Where a Yahoo-AOL Merger Would Leave Patch
Like that old unfunny joke about opinions and noses (everyone’s got one) it seems pundits near and far are sticking their own schnoz into AOL/Yahoo’s business once again and taking a shot at predicting a merger (again) now that both companies are sidewise, Yahoo CEO Carol Bartz is down, and AOL chief Tim Armstrong is looking up from another uneven quarter hoping for something (anything?) good.
So anyway, I’ll play along too, circling behind other prognosticating vultures, analysts and experts convinced they can do things a little better if they are one instead of two. It all makes for compelling drama for sure, but suppose the squashing of old-timers did happen? Surely some things would pop out as duplicative or must-haves. And one area likely to “pop” in both categories is “local” — i.e. Patch, Yahoo’s “Neighbors” beta product, and a litany of other products on each side that are heavily reliant on local advertisers and audiences.
This new team made up of Yahoo technology fused to AOL’s platform and editors plus the resources of those sharp mobile-forward startups would clear the way for a new kind of property.
Yahoo has been in the local content and advertising business for years. Today a visitor is greeted by a city guide, a local directory and a beta product called “Neighbors” where registered users can post queries and business opportunities. You can even become an old-fashioned “Neighbors” promoter. Patch on the other hand has opted for a higher touch path to local-vana. Their editors are spread across more than 800 communities with actual paid (and semi-paid) professionals at many levels. It’s an enormous infrastructure, as I’ve mentioned prior. The business, however, is another debate.
So, to the options.
Cut and focus. In a merger scenario the finance wonks would undoubtedly be all over the combined company to cut and focus. My gut would be to look first to local and mobile, and combine their force.
Next decision: who and what to keep. While I actually like the idea of getting hyperlocal content from ambitious adolescents, something Patch is reportedly doing (by looking to get teens to contribute) and something I’ve advocated for previously, I think there might be a simple enough platform in Yahoo’s neighbor-contributing tool. That could be the yin to Patch’s yang — “we’ve got the curators, you’ve got the user content … let’s do this!”
But hang on… what about all the rest of the non-local properties that regurgatate gossip and video of people falling down and recipes and NFL scores? I’m with Jason Calacanis, in the end, when he argues that a conjoined company should hire a true product pro to lead the forces rather than a marketing or sales exec to take charge. I have chosen to believe there is no chicken-egg problem in the online services equation… people need and want a great product that drives traffic and engagement and finally revenue. Bang-on marketing campaigns, on the other hand, can drive lift briefly (Old Spice) but things quickly come back to earth. Granted, you’re not going to get an alchemist like Steve Jobs in the spot, but certainly there are great product marketing gurus who can take these other, non-local entities and package them a tier above the consumer point-of-entry: local. (I wouldn’t name anyone, but Mr. Calacanis has a strong opinion for who that should be. Give ya one guess.)
Doing this could rapidly dispel the chatter about “two old dogs tied together,” but obviously it would only be the start.
Stop the duplication. Next to tackle the repetitive local elements at AOL (MapQuest, City’s Best, HuffPost Local, Patch). Keep the brands, okay, but merge the products and content. Stop the duplication. Same at Yahoo. Then, turn back to that ruthless product lead, the one focused only on consumer needs, and start the analysis of what Legos can fit together and which actually should. The remainders find their way to the cutting room floor. This starts to gets you nearer to nimble.
Integrate the vertical locals. Following that comes the local verticals, where both companies make some decent coin. These are reasonably easy to merge when you’re talking about data-driven listings and such — autos, Real Estate, classifieds. Plan would require that these former verticals actually become integrated products within the local experience rather than islands. In a combined company with local and mobile out front, these and other verticals could take a key position in future revenue.
Double down on deals. As for deals and coupons and daily deals (oh my), Yahoo offers categories for each of these as well as one for “local deals” but this is largely an aggregation of deals from the incumbents. Patch has a growing voice in the community, possibly (possibly) able to use that voice to trumpet the deals to consumers who trust them. Bottom line: Provide aggregate deals the Yahoo way (from other players) but tuned to the neighborhood level and articulated through standard and editorial channels. Supplement with Patch sales team exclusives.
Finally to deal with the content across the local fronts itself. As in almost any significant media network the content varies from city to city — and it does so with Patch. The tone and flavor certainly should vary; the quality and depth should not. The local editors in a combined entity would rely heavily on curating the community and engaging them for material but always have the support of experienced content developers at the region level who are engaged and empowered (and not wholly focused on delivering a quota like a line worker). This new team made up of Yahoo technology fused to AOL’s platform and editors plus the resources of those sharp mobile-forward startups would clear the way for a new kind of property.
This formula successfully commingles tools of daily utility that people will love — and actually use — while driving revenue down new streams. The property will not go out of its way to scream “We’re About Local” with cute names and logos, nor “GeoSocial Here!” … It won’t have to, because people will be too busy experiencing a better way to even notice. It will just be.
But then again, I’m just another guy with a nose who thinks he knows.
Rick Robinson’s Turf Talk column appears every Wednesday on Street Fight.