Commercial Success

Yahoo hired Wenda Millard in late 2001, and she went on to instill a new sense of humility and customer service in the sales force. She was well connected to the pooh-bahs of branding and advertising and set out to help them understand and embrace the new medium and realize its potential. (Around the same time, MSN also hired an experienced magazine executive to reach out to ad agencies.) The new cooperative attitude between Silicon Valley and Madison Avenue is a big reason Internet advertising is booming once again: from $6 billion in 2002, it rose to around $9.4 billion in 2004. Yahoo, MSN, and AOL add up to 30% of the market, and Yahoo is the leader with around a 13% share. It's also the number-one brand on the Internet, according to Nielsen NetRatings, with 89 million unique visitors a month in the United States.

Some of Yahoo's ad revenue -- the company won't say how much -- comes from the paid links that appear when you do an online search, an idea pioneered by its rival Google. But more and more is coming from branded advertisers. Yahoo's ad buyers now include more than 70 of America's top 100 advertisers. Ads are now by far the biggest source of Yahoo's revenues.

Before Millard became a pioneer in new media, she was a pathbreaker in old media. She started out selling ads for Ladies' Home Journal and New York magazine, then became one of Madison Avenue's best-placed insiders as the publisher of Adweek and the cofounder of Brandweek and Mediaweek. "I was paid to have breakfast, lunch, and dinner with the industry," she says. When she was named publisher of Family Circle in 1993 at age 38 (before it was acquired by the company that publishes Fast Company), she became the first woman ever to run one of the major women's magazines -- an idea that was considered rather shocking at the time. In 1996, at 41, she was considering rival offers to run conventional ad agencies when she was recruited to lead the sales effort at DoubleClick, a startup that was pioneering advertising on the Internet. "I'm too old, I'm overdressed, and I can't work with geeks," she thought. "But I became absolutely fascinated by the idea that for the first time in 50 years, since the birth of TV, we had a new medium. I didn't understand how the pipes worked, but I wanted to be there at the beginning of a new medium." Millard became DoubleClick's 14th employee.

When Yahoo's new CEO Terry Semel and its cofounder Jerry Yang recruited Millard in late 2001 to reorganize and run its North American sales force, she knew the Web portal needed an attitude adjustment. "I had already spent 20 years in the media business, and it was very frustrating to listen to twentysomethings talk to marketers with disdain," she says. "The Internet industry was leading to its own demise. You have to embrace, not oppose, the industry to lead to change. People aren't going to listen to you unless you're part of their world and you appreciate it."

Millard's changes won over big ad buyers such as Jeff Bell, the VP of marketing for Chrysler's Dodge and Jeep divisions, who recalls, "Yahoo was one of the first companies to say, 'We were so arrogant in the dotcom era. We're repentant. Let's say we're sorry and begin to change immediately.' I think they've done more than MSN or AOL, and they started earlier. Yahoo was willing to listen to us. That sense of humility and service was good."

Millard also realized that clients and ad agencies would embrace the Internet once they understood it better. But before Yahoo could help, it had to get a much better understanding of its customers' businesses and their needs. That hadn't happened when sales reps were assigned target clients alphabetically. Millard reorganized the sales force into 10 teams focused by industry: "You can't address General Motors the way you address American Express or Unilever," she says. "We built our whole strategy around respect for the customer. When you do that, all doors open up."

It wasn't surprising that Hollywood embraced Yahoo after Semel, the former head of Warner Bros., took over as Yahoo's CEO in May 2001. The big studios realized that buying out Yahoo's front page on Thursdays and Fridays was a highly effective way to promote new films. Instead of looking through newspapers, people were turning to sites such as Yahoo to check theaters and showtimes, buy tickets, read reviews, watch trailers, and download "teasers" with as much as the first nine minutes of new movies.