What Hearst Hiring a New VP Digital Says About It - and Yahoo

It was a total kick to hear that Neeraj Khemlani, Yahoo's general manager and executive editor of news (appointed by Scott Moore) is heading to the Hearst Corporation as a VP of Digital reporting to Frank Bennack, who has been acting CEO since the summer.

Bennack is quoted as saying:"Hearst's major operating groups have all made substantial progress towards our corporate objective of fully participating in the digital transformation. The creation of this new position is designed to accelerate the progress through greater cooperation and synergy across divisional lines. Neeraj is uniquely equipped to help me and my colleagues realize that goal."

And Neeraj is quoted saying: "I am delighted to join Hearst Corporation. We are witnessing the reemergence of content and media driving value in the new world and Hearst is uniquely positioned to realize that value across multiple digital platforms and distribution points. Remember, we're only in the second inning of the Internet. Hearst, with all its assets and investments, expects to take a commanding lead by the seventh-inning stretch."

Can I be allowed a cackle, or a least a translation from the corporate-ese?

For those who might like to deconstruct this press release, let me offer my opinion of what the real statements are:

Benneack deciphered: "Cathie Black has a whole division with more than 20 people, headed by Chuck Cordray, and the Newspaper group has another team, headed by Lincoln Millstein, and then there is an M&A group, headed by Scott English, but none of these teams is getting us digital media revenue and revenue optimization quickly enough. so I am going to hire this fella from Yahoo! out in Silicon Valley to come in and get me more money."

Neeraj deciphered: "I understand I am moving across the country and leaving a company whose stock is at $12.00 to take a job where I have no one reporting to me, but I have done this before and I am reporting to the CEO, so the future has great possibility."

As for where this leaves Yahoo!, I feel badly for Hilary, who is now losing someone she knows who could have continued monetizing content for her, but so it goes, right?

And this is a perennial Yahoo! problem--they bet on people who don't respect them enough to stay.

Over and over.

Note: Nice piece by Staci Kramer at Paid Content interviewing Neeraj

Comments

[Midwest:]

In the past, I have worked for the same company as Mr. Cordray and he is one sharp guy. He's realistic and smart.

However, Hearst is bringing in someone that supposedly can monetize more content but this smacks of a realization that the digital world is probably always going to trail traditional media in ad revenues. This is a Hail Mary pass.

Neeraj Khemlani may be seen as some kind of magic bullet for Hearst but Hearst would be smarter to realize that the digital world only exists because of the content made for traditional media makes digital media cheap enough to push out to the consumer.

If digital media faced the production costs that traditional media faces, there would be no digital media of any kind. The revenues generated by digital delivery is a fraction of the cost needed to make the content and it would be bankrupt in a month if was not feeding off the teat of print and TV.

Neeraj Khemlani faces an uphill battle and I believe that Hearst will have one expensive employee wholly unable to deliver on their unrealistic demands.

Yahoo may be the core of this article but it is another symptom of how the digital world is failing to deliver.

Outside of Google, there are next to no sites that deliver a service (like search, for example) that make money. The home runs in the digital world obscure the fact that the vast majority of sites are making incremental changes to a company's bottom line while adding tons of headcount to their company's payroll.

The day of some companies reining in their web site costs may be sooner than we think. You may see some major sites being shut down as the additional revenue may be seen as inadequate, especially in light of the real costs of maintaining large sites becomes an issue. Digital delivery is no longer cheap and the upkeep is slowly becoming more and more difficult to keep low.

My former company added nearly a floor of people simply to keep their sites up and running but that many heads do not come close to generating the same revenue as a half floor of employees dedicated to my former company's core deliverable (print media).

Feb 24 11:26 PM