D6: Jerry Yang and Susan Decker of Yahoo

(05/28/2008)

1:46

Hello! The D6 ballroom doors are open and people are filing in. Standby for liveblog of the Yahoo interview.

Wednesday May 28, 2008 1:46

1:54

[Comment From GuestGuest: ]

When will this start?

Wednesday May 28, 2008 1:54 Guest

1:54

It's overdue. "We are about to begin" they just said

Wednesday May 28, 2008 1:54

1:56

[Comment From GuestGuest: ]

no surprised Jerry's running late. :)

Wednesday May 28, 2008 1:56 Guest

1:56

[Comment From SPSP: ]

What is it? Live blogging

Wednesday May 28, 2008 1:56 SP

1:57

Think of it as Mystery Science Theatre 3000 of conference coverage. They talk, I report. Usually accurately.

Wednesday May 28, 2008 1:57

1:58

[Comment From GuestGuest: ]

:-) Is that u, Rafe?

Wednesday May 28, 2008 1:58 Guest

1:58

This is Rafe, your liveblogger today.

Wednesday May 28, 2008 1:58

1:58

[Comment From OwenOwen: ]

ahhh..any video or audio?

Wednesday May 28, 2008 1:58 Owen

1:58

Nope, the D conference isn't feeding it out. If I find somebody doing a Qilk camcast or something I will post it here.

Wednesday May 28, 2008 1:58

1:59

[Comment From King StarKing Star: ]

This is a great service! I like it!

Wednesday May 28, 2008 1:59 King Star

1:59

Ok, I think they are going to start soon. Once they do, I will become much less responsive to user comments, sorry.

Wednesday May 28, 2008 1:59

2:00

Walt Mossberg up now, setting things up.

Wednesday May 28, 2008 2:00

2:00

Now they're showing a joke video from Yahoo.

Wednesday May 28, 2008 2:00

2:00

[Comment From JVJV: ]

Are you at the conference? If so, can you give us a feel for how it is going? What's the talk about Microsoft/Yahoo or Google/Yahoo?

Wednesday May 28, 2008 2:00 JV

2:01

It's the "Advice" video. Warren Buffet's advice: "Buy low. Sell high."

Wednesday May 28, 2008 2:01

2:02

Howard Stringer (CEO Sony) advice: "Electronics"

Wednesday May 28, 2008 2:02

2:03

The conference is going pretty well. I've been heads down, not hearing a lot of Goog/Yahoo chatter, but the conensus I have been picking up is that Yahoo blew it by not selling.

Wednesday May 28, 2008 2:03

2:04

Zuckerberg's advice: Sell 1.6% of your company to Microsoft.

Wednesday May 28, 2008 2:04

2:04

Just FYI, we are still waiting for the interview to start.

Wednesday May 28, 2008 2:04

2:05

Jerry Yang and Sue Decker now on stage. Walt Mossberg will be interviewing them.

Wednesday May 28, 2008 2:05

2:05

Walt: That film shows "you have a lot of time on your hands."

Wednesday May 28, 2008 2:05

2:05

Walt: Where do you stand right now on negotiating with Microsoft

Wednesday May 28, 2008 2:05

2:06

Jerry: It's been an interesting process. We read more about than we should. The WSJ knows more about what we're doing than we do. It's been fairly well documented that MS is no longer interesting in buying the company. they are discussing various other ideas for partnership with us.

Wednesday May 28, 2008 2:06

2:07

Walt: You're at the understanding phase? I would have thought you'd have months to understand...

Wednesday May 28, 2008 2:07

2:08

Jerry: The process started in a way that was ver public. We didn't know the twists it was going to take. It could have been unfriendly. And know it's becoming a partnership.

There were a number of things they could have done.

Our board .. always said we're open to a transaction. But clearly if the right terms are there, we'll do a deal.

And the right circumstances.

We made that clear to them. But over a period of time, they chose not to pursue the acquisition.

