Yahoo's content chief Jeff Dossett, interview part 2

In part two of our five part interview with Yahoo audience group senior VP Jeff Dossett, whose responsibilities include the Santa Monica office, he explains explains why his company is targeting its content at professional Moms, why entertainment and celebrity news is a top priority, and why he's more interested in working with partners for music.

For more on Dossett, see the introduction to part one of our interview series.

Ben Fritz: When you talk about your audience, do you see it as everyone on the Internet? Do you think at this point that you need to make the Yahoo brand as relevant to an eight-year-old as to a really digital, Twittering, Facebooking 21-year-old, as to a 50-year-old parent who's only quasi-Internet-literate?

Jeff Dossett: I kind of refer to that as the billion dollar question.

On one hand, because of the sheer breadth and depth of the audience that interacts with the Yahoo network, it is representative of virtually everyone online, but within that large universe of users and consumers, we are identifying priority audience segments. We're doing a lot of work looking at “Who are we best serving?” from a content and media experiences perspective, and “Who are the audiences that advertisers are looking to connect their brands and their performance offers with?” and prioritizing the audience segments and tuning the programming and content experiences to those priority audiences.

We can't be all things to all people; we need to make some choices of which are the priority audiences. We enjoy a very unique position in the industry; the entire online audience is represented across Yahoo. We have the opportunity to select within that vast universe of users the priority audiences, and better serve them – maybe even attract more to the network – and it's not as if we'll disenfranchise the less prioritized audiences, but when we think about incremental investments and new experiences where we are going to place our innovation investments and bets, we'll be very targeted and very focused.

[CEO] Carol [Bartz] talks a lot about focus, and it's one of the great things she's brought to Yahoo; this constant, positive, constructive questioning about what are we going to focus on and why. Focus means different things to different people at different times. In some cases, it's “What should we do?” and “What should we not do?” and that's really around, “Where do we think we as Yahoo have the capability to do something unique, something differentiated, something that stands out from the pack?”

“That sounds like something that's good to focus on, we should do that.” If we're doing something where we're doing an okay job, but not an amazing job, we ask ourselves the question: “Should we increase our investment and focus on that to get it up to a number one or number two position, or should we do it differently?” – not necessarily not do it, but maybe do it differently – “Where can we better leverage a partner who can help us better serve that audience segment?”

In some cases, we'll say, “We're not particularly differentiated in what we do; we don't really know of another way to do it any better than we do it right now; we're not well servicing the audience segment; that's not constructive for the Yahoo brand and experience,” so we might not do it. Focus comes in a lot of different forms, but it's a very powerful tool.

BF: I'd love to drill into that a little, and maybe first talk about the audience. Can you maybe give some insight into what audiences you're prioritizing? Which ones you're looking at and saying, “This is the one we can really nail” and invest more in?

JD: There will certainly be more than one priority audience segment, and there are lots of different ways of defining audience segments. You can define them on demographic criteria, like gender, age, or something of that nature, or you can look more into needs, behavior and intent. If you take more of the demographic perspective, we over-index, if you will, on a couple of key categories.

A particular segment of the female online population, moms with one or more kids who live very busy lives. We often refer to them internally as “Chief Household Officers,” reflecting the complexity and breadth of their responsibilities both at home and professionally. It's an audience that's of very high interest to advertisers because they spend a lot of time online, they're very influential in a very high percentage of household purchases, and they're actually not well served online today. As an industry, we haven't made it easy for that audience segment to find the content that's relevant to them, that helps them make the decisions they need to make, help them be more productive, etc.

Back to my earlier comments about an audience-centric way of thinking about what we do and how we do it, we've identified that audience segment as high-priority, as well represented on the Yahoo network already. We've identified through a lot of research and insights some unmet or unfulfilled needs and we think we can uniquely create experiences to serve that audience segment so they'll be more satisfied, more engaged with Yahoo, and we'll attract advertising dollars from those leading advertisers who want to connect with that audience. That's one great example. And we're sort of peeling away the layers, looking for insights in our data to find probably two or three priority audience segments among the limitless number of audience segments represented on the network.

BF: What about on the content side? What are some examples of ones you see that you're doing great in, and it's a priority to stay on top? Are there ones you think you're doing okay in and “I want to do better?” Are there ones that you think “We're doing okay, but maybe it's not worth a lot of investment to try and improve it?”

JD: Let me start with where we have a very strong audience leadership position today. Certainly front page, Mail, News, Sports, Finance and Entertainment. Those are very major. If you look at online behavior in total, those experiences represent the vast majority of online behavior, and the fact that we're number one in each one of those key experiences online is, first of all, a very enviable position, but also one that our team is absolutely committed to defend. So those are priority investments for us.

Of those – News, Sports, Finance, Entertainment – I'd say that Entertainment is a very interesting, multi-faceted and very fast growing opportunity for Yahoo. There's TV, there's movies, there's video, there's industry and the behind-the-scenes of celebrity etc, and that's an area where we're certainly going to continue to make significant investments because the demand almost seems insatiable. And today, it's relatively hard for consumers to discover, consume, engage in and share content in that category, so we're doing some really great leading things.

