Yahoo’s Kay Skeptical about Local Verticals

Verticals are important to Yahoo! and others on a national basis, but they really aren’t the way to go at the local level because of the limited resources for local sales, says Warren Kay, managing director, strategic alliances, Yahoo Search Marketing. Kay was keynoting Kelsey’s Directory Driven Commerce conference in Reston, VA.

In an ideal world, verticals are the way go. But “most sales forces are organized geographically,” says Kay, “There isn’t enough of a vertical concentration in geographic areas. With a vertical focus, you spend too much time behind the windshield and not enough time in front of customers. Verticalization is nice, but if you are delivering compelling ROI, it may not be as important to talk in their language.”

Kay adds that there is “huge vertical expertise at Yahoo!, at the national level. The ideal situation is where there is knowledge but not concentration at the vertical level.”

Kay thinks that Yahoo is especially well positioned in local and has recognized its importance by elevating local maven Hilary Schneider to the top spot in revenue for the entire company. “We’ve acknowledged the local advertiser and the local opportunity,” he says. “If we want to grow and stay competitive, SME and local is the future“

Previously, Kay notes that he had to “beg, borrow and steal whatever it took to get momentum” inside the company to take the small business marketplace seriously. It has gotten much better. “We don’t have a permanent seat at the adults table, but we are no longer at the kiddies’ table,” he says.

Yahoo! itself won’t be field the local sales forces, however. “We don’t have the structure or the appetite to field a local sales force,” says Kay. “We get to those advertisers by partnerships.”

National advertisers are also playing a big role in the ascendancy of local. National advertisers like GM, Ford, U-Haul, Progressive and State Farm are “coming to us, asking for solutions for their networks and franchises,” he notes. “They all understand they’ve invested a lot in the national marketplace, but they recognize the consumers are using the Internet to find their local businesses.”

On another note, Kay responded to a question about whether Yahoo!’s best days are behind it. “It feels like we are reorganized every other week,” he acknowledged. “I’ve often thought I could start a consulting business based on who I could talk to at Yahoo.” But Kay thinks that Yahoo’s retrenchment is ultimately going to have a positive effect. ‘The reorgs are challenging but we are making the right moves.”