What does Yahoo! do with the customer information it collects?

Posted Dec 19th 2007 5:10PM by Brian White
Filed under: Consumer Experience, Internet, Competitive Strategy, Yahoo! (YHOO), Technology

After reading the resume and qualifications of Yahoo!'s (NASDAQ: YHOO) Usama Fayyad, it's hard to see what this exceptional Yahoo! employee does with the mountains of data Yahoo! collects every single day. For those that know computer store lingo, Yahoo! collects between 12 and 15 terabytes of data over its global computer network every single day. This actually may not seem like much in 2007, when many of us have a terabyte of disk drive storage in or around our PCs. But, Yahoo! generates that amount times 15 -- every single day.

What on Earth is the company doing with all that data? Parsing it to be as intelligent as possible when it comes to targeted advertising to the hundreds of millions of Yahoo! customers? Building a massive database of online customer behavior profiling? Truth is, nobody outside the top ranks of Yahoo! can possibly know what the internet company does with all that data.

One thing it's not doing -- yet -- is making sure the advertising each customer sees when on a Yahoo! web property is as precisely targeted as possible. Google (NASDAQ: GOOG) started this ballgame years ago by relating internet search terms to text advertising links. Yahoo!, of course, does this as well, with the new Panama platform. What else can it do to make use of all that valuable data? Whatever it is, it can't come soon enough. Say it with me, Yahoo! -- monetization.

Yahoo! is one of the world's most-used web properties, with services from movie reviews to email to search to online dating. Why, then, is Google beating it up hand over fist with search advertising revenue? Easy -- Google was there first, with a model that worked very well. Being first-mover in that space, Google will be impossible to remove from that perch. This does not mean Yahoo! can't be just as successful using customer data intelligence to match each customer with what he or she is looking to do on Yahoo!'s immense web properties. That is, if it can make use out of all the data it collects and really get to know its customers.

Tags: advertising data, AdvertisingData, yahoo customer privacy, Yahoo!, Yahoo! customer data, Yahoo!CustomerData, YahooCustomerPrivacy, YHOO