Zacks analyst Ryan McQueeny has three big suggestions for what Verizon should do with Yahoo, now that the buyout is a done deal.
Suggestion 1: Dump Marissa Mayer
Yahoo probably needs a change at the top.
Although people seem to like Mayer as a person, the CEO of Yahoo isn’t exactly a favorite amongst analysts. Mayer is planning to stay on as long as they’ll have her, but Zacks has another idea: “Mayer joined Yahoo four years ago to start a turnaround effort, and that effort failed. It’s time for someone fresh to take her position and start a new turnaround plan.”
Suggestion 2: Mine Yahoo’s Massive Data Trove
With over a billion monthly users, Yahoo’s network of sites and services is huge. That means a big opportunity to leverage user data.
“Verizon needs to do everything it can to learn about these users. We’ve seen companies like Facebook and Alphabet succeed with targeted advertising because they do a very good job learning about their users’ online tendencies,” says McQueeny.
Suggestion 3: Content, Content, Content
The days of Yahoo being a leading search engine are over: it now owns only 2.1% of the global search market.
Instead, Yahoo should focus on its media properties like Yahoo Sports, News, Finance, and Tumblr. McQueeny says that “When we look at these segments, it becomes a bit clearer where the value in Yahoo’s core business is. Over the past several years, the company has built up a formidable amount of content, and with the right tweaking, it could become an internet content king.”
Yahoo! Inc. (NASDAQ:YHOO) shares fell $1.05 (-2.67%) to $38.33 in late trading Monday. Verizon (NYSE:VZ) stock fared a bit better, losing $0.31 (-0.56%) to $55.78.