warning that a slowdown in its display ads would lead to weaker second-quarter results.
San Francisco — Yahoo Inc. said Sunday the Internet media company will combine its Search and Display advertising sales teams in the US, and has appointed David Karnstedt, currently senior vice president of Yahoo!’s Search sales business, to lead the unified organization as Head of North American Sales.
Recently elevated Yahoo President Susan Decker said in a phone interview that the consolidation of Yahoo’s two advertising arms — display and Web search advertising — reflects growing demand by customers for campaigns that combine both types of ads, with newer types of video advertisements.
As the internet powerhouse fights to catch up with online search leader Google Inc., said it hopes the latest shake-up will streamline the way it sells advertising to customers who increasingly want to buy ads across a variety of formats, from being linked to search terms to popping up as a graphical display to being shown as video.
Integrating our world-class search and display sales teams under David’s leadership will allow us to better serve all of our advertisers’ marketing objectives ranging from brand awareness to direct response, said Decker.
Karnstedt, 41, a long-time Yahoo! executive and industry veteran will continue to report to Gregory Coleman, 52, Yahoo!’s EVP of Global Sales.
“When combined, the two organizations will deliver profoundly better results than when delivered separately,” Coleman said.
This transition continues the steps Yahoo! has been taking since the beginning of the year to organize product management, engineering, and distribution around marketing customers rather than advertising products.
The reorganization means the more than 1,000 ad sales people at Yahoo will now sell a combination of ad types, including links next to search results, banner ads, and video spots. Yahoo is making the change, which it said was six months in the making, after co-founder Jerry Yang succeeded Terry Semel as chief executive officer a week ago.
The reshuffling follows a major executive overhaul announced last week, with co-founder Jerry Yang replacing Terry Semel as chief executive. In the latest organizational change, Yahoo said Wenda Millard, chief sales officer in the US, is leaving the company effective immediately.
Wenda Harris-Millard, who oversaw graphic ad sales, left the company and will join Martha Stewart Living Omnimedia Inc. as president of media on July 16.
Harris-Millard, a 30-year veteran of the advertising and publishing industries, had joined Yahoo in 2001 and helped the company gain credibility with top corporate advertisers as they considered shifting ad budgets from traditional media online.
While praising Millard’s contributions over her past six years with the company, Sunnyvale-based Yahoo said the industry has changed and the company needed a manager with different skills to push the company forward.
Considered one of Madison Avenue’s most influential executives, Millard, who has been a member of Martha Stewart Living Omnimedia’s board for the past three years, is charged with beefing up Web operations for the lifestyle media and merchandising company as well as running publishing and broadcasting.
In an interview with The Associated Press, Millard, who immediately announced that she has taken the newly created position of president of media for Martha Stewart Living Omnimedia Inc in New York, said she bore no ill will toward Yahoo.
“It was a great six years, I had a wonderful time, but I wanted to do something a little bit broader,” she said. “It is not really a comment on Yahoo. It is really a comment on where I wanted to go next, and this was just a great fit.”
On Monday, Yahoo warned that slower growth in display advertising would offset a better-than-expected performance from its recently upgraded search advertising operations.
As a result, it said it expected second-quarter revenue to land in the lower half of its previously stated outlook which, excluding the cost of payments to advertising partners, was projected in April at between $1.2 billion and $1.3 billion. Ad marketing generates more than 80 percent of Yahoo revenue.
By taking a more holistic approach to advertising sales, Yahoo! will become a more consultative seller, which should make buying complete solutions easier for our customers across Yahoo! and our partner network, said Karnstedt. “These moves will also enable our world class sales team to more effectively meet the needs of our advertisers – not just today but well into the future.”
Karnstedt’s career in online advertising stretches back to 1996, when he worked for Softbank Interactive Marketing, which functioned as Yahoo’s early outside advertising sales force.
Like Harris-Millard, he also has been heavily involved in efforts to win acceptance for online advertising techniques among corporate advertisers.
Yahoo has been looking for ways to gain ground on Google in the lucrative online advertising market, where Yahoo ranks a distant second despite once being the larger of the two companies.
An integrated approach to online advertising has become increasingly important as Yahoo seeks to boost the share of its advertising business on sites off its own media properties. One major hope for Yahoo is the upgraded advertising system it introduced in February. However, the payoff from that system is not expected to start materializing until later this year.
As examples of this, Decker pointed to deals Yahoo has to supply both display and search advertising for online auctioneer eBay Inc., Comcast Corp. and a U.S. newspaper consortium made up of 15 companies and more than 250 newspapers.
This is one of many important steps we are taking to re-invigorate our display business, further build on our industry-leading position in advertising, and drive thought-leadership in the online advertising marketplace, Decker added.