From Spreets to Tumblr: Yahoo!7 plots its future

It’s been a year since Ed Harrison quit his role heading Fairfax Media’s sales team to be CEO of Yahoo!7. As Harrison marks nine months in the role, he sits down with Nic Christensen to talk about where he sees the digital joint venture going.


The last couple of years have been challenging for Yahoo!7.

That might be why nine months into his role Ed Harrison, the third CEO of the digital joint venture between Yahoo! and Seven West Media in three years, wants to make it clear his approach is markedly different to his predecessors.

“What we have acknowledge is that the focus back on the core of the business,” he says. “The business went through a period where it was very focused on mergers and acquisitions and that gave it a very different outlook.

“We are now at a point where I am very focused on the assets of both my shareholders. I want to extract as much value we can from those assets.”

spreetsOnce a star within the Seven stable, particularly under previous CEO Rohan Lund, the company hit rough waters under his successor CEO Stuart Sayers in 2013 after some of the investments made in previous years such as group buying site Spreets – which cost the company a reported $40m – had to be wound back.

Last year also saw Yahoo!7 give up its search war with Google throwing its lot in with the online behemoth, and more recently it also confirmed it would “retire” its much hyped social TV app Fango, choosing instead to integrate the social function into its video app Plus7.

These issues have been reflected in the most important area for any listed company, the profit front. In 2013 there was a $61.5m writedown in the value of the company, while the latest Seven West Media financial results in August revealed digital assets, which include Yahoo!7 and online classified service Quokka – which does not fall under Harrison’s remit – saw their earnings before interest and tax fall 37.7 per cent to $9.8m.

But when asked about the state of the business he inherited Harrison doesn’t criticise his predecessors, instead declaring: “We have absolute clarity. We are playing to an absolute core strength of one or both of our shareholders – we are not talking about going off on a journey that’s any different to that.”

Harrison’s move from Fairfax to Yahoo!7 in late 2013 caused a stir in market not just because the sales boss was defecting but also because his well regarded second in command Paul Sigaloff moved at the same time, although the pair insist that was coincidental.

After finishing his gardening leave in April, Harrison also commenced a hiring spree building a senior team that took some of Australia’s top digital talent from not only rival publishers but also agencyland.





When asked about the hiring spree, which has seen the likes of News Corp’s Anne Markey, the ABC’s Arul Baskaran and Mindshare digital guru Ciaran Norris join the company, Harrison gives a wry smile and declares: “That has been part of the refresh and revitalisation of the business – a bit of new thinking and new ways of doing things.

“I have in my management team a brilliant balance of the old and the new. A group of people who have been with the business for some time and then you have a new crowd and I think that will be a brilliant combination.”

When asked about the strategy that he and the team will execute Harrison is clear that its new push into native advertising, digital magazines and new products such as a new news digest, that will be rolled out next year, will be key areas of new revenue growth.

However, Harrison is also aware that its video revenue through the Plus7 website, app and HbbTV service will also be key to its future and he is working on how to grow its video inventory amid the ongoing Australian market shortage.

“Plus7 has been enormously successful. Across all our video we are doing nine million streams a month in total, which is very substantial,” he said. “Five million of those are long form and it is clearly the more valuable part, but frankly we can’t get enough.

“There is that shortage so we are working very hard to generate supply in this area.”



Key to the growth is also ensuring parent company Seven keeps growing its video content and Harrison argue the appointment of Clive Dickens as Seven’s chief digital officer will be a help there.

“We are making sure we are optimising all of the content flow out of Seven into Yahoo!7,” says Harrison. “To have an individual like Clive will be great. Clearly Seven needs to be thinking digitally and operating digitally and we need people around the business to be operating in the digital space.

“For us we need their talent blogging, their producers thinking about digital content when they create broadcasts, we need their sales guys working even more closely with us on combine cross platform solutions.

“All of that is happening but we need to accelerate that and we can only do that if there is a deep understanding of digital in that organisation.”

While Harrison is open about his broader strategy and most of the areas where he sees growth opportunities, there is one topic – Yahoo!’s social platform Tumblr – where the digital CEO plays his cards closer to his chest.

tumblr logoTumblr claims around 3m users in Australia, a number that puts it slightly ahead of the estimated 2.8m on Twitter.

Nielsen data notes that half of Tumblr’s Australian audience are aged 18-34, a demographic which is also highly attractive to advertisers.

“It’s an interesting one because it already exists in market,” concedes Harrison, “but explaining it (and its value to marketers/media buyers) is the piece that we need to figure out.

“What we know is that we have this enormous footprint already, even by global comparisons, we have a large number of users here and it is a younger audience.

“We are still forming plans around that, understanding how it has played out in the US and the UK. What we do know is a huge number of the world’s top brands are now using Tumblr – they have a Tumblr and they are now spending on Tumblr.”

Asked if there are plans to monetise the platform here in Australia, Harrison is more coy but notes: “What we do know is there is an enormous appetite from advertisers and agencies to know more about Tumblr and we will capitalise on that.”

On other questions Harrison is more firm. Asked about his views Yahoo!7’s refusal to join the APEX mobile exchange, an initiative he helped drive while at Fairfax, the CEO says it was a question of economics.

“Yahoo!7 is not staying out through any principled objection to it,” he explains. “It is entirely because of the economics of the business here and the technologies that we run on mean we have got a better solution in our own right. That is why we have not participated.”

Similarly Harrison stands by previous comments that his digital joint venture is better off not following the lead of rival Mi9, which last year saw its TV shareholder Nine buy out tech shareholder Microsoft.

“Yahoo! is a very different business to Microsoft to start off with. You can see with all the work we are doing you see where the benefit is and I get enormous support from both Seven and Yahoo!.

“My remit is about how do we maximise their combined resources in this market. We are thinking a lot of about daily habits (of consumers). When you think about Yahoo!7 and what we offer it really does tap into those daily habits that exist across our portfolio.

“Some of our brands are aligned closely with Seven and others with Yahoo!”

Certainly the initial signs under Harrison are positive. In November’s year on year Standard Media Index figures Yahoo!7 was the only major digital publisher, among Fairfax, News, Mi9 and MCN to post a growth in digital bookings, up 12.4 per cent to $66.6m.

While the Harrison concedes there is still a long way to go his eyes are firmly on the goal posts.

“Winning for me is having a group of people who are highly engaged in the work that they do. I want group of people who love the work that they do and want to be here for all the right reasons.

“The other (sign) is about market share, we have set ourselves some very specific goals around audience and revenue share – nothing I’m prepared to share – but if you take our market share gains, we have made gain against our nearest competitors. That is a good starting point.”

Nic Christensen is deputy editor of Mumbrella. 


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