Yahoo Committing £60m To Kick-Start Image

Yahoo CEO Carol Bartz announced a global branding campaign for the company, in a high-profile Sept. presentation the Nasdaq MarketSite in Times Square, New York.

The announcement is part of Yahoo’s larger campaign to show its viability and competitiveness in the wake of a recent partnership deal with Microsoft and months of market-share battering by Google.

Yahoo’s new tagline is, “It’s You!” The “Y” in that slogan incorporates Yahoo’s exclamation-point logo. The campaign will start on 28 Sept in the United States, before rolling out to more countries in the coming weeks. Yahoo plans on committing $100 million (£61m) to the campaign, which will last 15 months.

As part of the “You” campaign, Yahoo has also been emphasizing key changes to its core products, including the ability to consolidate favorite content and sites onto a single user page, streamlined photo editing and sharing, mobile video capability, and a new mobile homepage with a variety of apps. Yahoo is also emphasizing changes to its front-end search experience, despite the company’s search being powered by Microsoft’s Bing by 2010.

Bartz indicated that the cutting and streamlining begun under her tenure would continue, even in the midst of the new campaign.

“The focus of the company is really to engage and personalize Yahoo for the users, and to do that, we need to be ready to put our signature on the bottom of every page on the Internet that has yahoo on it,” Bartz said. “Things that might have been a good idea several years ago… we’re really revisiting everything. Where it makes sense, we will sell, and where it makes sense, we will shut down.”

Bartz also suggested that this new campaign could ultimately attract more advertisers and improve the company’s bottom line.

“Advertisers follow consumers, and if you want to talk in sort of parlance of advertising, you always need to build circulation. By having more and more engaged users around the world, we’re building circulation,” Bartz said. “By doing this very personalized approach, get really good micro-insights for our advertisers. Consumers want good advertising, that’s meaningful to them, and advertisers want to deliver that.”

Video will play a big role in Yahoo’s overall strategy for the campaign, Bartz added.

“Video is so crucial to our users and our advertisers, because video is an interesting and emotional way to tell a story, to entertain, to inform, to share. There’s a big emphasis inside Yahoo on our video platform,” Bartz said. “Big cornerstone of our strategy is video.”

Under the terms of Yahoo’s partnership with Microsoft, originally announced on 29 June, Bing will power search on Yahoo’s sites while Yahoo handles worldwide sales duties for both companies’ search advertisers. In theory, the alliance allows both companies to more effectively compete against Google.

In the wake of the deal, however, Yahoo has gone out of its way to insist that it remains a viable competitor to not only Google, but also its ostensible partner. “The agreement calls for Microsoft to supply us with algorithmic search results, images and video,” Prabhakar Raghavan, senior vice president of Yahoo’s Labs and Search Strategy, insisted during an Aug. 24 press conference. “We will be free to innovate on top of that layer.”

While Yahoo sees itself as no longer fighting a “megawatt war” for search, deploying its own engine to sort through billions of Web pages in order to gather results, the company is positioning itself to fight for its share of user applications including e-mail.

To that end, Yahoo announced during that press conference that it would tweak Yahoo Search, Yahoo Messenger and Yahoo Mail. The new Yahoo search page integrates results from a variety of sites, including YouTube and Yelp; its results for people searches will incorporate data from social-networking sites such as Facebook, LinkedIn, Twitter and FriendFeed.

Once incorporated within Yahoo’s sites, Bing will hold close to 30 percent of the U.S. search-engine market, or roughly half of Google’s share. Microsoft has suggested that, once certain engineering issues associated with the deal are overcome, the new influx of data from Yahoo sites will allow the company to refine and improve its search results and ad delivery.

Microsoft plans to pay Yahoo some $150 million over the first three years of the 10-year agreement, and hire more than 400 Yahoo employees.

In June, Bartz suggested that a search partnership between her company and Microsoft would save Yahoo somewhere between $500 million and $700 million, primarily in staff reductions and data center cutbacks. However, she also suggested – in what may have been a deliberate attempt to throw off any public scent of an imminent deal – that Microsoft was “not going to get scale through Bing” and that interest in the search engine would be “temporary.”

Despite the comprehensive nature of the deal, Yahoo has a potential backdoor escape in a contract provision stating that, if Google’s RPS (revenue-per-search) query rate is higher than the combined RPS rates for both Microsoft and Yahoo, then it can terminate into the agreement.