• by Laurie Sullivan , Staff Writer @lauriesullivan, March 25, 2011

During the past few years I've had the opportunity to speak with engineers at Yahoo about innovations in search and display advertising. While some could bring Yahoo out of its search slump, I'm at a loss to completely understand -- aside from search volume on the engine -- why advertisers and marketers fail to see the change as positive. Analyst firm eMarketer this week released data estimating Yahoo's steady decline in search market share.

So, when I had the opportunity to talk with two former Yahoo execs, I dove feet first into the question.

Martini Media's board member Usama Fayyad, the former NASA scientist who founded Audience Science and created Yahoo's data architecture, and CEO Skip Brand, who ran Yahoo's "big-spender accounts," have an interesting inside perspective into the topic.

When Fayyad worked at Yahoo, its innovations were hailed as leading-edge applications. At the time, Yahoo sat at the forefront supporting the largest data and behavioral targeting systems, with more than 500 million consumers consuming about 25 terabytes of data daily. The marketing community recognized Yahoo as a leader.

Some technical innovations continue to emerge today. "I think what we had was a strong connection between the business, the sales departments, and the technology department," says Fayyad. The three divisions worked together closely. "I was in engineering, but spent more than half my time in sales, with business groups and on the road talking to customers," he says. "I think Yahoo lost that over the past three years."

Engineers can't lose that connection with marketers and the ability to plug into their daily concerns. Fayyad says it's not enough to create and release technical innovations. "There was no way on earth Yahoo would have taken the revenue from $20 million in 2004 to nearly half a billion in 2008," without the engineers, the business, the data and the research groups working closely with sales and analysts.

From the outside looking in, Brand agrees with Fayyad that the close working relationships between divisions once hailed at Yahoo no longer exists. Brand makes it a point to explain that the changes are not a reflection on Yahoo CEO Carol Bartz's leadership -- but that an inability to communicate across groups seems to exist.

"The company seems more risk-averse," Brand says. "We got to call the shots because we were small, and things got done. ... The way to move forward, as a small or large company, is to predict something and follow it up. Even if it doesn't work well, you still have to tell that story, and for some reason they're not doing it."

Both Fayyad and Brand say former Yahoo execs and others at Facebook, LinkedIn, Groupon and Living Social are following the same early culture that made Yahoo successful.