client or boss and say I bought an ad I have a great piece of creative and you can see it right here on pre-roll on a piece of premium video, that is easier to point to than it is to say I bought an ad on Yahoo, I bought an on Facebook (or) I bought an ad on search and good luck trying to find it even though it’s there, even if we supply you with the data.
It’s a simple world for creatives: ‘Give me a canvas in order to deliver a message.’ I think the Internet in many ways has become so complex and fragmented it’s really hard to point to that.
Reuters: The market has ascribed no value to Yahoo to anything outside of Asia. You are a veteran of the Internet. You’ve seen this over and over again. Are there Act 2s on the Internet?
Levinsohn: In any business you have to evolve. The greatest thing about Rupert (Murdoch) was watching him reinvent himself but be willing to take risks on new things.
For us, I think we are evolving. You have an evolution of who we are as a company and a revolution internally. The big challenges I have had in my past career don’t exist here. It’s not about Act 2. It’s how do you evolve a leader. When I tell people, hey do you (know) we are still the No. 1 Website in the U.S., they actually think I’m pulling their leg but the facts are the facts.
Reuters: There seems to be a disconnect given Yahoo’s shares are down.
Levinsohn: You can’t manage Wall Street. Wall Street has its own viewpoints on everything. I have always believed, if you manage your business correctly, Wall Street will take care of itself. You can’t get distracted by noise because there is a lot of it out there.
Reuters: How much of a distraction has Asia been?
Levinsohn: For me, not at all. We’ve got a job to do. Asia has been by all accounts an incredible investment made by Yahoo. It has no impact on my day-to-day life or my team’s. Maybe it means I do more reading because I’m curious about it. As a former investor somebody made a great investment – it has multiplied in its value. For us if we do our job right the rest takes care of itself.