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Yahoo Taking a Cue from Twitter, or Something Else? Introducing Yahoo Stream Ads

Posted April 29th, 2013 by Andrew Goodman

Has Yahoo been doing enough to monetize its home page?

Sounds like one of those questions that might’ve made Yahoos really bear down and think hard in 1999, and again in 2003. Which is why, a decade down the road, I wonder if Yahoo needs to reinvent itself entirely, rather than just try to execute better on being Yahoo. That was the argument I made in my previous post. (I’m sure quite a number of folks at Yahoo disagree.)

This week I caught wind of a new beta product that’s about to launch for advertisers: Yahoo Stream Ads. (Screen shot below.) The ads are being promoted to advertisers as being “native” and “performance-based.” Based on some personalization, the ads will run on the Yahoo home page as units accompanying the news stream.

The fact that “monetization should be native” is something I gather Fred Wilson knows a lot more about than I do — or pretty much anyone else. For this reason alone (Wilson’s savvy and that being conveyed to the Twitter braintrust), I figure that Twitter has a chance to figure out its monetization puzzles and thrive financially, despite long odds.

Yahoo’s new ad offering looks kind of like what Twitter is doing, but based only on screen shots and some brief bits of hearsay, I’m not really sure what it is. It seems a bit to me like merely contextual ads that may be shown to users who have certain interests, when they are viewing certain kinds of content. This kind of advertising can work, as many of us have seen. The more the algorithm learns about relevance and performance, the better it can work.

Yahoo Stream Ads

How significant is this development? I suspect it’s just another small piece as publishers focusing on less effective forms of performance advertising experiment with what many advertisers are starved for: performance-based media that can be tightly segmented.

As for how “native” various forms of monetization are, that’s going to be a subjective debate to an extent. The only real certainty is that many forms of display advertising are ineffective, irrelevant, and from a business model standpoint, essentially broken.

Would Yahoo do better in future if it focused on, for lack of a better term, native advertising that advertisers can count on to perform well? Of course. If only Yahoo had somewhere other than the Yahoo home page, or the current generation of what Yahoo counts as content, to run this advertising. But this too may come.

P.S. Did Yahoo get the idea from this guy?

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