As an early sales exec at Google, Tim Armstrong was well paid, but itchy for a bigger challenge, so he left to run AOL. Now, as the chief of both AOL and Yahoo under Verizon, he has the challenge of a lifetime: Making an ad business work when Google and Facebook are taking all the ad dollars.
Yahoo and AOL boss Tim Armstrong’s plan to take on Google and Facebook: Go around them
Oath, the Verizon subsidiary that Yahoo and AOL merged into, will find an indirect way to get ad dollars.
John Lamparski/Getty Images for Advertising Week New York
“I think the worst thing we could do is — Facebook and Google are Olympic athletes with gold medal performances,” Armstrong said on the latest episode of Recode Media with Peter Kafka. “We have a differentiated strategy to partner with Google and Facebook, but not directly compete with them.”
Instead, AOL and Yahoo — which are collectively known as Oath — will find ways to give advertisers things the big steamrollers can’t. But Armstrong isn’t revealing much about his unique solutions, yet.
“I’m not going to go deeply into our strategy, but we have a different distribution model, different measurement model and different data model than they’re building,” Armstrong said. “I think you will see us, over the course of the next 12 months, roll out a series of products that are differentiated from Google and Facebook.”
“This is also not a winner-take-all market,” he added. “As big as those guys are, and they are big and they are ferocious from a competitive standpoint, there is so much opportunity left in the world.”
You can listen to the new podcast on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
On the new podcast, Armstrong also reflected on how Google got into advertising in the first place — because even though ads are an $80-billion-a-year business for it now, that wasn’t always how it made money. Google initially licensed its search engine to other companies, until Yahoo undercut that business entirely.
“Yahoo bought two companies and then started giving search licensing away for free,” Armstrong recalled. “We were able to get some of the best engineers at Google, who were working on search licensing, to come work on ad models.”
“And by the way, there was a lot of tension inside Google because ads can be distracting on search results,” he added. “It took us a long time to figure out how to do them properly. It wasn’t like, ‘Oh, great, we have advertising.’ It was like, ‘Oh my God, we’re going to have to put ads on the pages now’ and there was a lot of tension about that inside.”
If you like this show, you should also sample our other podcasts:
- Recode Decode, hosted by Kara Swisher, is a weekly show featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
- Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers all of the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
- And finally, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
If you like what we’re doing, please write a review on Apple Podcasts— and if you don’t, just tweet-strafe Peter. Tune in next Thursday for another episode of Recode Media!
This article originally appeared on Recode.net.
