Hunting Big Sales with Tom Searcy

Yahoo Needs Dealmaking 101

Can the woman who made the Zagat deal for Google make the right deals to save Yahoo? In July Marissa Mayer was named the new CEO for Yahoo Inc., one of the world’s largest consumer Internet brands.

Mayer, 37, said she was “honored and delighted to lead Yahoo, one of the Internet’s premier destinations for more than 700 million users.” The challenge is she is the fifth CEO at Yahoo! in four years and the brand is losing users fast.

Yahoo sales tumbled to $4.98 billion last year, after peaking at $7.21 billion in 2008.

Now is the time for deal making. She needs to win over advertisers and Web surfers who view the company as a has-been that has failed to keep up with Facebook, Twitter and her last employer, Google.

During her 13 years at Google, Mayer held numerous positions, including engineer, designer, product manager, and executive, and launched more than 100 well-known features and products. She was a part of the deal making at Google, which has acquired more than 100 companies in recent years.

However, deal making on a star that is rising is a lot different than on a meteor that is falling. Lots of pieces are in play that make doing deals possible, but not easy. Here’s an unsolicited set of recommendations-

  1. Quick wins – A publicly dispirited staff, questionable board, declining customer base and a jumpy analyst chorus- this group needs some quick wins to regain confidence. The bolder moves can come a little later. Make deals that set a direction, integrate quickly and revitalize the village. People need to know that the new sheriff means business and her business is about making deals.
  2. Feed the base – Make the kinds of deals that will double the advertising impact and customer yield of your current advertisers. These advertisers are working to reach and penetrate their customers. The deals Yahoo! does now need to be focused on getting more spend from the advertisers that they currently have. The speed to revenue is faster with them. Figure out what content connections will give those advertisers more value.
  3. Connect the dots – When there are this many regime changes, there are apt to be lingering initiatives, people who were hired with one vision who have had the vision trumped. People are looking for a clear map to follow. Not rah-rah speeches. Rather, they want a short mantra they can follow. Posted in the kitchen of a great restaurant was the following sign:

“There are only 3 commandments in this restaurant:

  • Great food.
  • Clean place.
  • Friendly people.”

This is just as true in deal making. These deals are not only about investors. They are about the dwindling talent pool that is deciding to jump ship or not. They are about market relevance and impact. The early deals are the weather balloons for other deals in the marketplace and the sellers who will decide to go with Yahoo or take the safer route of a stronger suitor.

When Google paid $151 million to buy Zagat, the restaurant-ratings publisher, people wondered how Mayer would integrate customer-generated restaurant guides and online reviews into its universe of search. Zagat is becoming the cornerstone of a new free service, Google Plus Local, intended to enhance Google’s growing, potentially lucrative local information offerings.

That kind of deal making is what is needed now for Yahoo.

  • Clear purpose of creating value for customers and advertisers.
  • Reasonable speed to execute.
  • A map the market, employees and other deal candidates could follow

The success history is there for Mayer, but the clock is ticking. Godspeed.

Posted by admin in Business Strategy, Forbes.com.



 

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