25 June 2007

Yahoo! combines online ad-sales team

In an attempt to help close the gap on Google, Yahoo! Inc has announced it is overhauling the way it sells advertising in the US. The company have announced it will combine the two segments of its ad business - graphical banner ads and Internet search links - under a single sales executive, David Karnstedt. The move reflects the growing demand by customers for advertising campaigns which combine both types of ad, with newer types of video advertisements.

The reorganisation of Yahoo!'s advertising sales means that more than 1,000 ad sales people at Yahoo! will now sell a combination of ad formats, including links next to search results, banner ads and video slots, which Yahoo! hopes will see the company better compete with Google, which controls over 60 per cent of the search-ad market. Yahoo! have endured a sharp fall in profits during the first quarter, and said recently that weak display ad revenues would impact on second quarter results.

While Yahoo! have previously been criticized in some quarters for being slow to react to the increased popularity of social networking sites, Yahoo! is reacting to the shift by consumers towards these sites where users share photos, videos and writing rather than spending as much time on Yahoo!'s own media properties. It's also widely acknowledged that social networking sites provide a prime location for advertisers to buy space due to the vast user bases these websites enjoy.

David Karnstedt, currently senior vice-president of Yahoo!'s Search (formerly Overture) sales business, will lead the unified organization as Head of North American Sales. Speaking about the merger, he said:

"By taking a more holistic approach to advertising sales, Yahoo! will become a more consultative seller, which should make buying complete solutions easier for our customers across Yahoo! and our partner network ... These moves will also enable our world class sales team to more effectively meet the needs of our advertisers - not just today but well into the future."

Gregory Coleman, executive vice president of Yahoo! global sales, added:

"When combined, the two organizations will deliver profoundly better results than when delivered separately ... The future of advertising isn't about choosing between search and display, but about leveraging the breadth of advertising products to more effectively reach your customers with the right message, in the right context, at the right time, and on the right platform.

The move to combine Yahoo!'s two sales operations has been underway since February, with the transition expected to be complete by the end of the year and comes only a week after Chairman and Chief Executive Terry Semel was replaced as CEO by Yahoo! co-founder Jerry Yang.

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