Kara Swisher

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All of Yahoo’s Top Execs Gather Today to Talk Strategery About What Stays and What Goes

All day today, the top 120 execs at Yahoo are meeting at an offsite at the Marriott in San Jose, Calif., the first such gathering of the new world order at the Silicon Valley Internet giant in the wake of 2,000 layoffs last month.

It’ll be the first time that new CEO Scott Thompson starts to more specifically explain his vision of how he’s going to drag Yahoo out of its perpetual turnaround and into a brighter future.

The main message: Focus on where Yahoo is winning and dumping everything else — and actually doing it this time.

(For those just tuning in, previous Yahoo management has talked this talk before and, well, not walked this walk very much at all.)

Thompson thinks he’s the clean-up guy, though. And, since the layoffs, he has been one busy dude, flying to and fro, working on a variety of things.

That includes everything from figuring out how to sell a part of Yahoo’s lucrative Asian assets to working on the company’s fraught search advertising partnership with Microsoft, to chatting with Google about a new one, to planning more patent attacks against Facebook and others, to — perhaps most important of all — deciding what needs to stay and what needs to go in terms of products and properties at the company.

In Yahoo’s recent earnings call, Thompson noted that he would be “consolidating technology platforms and shutting down or transitioning roughly 50 properties that don’t contribute meaningfully to engagement or revenue.”

What precisely he was talking about has been the buzz inside the company since, because Yahoo has collected a lot of stuff over the years that is has shoved into its corporate closet and forgotten about, but that keeps on chugging away with little promise.

Ever heard of Korea Kids? It’s a site in Asia that attracts decent traffic and millions of dollars in revenue, but which many sources said costs much more to operate. Or another site called Sex Tips in the U.K. or Moments on Motherhood on its U.S. Shine women’s site.

There are lots of micro-sites like this all over Yahoo, which have been created over the years for a variety of reasons that seemed sensible at the time. In addition, there is much more — from scads of useless mobile apps to much bigger but troubled projects such as Connected TV and Livestand — all of which suck up staff, resources, attention, ad impressions and more.

It’s like a never-ending episode of “Hoarders,” but grosser in many way for Yahoo shareholders.

So, presumably, if you are not in the top three in any category, that means a spring cleaning all over the company to either toss these properties out or move them to one of Yahoo’s big publishing platforms, such as sports, finance or news.

This is not an easy task, as you might imagine, since each and every property on the potential chopping block has staunch defenders inside the company and ferreting them out and killing them is, as one person inside Yahoo noted, “like hunting gophers in the dark.”

The benefit to doing so? Cost savings, focus on many fewer things that Yahoo does best and a deployment of talent to where it will pay off.

That’s the idea anyway, but it is more complex than that, since simply having massive properties to sell to advertisers is not the game anymore, as both Google and Facebook sell a range of other attributes to advertisers from better engagement to direct sales conversions to social hooks.

Thus, it’s not simply enough to kill properties — Yahoo has to transform the ones it keeps, too, to meet a vastly different consumer mentality.

That is one of the main reasons that Thompson is also stressing new business arenas, most especially commerce, an area he knows well as the former president of eBay’s PayPal unit. Thompson has told his staff that by 2014, one-third of Yahoo’s revenues should come from e-commerce.

Besides hiring away some of his staff from PayPal, sources said he has also been eying payments technology to buy and even leveraging current Yahoo properties to grow the nascent business.

Recently, for example, he has been pushing an effort to get the accidental visitors to Yahoo’s still powerful home page — those that sign in an out of its email, for example — to engage in an e-commerce transaction.

Whether moves like this will work is still an open question, but I guess you have to start cleaning up the mess somewhere.


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— Kara Swisher and Walt Mossberg, in their farewell D post