Mayer vows improvements across the board at Yahoo

In her first earnings call as CEO, Marissa Mayer said Yahoo needs to improve in search, mobile and other key areas

By , IDG News Service |  IT Management

Moreover, its mobile product lineup is too fragmented, with more than 76 different iOS and Android applications. "Our top priority is a focused, coherent mobile strategy," Mayer said. This will involve a significant beefing up of the company's mobile staff.

Regarding search, Mayer said that the revenue Yahoo is getting from its partnership with Microsoft remains below expectations, but Yahoo is still benefitting from existing revenue guarantees.

"While our search share is challenged, we're working closely with Microsoft to define the future of search," she said.

Yahoo will strive to grow its search market share, which is a top priority, by taking advantage of the opportunities the deal affords it to innovate independently on its search result pages, she said.

"There's a clear upside potential here, and it's time to execute against it," she said.

Microsoft and Yahoo signed their 10-year search deal in mid-2009 and got regulatory clearance for it in early 2010. However, for a variety of reasons both technical and operational, the partnership hasn't yielded the expected results.

When the deal was struck, Yahoo and Microsoft believed it would allow them to better compete against Google, which dominates search usage and advertising, but Google has maintained its position.

At a general level, the deal puts Microsoft in charge of Web crawling, indexing and ranking, and of self-serve, pay-per-click ad sales. Yahoo, on the other hand, agreed to pay Microsoft a commission for paid clicks on its own sites and partner sites, and to be in charge of selling premium, guaranteed search ads for both companies.

When the deal was signed, Yahoo estimated that, when fully implemented, the arrangement would boost its annual operating income by about $500 million, provide capital expenditure savings of about $200 million and increase annual operating cash flow by about $275 million.

Mayer also said she's committed to Yahoo's content business -- both to its user-generated sites, such as Yahoo Answers, and to its professional content sites, which feature videos, photos and articles from partner media companies and Yahoo journalists. Improving personalization of content and ads is key for Yahoo, she said.

At a corporate culture level, she said that she has pushed for a new emphasis on transparency and open dialogue with employees, putting in place tools to encourage feedback, systems to remove bureaucracy and new and aligned performance measurements for the company and its employees.

"These new systems are working to improve our execution," she said.

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