Yahoo takes to airwaves to defend its turf |

Yahoo takes to airwaves to defend its turf

Michael Liedtke

SAN FRANCISCO (AP) – As its rivals create a bigger buzz on the Internet, Yahoo Inc. is hitting television and radio airwaves to remind people that its Web site remains on the cutting edge of technology and culture.

The advertising blitz, scheduled to begin Thursday, marks the Sunnyvale-based company’s biggest marketing push in two years.

Besides buying TV and radio time, the world’s most popular Web site also will be spreading its messages in movie theaters across the United States.

As an added promotional gift, Yahoo will offer coupons for a free cup of coffee at Dunkin’ Donuts to anyone who sets as their home page this Friday.

Yahoo executives bill the multimillion dollar campaign as a celebration of several significant improvements to its Web site, including a makeover of the home page, an e-mail upgrade and a service that enables users to tap into their collective knowledge to find answers to tough questions.

“This is a great time for us to talk to our customers and encourage them to visit the new,” said Allen Olivo, Yahoo’s vice president of global brand marketing. “It’s an invitation to come back to those who haven’t been using us in a while as well as to those who haven’t been using us as frequently as they once did.”

But the push also reflects the mounting pressure on Yahoo as it struggles to catch up to Google Inc. in the lucrative online search market. Yahoo is also battling perceptions that startups such as have become hipper places to hang out.

Meanwhile, old standbys like Microsoft Corp. and Time Warner Inc.’s AOL are spending heavily to lure traffic away from Yahoo.

“Yahoo is probably feeling some erosion of its brand,” said Brad Scott, director of digital branding for San Francisco consulting firm Landor Associates. “They probably want to build some awareness again.”

Yahoo claims 412 million users. Last month it attracted nearly 107 million unique U.S. visitors, more than any other online destination, according to Nielsen/NetRatings.

But Yahoo’s search engine lags Google’s, both for processing requests and distributing ads that will produce revenue-generating clicks – problems that have depressed the company’s stock. Yahoo shares ended last week at $29.32, marking a 25 percent decline since the end of last year.

Through July, Google held a 44 percent share of the U.S. search market compared to 29 percent for Yahoo, according to comScore Media Metrix. At the same time in the previous year, Google’s lead on Yahoo was only six percentage points.

Mountain View-based Google is far richer, with a market value of $127 billion and about $10 billion in cash. Yahoo has a market value of $39 billion and about $2.7 billion in cash.

To make things worse, Google has become synonymous with looking things up on the Internet without having to spend on expensive TV and radio ads.

“Instead of worrying about branding, Google is able to spend time and money on building better algorithms to help people find information and data,” said Regis McKenna, who helped steer the marketing campaigns of high-tech Apple Computer Inc. and Intel Corp.

Google spends heavily to promote its search engine, but it generally eschews traditional advertising channels.

The Mountain View-based company announced in May that it would bundle some of its software on Dell Inc.’s personal computers so Google wouldn’t have to rely on users downloading its software from the Internet.

Financial terms were not disclosed, but analysts estimated that Google could pay up to $1 billion for a three-year deal.

“Google is a very media savvy company,” Scott said. “They realize a prime spot on a computer or a Web site can be just as critical as a 30-second spot on prime-time television.”

While Google has been winning the search showdown, News Corp.’s youthful has been threatening to dethrone Yahoo as the most viewed site.

In August, Web surfers pulled up 32.7 billion Yahoo pages, up from 31.5 billion pages a year ago, Nielsen/NetRatings said. Meanwhile, the viewership at MySpace nearly tripled to 27.3 billion pages.

Yahoo’s decision to turn to television and radio to protect and expand its Internet turf seems ironic.

“I can’t say if it’s good or bad, but I do know it’s not the wave of the future,” McKenna said.

Yahoo’s Olivo defended the strategy, saying: “We live in a multimedia world and we want to be wherever are customers are.”

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