Yahoo Shakes Up Its Ad Business

Yahoo co-founder Jerry Yang took the reins ofthe company from Terry Semel just last week, and the company is wasting no time making some major changes. Last week, Yahoo acquired college sports site Rivals.com, and Sunday the company announced a major reorganization of its advertising business under a new executive, combining search and display advertising in a model designed to appeal to markets rather than separated by market types.

Yahoo’s new marketing organization will be headed up by David Kardstedt, who’s currnetly head of Yahoo’s search sales business. Yahoo’s former chief sales officer, Wenda Millard, will leave the company effective immediately for a position at Martha Stewart Omnimedia.

The goal of the reorganization is to combine search ads (which appear in search listings, depending on search terms and context) and display advertising (like traditional banner ads) in a way which is friendlier to ad-buyers and marketers, rather than arbitrarily separated by type. Marketers usually focus on campaigns rather than a particular type of advertising: the thought is that buy combining display advertising and search advertising under a single Yahoo unit, the company will be able to package advertising offerings in ways which make sense to marketers on a campaign-by-campaign basis and help them better compete with the likes of Internet titan Google.

“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 Sue Decker, Yahoo’s newly-installed President, in a release. “This is one of many important steps we’re 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.”

Although Yahoo’s recent moves may have the outward appearance of sweeping changes following the installation of a new CEO, the reality of changes has been a more gradual process: Yahoo’s has been planning its advertising restructuring for almost six months, and Karnstedt said completing the transition will take another two quarters.

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