Yahoo is celebrating its 15th birthday this week, and a lot has changed since 1995. The company once known for its search business has ceded control of that area to Microsoft in a deal that is still waiting for regulators to come to fruition. But Yahoo CEO Carol Bartz thinks the company has a leg up on the competitors in one area: data. 

Speaking at the American Association of Advertising Agencies' Transformation Conference in San Francisco on Monday, Bartz reiterated what her company has to offer:

"We have so much data at our fingertips; we're drowning in data."

And she had one piece of evidence to prove how powerful that data can be — a new ad partnership with Walmart.

In mid-February, Yahoo began rolling out Walmart's new ad campaign — the retail giant's largest digital campaign ever. Why did Walmart choose Yahoo to deploy the campaign? To get its ads in front of the audience Yahoo can deliver. According to Forbes:

"Walmart is gaining access to Yahoo!'s giant pool of moms, around 23 million of them flock to the site each month to check their e-mail, read the news and play online games."

Meanwhile, Yahoo's impressive audience delivery is being hindered by botched customer interactions. Bartz said on Monday:

"We know we have to be more responsive. We have to work the friction out of our system."

But the company also has other areas that need work. Says Bartz:

"It's clear to us that we need more scale, more innovation and a better fighting spirit."

That's part of the reason that Yahoo is working with Microsoft on search — to get more competitive against Google. But ceding its control over search to Microsoft could also affect the company's store of user data. As Fortune points out:

"Yahoo’s biggest revenue stream, display advertising, depends on search data to work well; less search share equals less effective brand ad technology. Bartz is well aware of the stakes: David Pann, Yahoo's VP of search advertising, said "it is a top priority of Carol’s to address the search share issue" – which means heads will roll if it doesn't get done."

Meanwhile, Yahoo's search marketshare is down since its merger with Microsoft: about 2.5 percentage points since the middle of last year. It will be awhile until the details of the Microsoft deal come to fruition, but if Yahoo can get a few more big ad deals like Walmart, they'll have a little more wiggle room to figure it out.

Meghan Keane

Published 2 March, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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