New Yahoo CEO Mayer Could Use a Little Madison Avenue Support

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Some media outlets are calling the appointment of Google
executive Marissa Mayer as the new CEO of Yahoo a triumph of technology over
media, with the implication that interim CEO Ross Levinsohn's media background
didn't make him tech savvy enough for the job.

The new question is: Will the marketing community-which has
to this point shied away from spending any kind of major ad dollars on Yahoo-be
enamored enough with the choice?

Mayer is certainly qualified on the tech side. As The New York Times mentioned, she
"has been responsible for the look and feel of Google's most popular
products," including its homepage, Gmail, Google News and Google Images.

But it remains to be seen what the impact of passing over
Levinsohn will have on Yahoo's ability down the road to develop both the
necessary content and relationships with marketers that will lead to revenue
growth through advertising.

Levinsohn was more the media/advertising guy. He spent over
five years as president of Fox Sports Interactive Media where he had a direct
pipeline to News Corp. chairman Rupert Murdoch. But his career has been
diverse. He cofounded Fuse Capital and spent four years there before joining
Yahoo as executive VP of the Americas, and then as VP and head of global media.
Early on in his career, he worked at Saatchi & Saatchi, at CBS Sportsline
and at search engine AltaVista.

One of Levinsohn's first moves after being elevated to
interim CEO of Yahoo in May was to hire Michael Barrett away from Google to be
Yahoo's executive VP and chief revenue officer and to, among other things,
oversee worldwide ad revenue. Barrett is a former colleague of Levinsohn's at
Fox; as executive VP and CRO of Fox Interactive Media, he oversaw worldwide
revenue for Internet properties including FoxSports.com. Barrett also served as
executive VP of sales and partnerships at AOL Media Networks.

Clearly, in Barrett, Levinsohn brought in an executive
experienced at coming up with ways to leverage content and bring more ad
revenue into the company.

Some on Wall Street expected the job to go to Levinsohn and
some praised his appointment of Barrett as a positive step in a potential
turnaround of Yahoo's ad fortunes. But now both Levinsohn's and Barrett's
future at Yahoo could be murky.

Prior to Mayer's appointment, Brian Wieser, senior
analyst at independent equity research firm Pivotal Research Group, said,
"We believe the Yahoo board of directors will soon announce that Ross
Levinsohn will formally become its new permanent CEO. We would view such news
favorably, as it involves the installation of an individual with most of what
the company needs for the role."

And after Mayer was named Yahoo CEO Monday? Wieser again
weighed in, calling it a "high beta" choice, stopping short of
calling it an "alpha" one.

"While we believe that Ms. Mayer is very well regarded
and could ultimately be highly successful, she seemingly does not have
experience in several areas that are critical to Yahoo's turnaround,
introducing some incremental risks around the company's future prospects,"
he said.

Wieser himself is a "media" or "ad" guy,
having spent eight years at Magna, the research and buying arm of Mediabrands,
which oversees media agencies Initiative and Universal McCann. When he departed
in 2011, Wieser was senior VP, director of global forecasting, making his a
worthy finger on the pulse of the worldwide advertising business, with
information on what marketers need and how they feel about spending their ad
dollars.

Toward that end, Wieser said Mayer not only has very
little experience in "relationship-based ad sales," but he also
cited Silicon Valley's traditional coolness to the ad
community, and wonders how Mayer will deal with that, given her background
in technology.

"[Yahoo] is critically dependent upon monetizing its
audience through relationship-based advertising sales to large brands,
generally via agencies," Wieser said. "We will be interested to
understand how Mayer will approach the area, and the degree to which she will
seek to deepen Yahoo's focus in this area. Our understanding is that this is
not an area in which Mayer has any experience, and so we will be further
interested to observe to what degree Mayer is distant from the disdain that is
commonly found in Silicon Valley towards Madison Avenue."

Wieser said Yahoo needs product on its site that
extends the time users spend there, and needs the right people in place to
accomplish that. And he added that right now, Yahoo is not stirring up much
excitement for marketers to advertise with it.

"In our interactions with marketers and agency
professionals, we have found a high degree of indifference towards Yahoo,"
Wieser said. "As a media brand, it fails to excite its client base,
and arguably loses share of wallet as a result. The company could once again
become a strong brand if its CEO can establish [him or herself] as a visionary
or if product offerings were viewed as profound."

Wieser said that while it was "not necessarily
essential" that Levinsohn "had to become CEO, a failure to retain him
and the other new hires would potentially add to disruption to a company that
does not need any more."

But he did say Mayer has a depth of past experience in
product improvement and that she "has tremendous potential to create excitement
around the Yahoo brand."

Other areas where Mayer will be watched by
Madison Avenue are in regard to her ad tech choices and her position on
Internet privacy. "We will be curious to observe Mayer's biases with
regards to key strategic areas, such as Yahoo's ad technology choices and its
positioning if do-not-track browsers or government regulations serve to limit
the use of third party data in the world of online advertising," Wieser
said.

The Silicon Valley folks may be applauding Mayer's appointment, and clearly a CEO wears many hats, but how well she is able to meet the needs of marketers and pull in ad revenue may very well determine her long-term fate, and the fate of Yahoo against its many online competitors.

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