Yahoo names Carol Bartz as CEO

admin 01.14.2009

As speculated by Battelle (among others) Yahoo’s named Carol Bartz CEO.

The choice is in-line with yahoo’s history of focusing on product, and I don’t mean that complimentarily.   While everyone in Search Engine Marketing wishes Yahoo well and wants them to be a credible threat, I don’t see this appointment making that happen.

Let’s look at a little history.  Overture – Yahoo’s crown jewel, a fantastic game-changing technology that created the SEM industry – wasn’t developed in-house.  It was purchased.  And when it was purchased, Yahoo’s technicians made a strange decision.

Yahoo decided to map derivations of a word to a common root.  So let’s say you’re an online shoe store.  You might want to show up for “shoes” and “shoe.”  To halve the space in their database, Yahoo treats the two words as one, showing one keyterm (and its related ad) for both searches.  That’s fine for Yahoo short term – it cuts their database in half.

But this was a disastrous long-term decision, engendering a worse customer experience, leading both users and advertisers to move elsewhere.  Why?  Because it’s a fact that the keyterms two will perform differently – one of those terms will have a better ROI than the other.  Let’s say “shoes” has a 300% ROI for me, and “shoe” has a 100% ROI.  All things being equal, I’d rather spend my money on the 300% ROI keyterm.  But Yahoo forbids me from making the choice.  They say, in effect, “too bad.  Because was want to keep our database tidy, we’re considering the two words to be identical, regardless of what you say.  Enjoy your (combined) 200% ROI.”  So the advertiser got a bad ROI, the user didn’t find what they were looking for, and viola, enter Google!

But it gets worse.  They get to the point where “blue shoes,” “extra-wide shoes,” “buy shoes” and more might all trigger an ad for “shoe.”  I don’t want to beat a dead horse, but imagine the frustration when you go to all the effort to up an “extra-wide shoe” ad and webpage, and Yahoo tells you “too bad!  We’ve decided that what you and the user really wanted was “shoe,” not an extra-wide shoe.”  I could go on and on.  Incredibly, Panama did not fix this. 

This is in direct contradiction to Google (let’s make a better search so our users will come back) and even Ask.com (we think we can improve on Google’s search, so we’re going to array difference media choices across a new layout.)  Instead, Yahoo said “how can we make it easier on ourselves?”