Kara Swisher

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A Brief Chat With New Yahoo Ad Guy Dave Karnstedt

They are getting very shy over there at Yahoo about the all-seeing eye of BoomTownCam. On my recent visit to the Internet giant’s New York office, its newly installed U.S. ad sales head David Karnstedt wouldn’t let me make one of my shaky-style, irksome videos of him. Europe head Toby Coppel also demurred recently.


I made the point to Dave (he is the kind of guy you can call Dave, as you can see pictured here), that an ad guy needs to sell himself, but to no avail, so we press on in text. Nonetheless, let me set the visual scene:

Nicest guy you ever want to meet walks into nondescript room, wearing khaki-oxford-jacket Internet uniform 101. Declares Yahoo is going to kick some advertising butt in the nicest possible way. It is revealed this nice guy has been around the Web block for quite a while. Much chitter-chatter ensues. Cut to my clear-as-Fiji-water observation that nice guy, as nice as he is, has his work cut out for him.

Indeed, Yahoo saw a disturbing falloff in its graphical ad-display business in the last quarter, just as its new system for better monetizing its search business, called Panama, finally got geared up–much, much too long an integration after Yahoo’s purchase of Overture in 2001.

In the wake of these results, Yahoo parted ways rather cloddishly with its longtime ad sales head Wenda Millard. In her place, Karnstedt was installed as head of all North American advertising sales, consolidating both Web-search ads and display ads.

Karnstedt, 41, used to be in charge of just the U.S. search-ad sales, coming to Yahoo from the botched Overture integration, and said it was time is to provide “holistic” solutions to clients. While in that division, he was responsible for selling sponsored search and other analytic products.

New Yahoo President Sue Decker acknowledged the error of the company’s ways in the recent quarterly call. “It is now apparent that by not integrating right away, we did not see as quickly as we might have the requirements to invest in the core product applications and technology platforms, delaying the development of Panama and allowing our competition to establish a monetization lead,” she said. “While we have more work to do, we are now fully integrating Overture throughout the organization and are very pleased with the initial performance of Panama.”

Karnstedt was diplomatic about the inability of Yahoo to use the prescient purchase to keep up with Google, which used the opportunity to run away with the search-ad business. “The decision at the time was to leave [Overture] separate,” he said. “Everything has its time.”

Perhaps, and perhaps Yahoo has finally fixed its search-ad problem with Panama. But then there’s the display-ad issue too and, while he is well-liked within Yahoo, some outside see Karnstedt as only a search-ad exec, more concerned with perfecting algorithms than wooing real live clients, a talent that the big-brand-loving Millard had in spades.

But Karnstedt noted he has longtime experience on both sides of the aisle and that what is happening now is just a further development of the past. “The more things change, the more they stay the same,” he said.

In fact, Karnstedt, a University of Illinois grad, made his way through a series of Internet concerns, some more successful than others, and does have a lot of more traditional online-ad experience. That includes his stints as Western ad director for Wired Digital Lycos, and as general manager of former search powerhouse AltaVista’s search group.

Karnstedt is talking the right talk, to be sure. “We want to really leverage our connection with the Yahoo user,” he said, pointing to recent campaigns with companies like Hellmann’s mayonnaise that include Webisodes and other more integrated advertising solutions. “And get them more engaged in the content too.”

In addition, he said another Yahoo plus is its ability to offer clients more products, especially in content features like its successful Answers product, where Google is not as strong.

“This is old school…how to get things to work together,” noted Karnstedt. “[But] I don’t look at Google like I look at Yahoo.”

It is nice to hear a Yahoo exec not obsessing on Google–and maybe it’s just wishful thinking, especially since No. 3 Microsoft is aiming to use its power to take Yahoo’s No. 2 spot.

While Karnstedt said that being a distant second was not his desire and he is appropriately wary of the powerful Microsoft, he is right that the market was only growing, and having a competitive position like Yahoo does still put it in a good seat for future growth.

He also is heartened by the momentum he said will surely come with Yahoo’s founder Jerry Yang becoming its CEO recently in all the management shake-ups, which also included the departure of high-profile CEO Terry Semel.

“People are excited to have Jerry as head, as he is passionate and people like that,” said Karnstedt.

Which is, as you might imagine, a very nice thing to say.

Please see this disclosure related to me and Google.