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Yahoo Shuffling Ad Tech Leadership -- Giving Mobile-Focused Flurry Execs More Power

Mobile, mobile, mobile, mobile. Also: Mobile.

According to several sources close to the situation, Yahoo CEO Marissa Mayer is poised to give purview over a lot of the company’s important advertising technology and products team to Flurry execs, specifically Prashant Fuloria.

While senior exec Scott Burke remains SVP of ad tech on its website, sources added that the move could mean key parts of his unit would be under Fuloria’s leadership. While such a change may not occur, several sources said they are expecting some sort of reorg in the division.

Prashant Fuloria of Yahoo-owned Flurry
Prashant Fuloria of Yahoo-owned Flurry

[Update: Several sources said Mayer has sent a memo out to staff about the changes in which she thanks Burke for his contributions. I am trying to obtain, but it’s still not clear if this means his role is different.]

Until now, the well-regarded Fuloria has been chief product officer at Flurry, managing engineering and product for the mobile analytics company that Yahoo purchased earlier this year.

Burke has been responsible for one of Yahoo’s most important and long-troubled units, overseeing — according to his company bio — “innovation and product development for Yahoo’s advertising technology and platforms, including ad management, audience advertising and analytics.”

Sources said Fuloria has increasingly become the go-to exec for Mayer in this key arena, especially as she has focused on growing Yahoo’s mobile business. He and Mayer also share a common background — both were execs at Google before their current stints.

Yahoo ad tech head Scott Burke
Yahoo ad tech head Scott Burke

Yahoo, with Flurry in the lead, recently announced its first mobile developer conference that is set for February 19 in San Francisco. Fuloria and also Flurry CEO and VP of Flurry Products Simon Khalaf will play prominent roles at the event.

Fuloria got to Flurry in 2013 from Facebook, where he led commerce products (at Google, he headed monetization product management).

Founded in 2005, Flurry itself has described its focus as “optimizing the mobile experience for developers, marketers and consumers through personalized ads and mobile analytics.” Through its services, it collects a massive amount of data about the use of mobile apps, which is valuable information for Yahoo.

To my mind, Flurry has been an important buy by Mayer, much more so than the string of smaller mobile purchases over the last three years. While parading around teen-app makers gets more press, Yahoo needs rock-solid tech and data to fight larger foes in the market.

It is important and, under Mayer, Yahoo has been trying to increase its mobile efforts, especially as Facebook and Google have sopped up all the fast-growing business and in the face of a quickly declining display advertising and PC-based business at Yahoo.

In its third-quarter earnings report, Yahoo finally put some numbers on the board, unveiling $200 million in mobile GAAP revenue for the period.

“We have invested deeply in mobile and we are seeing those investments pay off,” said Mayer in a call with analysts then. “Not only are our mobile products attracting praise and engagement from users and industry awards, they are generating meaningful revenue for Yahoo.”

At that rate, eMarketer said it expected Yahoo would become the No. 3 mobile advertising company in the U.S. this year.

Mobile has also been the focus of Mayer in the acquisition arena, and insiders at Yahoo said that she has been mulling a variety of moves using the money the company got and will continue to get from its stake in China’s Alibaba Group.

But big shareholders of Yahoo have been pushing for Mayer to return that cash to them, perhaps even spinning out the core business in a complex tax-focused transaction that would put its Asian assets — Yahoo also has a big holding of SoftBank’s Yahoo Japan — in a separate company.

While this seems interesting only to my cousin, the accountant, it is actually an important decision for Mayer to make and very soon. Yahoo CFO Ken Goldman has promised some clarity on how it will deal with its Asian windfall on or before it reports its fourth-quarter results on January 27.

The choices are many for Mayer and Goldman.

As I noted in November:

These stakes are worth a king’s ransom, upward of $50 billion now, before taxes. This is more than all of Yahoo is currently worth, but Wall Street is discounting the value due to taxes that will be owed whenever those positions are liquidated. For example, Goldman said that the company will pay more than $3 billion in taxes on the sale of stock in the Alibaba IPO.

That’s why Goldman has stressed on calls with investors and privately that he is retaining the best tax experts around to help Yahoo pay a lot less in taxes going forward. And sources said that he is preparing to unveil possible plans to do so soon, even though Yahoo cannot outright sell these stakes until next fall.

But it could do a number of other things before then. That might come in a number of ways, including spinning off the Asian assets in a cash-rich split-off, which Yahoo has considered before. Essentially, it would be able to trade its Asian assets back to the companies in exchange for cash and other assets that they would buy.

Or, as described by investor and Mayer irritant Eric Jackson, Yahoo could do something called a Reverse Morris Trust.

Wrote Jackson: “In this scenario, Yahoo’s Alibaba stake and possibly its Yahoo Japan stake would remain in the YHOO stock vehicle along with a small operating asset (say Yahoo’s listing business). The core business of Yahoo would get spun out into a separate entity. Some cash would go into the new entity and some would remain in YHOO.”

It will be interesting to see what Mayer and Goldman will cook up here. He has been loudly bragging to investors that Yahoo is thinking like John Malone, the cable magnate who was much more of a genius at finding complex ways to avoid taxes.

It has certainly been hiring outside help to make it so. According to sources, along with consultants McKinsey & Company, it has retained a spate of banks, including Goldman Sachs, J.P. Morgan Chase and others.

I have an email into Yahoo PR for comment on this — and really anything at all — and await eagerly by the phone for a response.

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