A Yahoo spokesperson told CNBC that the company would provide severance packages to domestic employees who had lost their jobs. Yahoo didn’t provide specific details on the size or value of the severance packages.
He added that the changes will be beneficial for the profitability of Yahoo and will allow the company to invest more in its profitable areas. Yahoo was acquired by Apollo for $5 billion in 2021, and with AOL, the company has made over 30 ad tech acquisitions over the past decade.
Yahoo will shut down its supply-side platform (SSP) and native advertising platform, Gemini, as part of the changes. Instead, the company will use its newly formed partnership with Taboola to sell native advertising.
This move will increase the number of advertisers competing for ad placements on Yahoo properties by 8 times. Yahoo will not be exiting the ad tech business and will instead double down on its demand-side platform (DSP) that helps advertisers buy ads in an automated fashion across multiple websites.
The Yahoo spokesperson added: “The new division will be called – simply – Yahoo Advertising.
“In redoubling our efforts on the DSP on an omni-channel basis, we will prioritise support for our top global customers and re-launch dedicated ad sales teams towards Yahoo’s owned and operated properties – including Yahoo Finance, Yahoo News, Yahoo Sports and more.”
Yahoo’s CEO plans to hire more roles and make more acquisitions to grow the DSP business in the coming months. Under Elizabeth Herbst-Brady, Yahoo’s chief revenue officer, the company will streamline its DSP business to focus on selling advertising to Fortune 500 businesses and premium accounts in its most lucrative global markets.
Yahoo will build out a premium ad sales team for its owned and operated properties, like Yahoo Sports, Yahoo News, Yahoo Mail and Yahoo Finance, for the first time in years.
ADOTAT INSIGHT: These moves will help shift Yahoo’s focus towards growing its owned and operated properties as standalone brands, which is a focus of Yahoo’s strategy under Apollo. The reliance on its own SSP and native ad tech businesses negatively impacted Yahoo’s ability to monetize those channels, but the moves will simplify and strengthen the good parts of the business while sunsetting the rest, according to Lanzone. The CEO added that it was too resource-intensive to do everything at once. The total number of layoffs is expected to be more than 50% of the ad tech unit’s current staff and more than 20% of Yahoo’s current staff.