24/7 Wall St.

Yahoo! (YHOO) management is now admitting that it was slow to react to changes on the internet and in the online ad market. And, it wants to fundamentally change the company to get it in line with the way that consumers use the web.

According to Reuters, Yahoo!’s CEO Jerry Yang said "the company was looking to make its big properties into "starting points" that consumers return to again and again each day, rather than trying to keep them on Yahoo, as it long has done."

The news service adds that part of the shift in strategy is for Yahoo to move away from being a media company that seeks to attract and keep audiences on its own site and to become more of a technology platform that helps users get things done, on its site or off.

Of course, the strategy has drawbacks. Helping consumers find information and data on the web may allow Yahoo! to sell targeted advertising to marketers based on consumer behavior patterns on its websites. But, part of the bargain is that the portal is then sending its users to other internet destinations.  This may build traffic for these web properties, but its is questionable whether Yahoo! will get enough of a toll as the people pass though.

But, Yahoo!’s current model is not working, so it may as well try another.

Douglas A. McIntyre

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