Advice for Terry Semel

Making sure he listens to Kiles? Not Likely! Yahoo!'s Terry Semel. (Getty Images)

Why is Yahoo! flagging so badly, losing traction in ad revenues during a legitimate advertising boom?

Just today they announced a reorg in the face of falling stock price and (apparently) a completely blown opportunity with their Overture assets. CFO Susan Decker is now in charge of online ad sales in addition to marshalling the books.

Honestly, things do not look good. Yahoo!, just 2 years ago everyone's darling after a few years of buckling down and becoming an internet media engine while parlaying an IP lawsuit with Google into billions, is now viewed as a Company that simply missed it, heading toward the door with AOL.

What happened and what can they do about it?

What happened can and does happen to everyone- they did not see a tsunami- the social networking wave was huge and they missed it, losing out completely as portal to the MySpace generation. YHOO had neither the tools to manage content (Google was already the search engine of choice) or the focus on self aggrandizement the new "me" generation looks for with MySpace and YouTube or the autommated ad system to capitalize. In short- they missed an opportunity because they were not prepared!

Now it's time to watch their reaction and see what they do about it. They are under immense pressure to respond with a social solution of their own, take on MySpace...My take is that they have already missed that ship and that they should stay the course.

If they cannot compete with Google in technology and have lost the social space to MySpace, what do they do to compete?

Yhoo must make a play now to become a significant media company, internet rights holder and manager of important content. They should take a hard look at the CEO and ask what does this guy know anything about?

Bing! You got it! Terry Semel is a studio genius! He knows how to build a studio from the financial perspective and attract the very best to his world. He has bright guys working with him. Now they need a real internet content guy. Not Lloyd Braun, but a real Valley guy that knows media and technology; someone who can create a system for churning out compelling content for the internet environment and start pouring it into the Yahoo! distribution monster. Roger MacNamee or someone like him (Geoff Yang?)

Forget about Hollywood- focus is still the Movies and TV and will always be. Yahoo needs internet content and that happens in their backyard. They need to be the home of massively multi-player games and interactive images and video. They should open the doors and create opportunity for the publishing community to create and make $. Make tools for creating, engineers for refining, systems for hosting, offer customers for distribution and ad systems for $. Make it generally available to anyone for free in exchange for content rights of well developed content. But insist on quality!

Find the developers on MySpace, YouTube and Facebook and bring them to Yahoo! Make their lives so easy that they can succeed if they just create content! Yhoo does the rest! Invest $10B in internet content over the next 5 yrs! Not in purchasing rights but in delivering the systems required to create...

I ask you Terry Semel, is that much different than what you made happen so successfuly at Warner? Do what you know how to do and do it well!

Go out and do something wonderful! Now is the time!