Wednesday, November 11, 2009

Yahoo! Sets Eyes On India's UID Project

. Wednesday, November 11, 2009

By stockOzone team

On her first visit to the country after taking over as CEO from Jerry Yang, Carol Bartz insists that her company has a lot of steam left in it despite what critics think.

Just 10 months into her new job as the chief executive officer (CEO) of the $6 billion Yahoo!, Carol Bartz believes she can return the online media player to its formal glory, brushing aside critics who think otherwise. In fact, she’s very bullish on emerging markets like India too — especially after meeting Prime Minister Manmohan Singh today.

“It was primarily a courtesy meeting where we also did inquire if Yahoo! could be of any help in the area of cloud (metaphor for the internet) technologies. We are in the business of managing data. We process around 500 billion emails every month, so we wondered if we could assist in the area of managing the databases as India tries to implement the Unique Identity (UID) project,” Bartz told a select media gathering here today.

It’s her first visit to the country after taking over as CEO from Jerry Yang, its co-founder (along with David Filo). Bartz earlier headed Autodesk for 14 years, and also served in prominent positions at Sun Microsystems and 3M Corporation. She took over the company at a time when its image was at its nadir — deals with Microsoft (to buy Yahoo!) and Google having failed.

Bartz has no regrets. “The world was so different then (It was Yang and not Bartz at the helm of affairs then). You have to sit in his (Yang) place to understand why he took that decision (of not selling the company to Microsoft). Regardless, I remain proud that Yahoo! is relevant even after 14 years of its inception,” she says.

Bartz is now planning to increase the number of hires in emerging markets like India. (Yahoo! does not do business in China. It only has investments in some internet companies). Emerging markets for Yahoo! are defined as countries where internet penetration is below 20 per cent and broadband penetration below 10 per cent. “Once a country crosses these limits, they simply take off,” says Bartz.

India is an important market for Yahoo! with around 72 per cent of Indian internet users (an estimated 35-40 million active ones) flocking its homepage (the first page of a company), according to July Comscore data. It has also invested in three online properties in the country till date.

“India is an extremely complex country, and it requires a lot of localisation,” says Bartz, adding: “We have seen an increase of around 40 per cent in users after we started our rebranding campaign”.

Yahoo! recently initiated a $100 million global rebranding plan to restore its beaten image. India is an integral part of the Ogilvy campaign which reads: “The internet is under a new management — YOURS. It’s ‘Y!ou’. The campaign, which will run for a couple of years in different avatars, was launched with power jacket ads in many national dailies. Simultaneously, the “Y!ou” campaign’s 30- and 60-second television commercials are being aired along with the campaigns on the internet and mobile devices. The campaign includes out-of-home advertisements and is being extended to cybercaf├ęs. Even movie star Deepika Padukone, a Yahoo! fan, has been roped in to share her experiences with the media.

“You see, we are not just a search company (read Google). We are much more than that. Only half our revenues come from search, and hence comparisons are not fair,” says Bartz.

But will these exercises help Yahoo! recover lost ground and capture market share? For one, Bartz has a tough task on hand in the form of her major competitor (whom she terms a “search” player) Google. Nearly one out of every 10 minutes a person spends online around the world is spent on a Google site, according to Comscore (July) data.

And in India alone, Google sites accounted for 88.4 per cent of all searches conducted, and had a commanding share of time spent in social networking. It also commanded slightly less than half of the time spent in the blogs category.

Yahoo!, unlike Google and Microsoft, is also not present in the enterprise space where the margins are high. Bartz insists that the enterprise space does not fit in the Yahoo! scheme of things.

Yahoo!, instead, is leveraging its global alliances to make the offerings on its India homepage more attractive. It has tie-ups with social networking sites like Facebook and MySpace to make up for the lacunae of not having one currently (although it may introduce its social networking site “Meme” which is currently being used in countries like Brazil). “We are also very strong in the mobile space, and have an arrangement with around 100 carriers globally. In India, we have tie-ups with around 97 per cent of telcos,” says Bartz.

Bartz will now add another feather in its cap — Microsoft’s search tool “Bing” will power Yahoo! searches subject to regulatory approval. The deal is an international (including India) one.

But there could be a problem. Around 12 years back, it had done a similar deal and powered its search engine with Google. The results are well documented. Google today is a slightly over $22 billion company. Isn’t Bartz wary of history repeating itself with Bing? “Not at all,” says Bartz, concluding: “While the search will be powered by Bing (subject to regulatory approval, the deal should happen in the January-March quarter of 2010), this time we will do things differently. We will control the user experience.”

Disclosure: Author does not own any of the stocks discussed here.

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