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[交流] [原创]Fortune(财富)原版文章

YAHOO'S BRILLIANT SOLUTION
  Julie Roehm has more than $2 billion to spend this year, and the way she's been
spending it worries executives at News Corp., the Washington Post Co., and virtually every other media
company on the planet. As Chrysler's director of marketing communications, Roehm, 34, oversees a
budget that Advertising Age ranks as the sixth-largest pool of ad dollars in the nation. She decides how
many minutes of the carmaker's commercials appear on networks and cable channels nationwide and
how many pages of its ads turn up in magazines like this one and newspapers such as USA Today.
Here's the scary part: Roehm rarely misses a chance to talk about how delighted she is with online
advertising. Last year she spent 10% of the budget online; this year she is allotting closer to 18%; next
year, she says, she will allocate more than 20%. Do the math: In 2006 roughly $400 million of Chrysler's
money that used to go into TV, newspaper, and magazine ads will be spent on the Internet. Says Roehm:
"I hate to sound like such a marketing geek, but we like to fish where the fish are."
No wonder media executives are concerned. One of their headaches is Googlemania--Google effectively
reinvented online advertising with the targeted, classified-like text links that you now see everywhere.
Soaring profits from selling those ads have helped drive Google's stock market capitalization to some $85
billion, making Google the most highly prized media company in the world. But while the old guard is
keeping a watchful eye on Google, the company it really fears--and the one advertisers like Roehm
increasingly love--is Yahoo.
It's been easy for most people to overlook the media and advertising juggernaut that Terry Semel,
Yahoo's CEO, has assembled since he arrived from Hollywood four years ago. That's partly because
Semel makes himself easy to overlook. He's not a showman like Apple's Steve Jobs or a high-tech rock
star like Google's Larry Page or Sergey Brin. In fact, he seems to work hard at being bland. Listen to him
theorize about the online revolution: "The great part about the Internet of all the existing mediums from
before is that it's the first one that is truly global, and its impact is massive." Caffeine, anyone? Semel
doesn't care if he's boring. Like many good negotiators, he knows that the more he says publicly, the less
he's likely to win. Twenty years of doing movie deals as co-CEO of Warner Bros. taught him that. At 62,
Semel's a behind-the-scenes guy, a strategist with a bold master plan: to transform Yahoo into the 21st
century's first media titan. He has surrounded himself not with nerdy brainiacs but with veteran advertising
and media executives adept at building bridges to the powerful businesses that feel the most threatened
by the Internet.
So far, Semel has put together one of the web's hottest winning streaks. When he took over in 2001, the
Sunnyvale, Calif., portal--founded in 1994 by Jerry Yang and David Filo--was a mess. The dot-com
bubble had burst, revenues had fallen by half, and red ink flooded the bottom line. As the founders took a
back seat (today Yang acts as the resident visionary, and Filo works in IT), Semel and his enforcer, COO
Dan Rosenzweig, set about diversifying sales beyond the banner ads Yahoo had lived off. He added
search advertising, online classifieds, and a host of commission-generating businesses such as selling
SBC and Verizon broadband subscriptions. The moves transformed a money loser into a $3-billion-a-year
company that this year will post operating income in excess of $1 billion--a near-Microsoftian operating
margin of some 30%. (By comparison, Google is about the same size, but its margins are almost double.)
Today Yahoo arguably offers the online world's broadest array of information and entertainment for users,
married to the web's most sophisticated collection of offerings for advertisers. Each month more than 430
million people worldwide typically visit one of its myriad sites.
Until recently Semel's grand plan was missing a crucial strand: widespread use of online advertising by
big marketers like Chrysler. Burned or disillusioned by the bubble, they questioned whether online
advertising would ever match the effectiveness of commercials or print ads. Sure, Google's text ads work,
because you throw them in front of users just as they are looking to buy or research something online--
like a smart, aggressive yellow pages. (MSN and Yahoo's search ads work the same way.) But using the
Internet to sell "that Pepsi feeling"--creating and fostering an emotional attachment to a brand--was a
challenge of an entirely different order. Most marketers doubted that it could be done.
But lately decision-makers like Roehm are seeing the Internet in a new light. Their conversion can be
explained in one word: broadband. Roughly a third of U.S. households now have high-speed Internet
connections, which has done two things that advertisers like. It has caused the average time Americans
spend online to grow 50% since 2001, according to Knowledge Networks, a Menlo Park, Calif., research
firm. Surfing the Internet now takes up 15% of the time Americans spend with all media, it says. (That's
conservative, say Forrester Research and many advertisers, who believe the number is double that.)
Second, instead of handcuffing advertisers to the banner ads of the bubble years, broadband has freed
them to fashion creative messages that are more like TV commercials.
In a May report Forrester surveyed 99 major advertisers and 20 ad agencies and found that nearly 85% of
them planned to expand their online ad budgets this year. More significant, it reported a radical shift from
the belief that brand building and the Internet don't mix. Sixty-three percent of those surveyed said that
online advertising was a brand-building tool "equal to or better than" advertising on TV or in print.
Anecdotal evidence supports that. Not a week goes by, it seems, without a big advertiser--P&G, Pepsi,
and Georgia Pacific are recent examples--announcing plans to expand promotion of its products online.
The trend means that a huge volume of brand advertising will flow into the online world--$8 billion to $12
billion a year by 2010, depending on whom you ask, up from less than $5 billion now, about 3.5% of total
U.S. spending on brand advertising.
For Semel and Yahoo, that is the best possible news. Although Google leads the pack in the $5-billion-ayear
market for search-related ads, Yahoo is increasingly competitive there. And in the scrum for online
brand advertising--almost as large a market--Yahoo is poised to grab the biggest share. Its 181 million
active registered users are probably the largest online clientele, which means Yahoo can tell advertisers it
knows the habits of more users than any other portal--or any traditional media company. In contrast,
Google never trained its users to register and has only recently started to ask them to sign up for services
like e-mail or blogging. What's more, measured by page views--the indicator that brand advertisers watch
most--Yahoo users are the most engaged. Yahoo generated nearly twice as many page views --178
million worldwide in May--as its nearest competitor, MSN. (MSN generated 96 million page views in May,
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