If you take OMG as an example – celebrity news and sort of all things in and around celebrity – that's an example where we were able to look at consumer behavior within the Yahoo network and outside in the industry, and we were able to identify a few nuggets of actionable audience insights, what they were interested in, and how they were interested in finding and interacting with that content. We created a unique user experience. OMG is really an amazing experience for the audience. The photo centric way in which the audience can discover content and engage in that content is industry-leading, and it really just shot up from nowhere to a number one position, and it's extending its leadership right now.

That's a perfect example where you can take content that is otherwise available equally to everybody, but how you create that experience, how you present that experience and how you program that experience can make all the difference. In a very cluttered segment of the market, OMG shot right to number one, and I think that's a signal of what we can do and what we do best at Yahoo. We find actionable audience insights and we focus our investments around those, and we out-innovate the competition in the user experience. That's basically what we're going to do. We add value in three key areas.

We add value in the user experience. User experience can be innovative enough that it's truly worthy of intellectual property. It's patentable innovation, and we believe very strongly in that and will continue to do that. I think that we can enhance content that is otherwise available quite broadly in the marketplace by adding perspective, adding a Yahoo tone and personality, or adding original programming that adds to the experience. You take something like audience interest in television content: obviously, more episodic television is being consumed online than ever before, and so we make sure we're the premiere destination for premium online video. But we add value to that by introducing original programming. A great example is “Primetime in No Time,” a re-cap of what happened last night in primetime. It is an absolute blockbuster hit in the industry, perhaps the most successful online programming ever done on the Internet. I think the streams are now something like 150 million streams. Unbelievable, and that's a unique audience insight. We did all of the research and found out, “Yes, we needed to have all the core content that everybody else has.” That's an essential, that gets you in the game; it doesn't enable you to win the game. But by creating a better user experience and adding value through original programming, we've become number one in that category. And we can do that over and over and over again.

That's the second area. User experience, innovation – original programming to enhance the overall experience – and then the third is this audience and network programming, this capability of presenting the right content to the right audience wherever they are across the Yahoo network. That's an opportunity to better serve the audience and drive engagement.

BF: Are there any places where you're saying “We need to step it up,” or “This is a tough audience, and maybe not something we're actually going to prioritize right now”?

JD: We are looking at everything we do from the perspective of “Where can we differentiate, where can we innovate, where can we establish a number one position?” In some businesses, we think we can do a better job working more closely with partners to serve that audience requirement. The core experience. And then, as I said before, innovate in and around that core experience with the unique and differentiated Yahoo tone and personality and voice, and something original: something that makes that otherwise relatively commodotized content experience unique to Yahoo, better on Yahoo. So I think you'll see us partner more effectively in certain areas, but still innovate in and around that.

Which means that, going back to my earlier statement, we get to focus on what we can do uniquely well, and add value. It's not so much things that we'll stop doing, but I think you'll see us enhance and modify how we do them.

BF: In the past, Yahoo has tried a lot of different strategies in music: Acquisitions of companies like Launch and MusicMatch, original programming, a music download store. But none of it has really taken off and it seems like now you're going towards a point where you'll just partner and not do original stuff with music. Would that be accurate?

JD: It's a very dynamic part of the business. How value is created and shared in the music industry is under transformation, as are many parts of the overall entertainment industry. So we try to look at what can we do uniquely well, where can we work with a partner to provide core elements of the experience, and if we focus on the things we can differentiate – the user experience, the story in and around the content, that might best be served and provided by a partner – that's where I think we can innovate and better serve the audience, versus what others might be able to do elsewhere on the Internet.

Music is a perfect example of stepping back. Whenever we need clarity, we just step back and think from the audience perspective. We think from the consumer perspective: What is it that they want, need or expect of Yahoo? Then we take a look at the prioritized sets of needs and think, “What can we do uniquely well with the skill sets that we have, the experience that we have and the insights that we have from all of the interactions with those consumers?” If there's something a partner can do as well as Yahoo can do it, we should partner. Because then we get to take all the great Yahoo resources here, and focus them to add value on top of that.

You're seeing us look at every single business from that perspective. It really unlocks potential, because we're all resource-constrained. There's so much opportunity in this market, so many unfilled audience needs out there, that you run the risk of spreading yourself too thinly. Part of it is trying to do fewer things, and part of it is within each category, within each set of audience experiences you want to serve, what of that should you focus on. I think we have great upside potential from better partnering, focusing on the things we do best, and I think it's around creating consumer wow experiences, the very best, most engaging experiences on the Internet.

I think Yahoo has that capability. It delivers those experiences day in and day out, and if we focus on that, I'm confident that we can continue to build and engage the largest audience online and most effectively monetize it, which will obviously drive our financial performance and shareholder value.

Coming tomorrow: Yahoo's new approach to developing original programming. And, are traditional media companies partners or competitors?