Former Yahoo CEO Ross Levinsohn wanted to strike the Microsoft deal that AOL just pulled off
Earlier today Levinsohn commented on a LinkedIn post about the AOL/Microsoft deal from Dan Bonert, head of category sales at AOL. Levinsohn basically said this was the deal he wished Yahoo could have pulled off three years ago.Here's his comment:
For Levinsohn, the AOL/Microsoft deal is all too familiar. It's pretty much the deal he was proposing to the Yahoo board when he was vying to become its permanent CEO back in 2012.As Business Insider's Nicholas Carlson details in his book "Marissa Mayer and the Fight to Save Yahoo," Levinsohn wanted Yahoo to hand over its search business - which at the time had thousands of people working for it within Yahoo, despite the fact that Microsoft Bing's technology powered the search function on Yahoo - to Microsoft completely. In exchange, Yahoo would take on ad sales for Microsoft's properties, including its huge portal MSN.
The idea was that Yahoo could never reasonably compete with Google when it came to search with its own in-house platform, but with partnerships, it could become a huge seller of display advertising to rival Facebook and Google.
Back then it didn't have so far to go in order to catch up, especially if it added Microsoft.This is what the market looked like in 2012:
And here's what it looks like now. Facebook and Google are way, way ahead.
Levinsohn told the board that, under his direction, Heckman had begun negotiating a deal with Microsoft to exchange Yahoo's search business for Microsoft's portal, MSN.com, and large payments in cash. Levinsohn and Heckman had also been talking with Google executive Henrique De Castro about turning over some of Yahoo's advertising inventory. There was also talk of unloading some of Yahoo's enterprise-facing advertising-technology businesses into a joint venture involving New York-based ad tech startup AppNexus.The similarities between the AOL/Microsoft deal announced Monday are uncanny. Microsoft is handing over ad sales to Yahoo, AOL is handing over search to Microsoft (it had previously outsourced it to Google), and Microsoft is even expanding its deal with AppNexus to sell ad inventory programmatically to more markets worldwide.
AOL's Bonert responded to Levinsohn on LinkedIn agreeing that such a deal back in 2012 between Yahoo and Microsoft "would have created a powerhouse in the display marketplace."But appointed Mayer who opted not to take on Levinsohn's plan. Levinsohn left Yahoo and later went on to become the CEO at Guggenheim Digital Media, a media company that invests in and operates properties such as the Billboard Magazine, The Hollywood Reporter, and Adweek. He has now left Guggenheim and serves on the board of directors of several media and ad tech companies.
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