During Yahoo‘s earnings conference call yesterday, CEO Carol Bartz claimed that the company was at the center of the online ecosystem, the largest online media company in the world, and the Internet King-maker. In what may also be seen as a pitch for both advertisers and publishers to partner with Yahoo for its homepage, Bartz said the company sends millions of pageviews to sites every day: for example, New York Times, she claimed, got nine million in just two hours for an article about bargain housing linked from the Yahoo Homepage.

This appears to be a concerted effort at changing the perception of being a laggard, that Yahoo had gathered over the past year or so, in comparison with search competitor Google, particularly after the uncertainty following a rejected acquisition bid from Microsoft. Bartz said that the company is seeing less fear in the marketplace, and will be ramping up spending on priorities this quarter.

Bartz identified three priorities for the Q3, much like she did for Q2:

1. Putting a great leadership team in place: CFO Tim Morse joined in Q2, and Yahoo is closing in on someone to head their International region
2. Define audience priorities and make verticals like their homepage, mail and media properties more “open, social, video, mobile and more”. Also make ads more relevant and less irritating to users.
3. Focus on internal and external business processes; make Yahoo a better company to work for and with.

Hiring Plans

After layoffs and cost reduction last quarter, Yahoo plans to recruit – adding people back into product and engineering. “As I said last time, we have too few engineers and too many people planning products. We are hiring back in engineering. We have sales people coming into the quarter. Now we are putting engineers, sales people and marketers against those product people. There is nothing…that is frankly what that is all about.”

On Bing

Bartz thinks Bing is a good product. “It actually extends sort of the experimentation around search and how people use it instead of just thinking like a standard blue link. I think they have done a good job. Unfortunately it is only a month into it so it is pretty hard to understand whether it is just curiosity driving what is happening or they are actually going to gain share.”

Open Strategy

The Yahoo Homepage will subsequently include over 65 applications for users to add. We’ve covered the launch of the Yahoo India homepage. Bartz adds that the company will incorporate country-specific apps to ensure a more relevant experience. Additionally, Yahoo Mail will become more social too. Yahoo will roll out the homepage in Europe and Latin America next month and into Asia early next year.

Mobile

Yahoo will be focusing on making its products mobile enabled: starting next week users will be able to synch their desktop with their mobile. Bartz stressed on Yahoo’s mobile momentum – available in 17 countries, across 400 devices, in partnership with over 100 carriers and OEMs. She added that Yahoo recently replaced Google with a leading telecom operator in Taiwan, replacing Google. Note that Aircel has been promoting Yahoo services on the mobile in India.

Entertainment Focus

Yahoo has officially added entertainment as a priority global category, and it’s about time too. Bartz said that a large number of searches on Yahoo are entertainment related, and the Entertainment category is growing faster for Yahoo than any other on their network. The company will develop a platform where “we can skillfully manage related feeds and videos across our network to create more pop when we need it.”

Advertising Related Inputs

Pageviews: Overall page views up 7%, with spikes in traffic around significant news events during the quarter.

Search: Worldwide Owned & Operated search revenue declined 15% to $359 million. The U.S. portion of Owned & Operated search revenue declined 13%. Query volume grew strongly at 9%. However, RPS (Revenue Per Search) declined substantially due to lower click yields, because of a decline in the commercial intent of users. Note that clickthroughs for Google have also been affected, despite increase in search volumes. Yahoo has seen an increase in search volumes as well. International search revenue was down 27%, though only 13% on a constant currency basis, impacted by RPS decline.

Display Advertising: Worldwide Owned & Operated Display revenue declined 14% to $393 million. US Display declined 11%, and International declined 20%. Non-guaranteed display revenue continued to grow strongly, and on a sequential basis guaranteed display revenue increased. Sell through rate for guaranteed inventory improved in Q2 based on strong demand from large advertisers.

Categories: The telecom, health and consumer products categories grew modestly year-over-year; most other categories declined. There are signs of stabilization in the automotive sector.

Affiliate: The affiliate search business was somewhat stronger than O&O during 2Q but we believe this was a temporary deceleration in the longer term trend of this business.

Dealing with cheaper ads: Dealing with ads that frustrate users, and “are a detriment to us, decreasing user and premium advertiser engagement and cheapening the Yahoo brand” will be a priority for Bartz team. “It is just as important as the features we are working on to improve the content and services we offer,” she said, adding that better ad relevance increases user engagement and better user engagement delivers more ROI to advertisers.

New Ad Solutions: Yahoo piloted a self service advertising solution called My Display Ad, targeting small and medium businesses for advertising on Yahoo and partner sites, and also launched their Smart Ads partner program which pairs Yahoo’s massive reach and targeting capabilities with leading third-party ad technologies.

Related:

— The New Yahoo Homepage Goes Live In India; Indian Add-ons?
— Q2-09: Yahoo Reports $141M Net Profit; Revenue Down YoY & Sequentially