As Icahn grumbles, Yahoo sets ad strategy

06 Jun 2008

(Associated Press via NewsEdge) In the latest effort to placate restless investors, Yahoo president Sue Decker laid out plans for building the company's online advertising operations, and Yahoo announced a slew of new partnerships.

The push is aimed at proving either that the struggling internet pioneer can go it alone or that Yahoo is worth more than the last offer from spurned suitor Microsoft.

The two companies are still in 'ongoing, engaged' conversations about various kinds of partnerships, Decker said.

Shareholders led by billionaire Carl Icahn have been calling for Yahoo co-founder and CEO Jerry Yang's head. Icahn and other investors say he improperly thwarted Microsoft's advances.

Decker told a digital advertising conference in New York Wednesday that she and her colleagues were 'completely rewiring' Yahoo in order to better coordinate sales efforts across various parts of the online company's operations, which had operated as silos. She noted Yahoo has millions of potentially lucrative relationships with email users and a separate group of people who use the photo-sharing service Flickr.

'We have the largest latent social network in the world,' Decker said.

Sites that exist explicitly to serve as networks, such as fast-growing and News Corp.'s MySpace, have become investor darlings for their ability to deliver marketing messages in a casual online social environment.

Yahoo has fallen badly behind Google in search advertising effectiveness, but Decker said the company has been steadily closing the gap.
Decker said Yahoo intends build its already-considerable search abilities in order to offer combined packages of advertising to marketers.

'Our ambition is to be a principal in both search and display' advertising, Decker said.

Meanwhile, in a letter to Yahoo on Wednesday, Icahn said he would press for Yahoo's board to be removed if it didn't scrap a severance plan it adopted after Microsoft began its takeover attempt January 31. The plan could have raised Microsoft's costs in taking over Yahoo by as much as $2 billion.

© 2008 The Associated Press

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