April 18, 2012, 12:51 PM

Yahoo plans to focus more on online commerce

A new commerce unit could help advertisers better reach online consumers.

Lead Photo

Scott Thompson

Yahoo Inc. is moving toward a stronger presence as an online marketplace that will use its extensive data on online consumers to help retailers and other advertisers present products likely to appeal to the millions of consumers who visit Yahoo sites each day, Yahoo CEO Scott Thompson said yesterday.

As part of a major revamp of the struggling Internet giant, Yahoo aims to build a better online shopping experience in core areas of consumer products, automotive and travel, and also to share the data it has on consumer interests in these areas with advertisers. “Our goal is to use the data, the traffic, the advertisers and the next generation of experiences [so] that we can build up those properties to more seamlessly connect what users are looking for with what advertisers are trying to sell to them,” Thompson said in a first quarter earnings call with stock analysts. It was Thompson’s first quarterly presentation to analysts since Yahoo hired him away from the PayPal unit of eBay Inc., where he had been president.

Yahoo announced earlier this week that its new commerce business unit will be headed by Sam Shrauger, a former PayPal vice president for global product and designand Mollie Spilman, former head of Yahoo Americas marketing, who have been named senior vice presidents reporting to Thompson.

Yahoo also said it will consolidate its technology platforms while shutting down properties that don’t contribute much to revenue. As part of its technology improvements, Thompson said Yahoo is moving more software engineers to its commerce business unit, and that it will work on providing “data and insight and analytics almost real time” to help advertisers more effectively reach consumers with the right product offerings.

Thompson declined in the call yesterday to provide many more details on how Yahoo will build up and operate the commerce business unit, nor did he mention how or if the unit would affect the operations of Yahoo Merchant Solutions, which provides e-commerce technology and services to merchants that operate their own retail web sites. That e-commerce platform was formerly called Yahoo Store, a name still widely used in the e-commerce technology market.

Thompson said that the commerce business unit will be making more information available about its plans over the next few months. A Yahoo spokeswoman for Yahoo Small Business, the unit that contains Yahoo Merchant Solutions, said that Merchant Solutions will continue with plans to build out its technology offerings. “We are excited to continue development on our recently released site search product as well as APIs for checkout, payment, catalogs and orders, with the goal of creating a more open platform environment,” she said. “We recently launched a Facebook login as part of our customer registration system. Of significant note, is the upcoming launch of a new promotions engine, with a planned beta to begin later this month.” APIs are application programming interfaces that enable data sharing between technology applications.

Thompson, noting that mobile commerce has been a weak point for Yahoo, said the company also will be paying a lot of attention to building a strong mobile presence on various mobile devices.  “If we have a No. 1 site through a [web] browser, we just won’t stop until we have a No. 1 position for that same content on mobile devices,” Thompson said.

Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell through Yahoo Shopping and other e-marketplaces, said Yahoo appears to be on the right track as Thompson applies his expertise in online transactions gained at PayPal to Yahoo’s growth.  “Commerce is a natural and good fit for Yahoo to work on,” Wingo says. “I think Scott really saw the value of transactional data at eBay/PayPal and believes they could significantly enhance their ad offerings with that data, and that it’s also probably better for consumers.”

For the first quarter ended March 31, Yahoo said revenue increased 1.2% to $1.077 billion from $1.064 billion in the year-earlier quarter, as net earnings rose 28.3% to $286 million from $223 million. It also said revenue from search ads increased 8% year over year to $357 million, and that revenue from display ads declined 4% to $471 million.

Michael Ober, director of merchant development for Yahoo Merchant Solutions, will speak at the Internet Retailer Conference & Exhibition 2012 in a session titled “10 ways to improve ROI—now.

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