Wednesday May 28, 2008 2:08

2:09

[Comment From TimTim: ]

Raf can you use your cellphone using Qik or something to broadcast?

Wednesday May 28, 2008 2:09 Tim

2:09

Not while I write

Wednesday May 28, 2008 2:09

2:09

Next time

Wednesday May 28, 2008 2:09

2:10

Walt: It wasn't entirely price?
Jerry: It's hard to say. When you break up with your girlfriend... it quickly becomes he said / she said. Both sides understands there were reasons to do the deal, and reasons not to. I'm sort of mixed on what happened. The combination, done right, would have had tremendous power and leverage.

They walked away midway through their offier.

Wednesday May 28, 2008 2:10

2:11

Sue: We never got through the price door. There was a lot that wasn't finished. Price really was the first one.

Wednesday May 28, 2008 2:11

2:11

Walt: Google? You're still talking to them? Why would you want to outsource your search advertisers?

Wednesday May 28, 2008 2:11

2:13

Jerry: If you look at what Yahoo's value is.... We have been transforming the company for a little over 9 months. It continues to take place.

What happens to the search inventory, and the ability for us to monetize it.

We continue to feel strongly about how we monetize it. But also we feel that there is a value gap between us and the market leader

Walt: Say it.

Jerry: I like Google.

Wednesday May 28, 2008 2:13

2:13

Jerry: We want it to be clear to our shareholders that we feel very clear about what we are doing. So we talk about the gap between us and Google and [unclear]

Wednesday May 28, 2008 2:13

2:15

Jerry: We have some understanding of what they could do for us and what we could do for them.

We are a uniquely positioned company... search... monetization system.

Anything that could be done would be a very unique arrangement. Nobody's talka about it.

Walt: Go ahead.

Jerry: I'll get to it.

Jerry: Yahoo has the ability to remain very competitive in the advertising space, and the way we could partner with Google has not been well written about. It's all a lot of speculation.

When we do something, if we do something, we'll talk about it

Wednesday May 28, 2008 2:15

2:16

Walt: Google continues to gain. Steve said last night that Google is in danger of becoming a monoply.

Jerry: That's a word they don't say too often [laughs]

Wednesday May 28, 2008 2:16

2:18

Walt: You have critical mass. But it's falling, isn't it?

Jerry: A couple of years ago, we understood the dynamics of search. We invested in panama (platform), we think we've closed that gap.

As pricing has come up, we've shifted our focus back towards query growth. Last year I think it was 13%...

We think that the refocus is really coming up with more innovation and differentiation. In the next couple of months, we will become more open as a search platform...

You'll see us be a lot more aggressive in the query growth game. And the innovation we're putting in to it. It's starting to pay off.

The search game is very early. How people pass around the results, socialize them... it's still early stage.

Wednesday May 28, 2008 2:18

2:20

Walt: I don't know the details.... but you've been going through this turmoil, and the word is you've been losing people.

And we haven't even said the words Carl Ichan.

And Google is gaining share, everyone else including you losing it. And you're dealing with Wall Street, and takeover stuff, and efforts to take throw out the board.

How do you deal?

Wednesday May 28, 2008 2:20

2:21

Sue: We've had turnover. The right athletes in the right positions change over time.

It has gotten harder to hire, but we hired over 600 ppl in the 1st quarter, though all this.

Wednesday May 28, 2008 2:21

2:22

Sue: We have an incredible project roadmap, that we're launching right now.

We have search moneky, which opens up search on the algorithm side. There's more to come very very soon.

It's a galvaning time for our people.

We have a brand new advertising platform coming out.

There's naturally questions, but it's been a really united force for the employees. We feel like we've gottent the chance of a lifetime.

Wednesday May 28, 2008 2:22

2:22

We are changing the game in buying display advertising.

Wednesday May 28, 2008 2:22

2:23

Jerry: I went to a board meeting (not mine) recently, 10 minutes late, and people said, "oh my god, jerrry, are you ok?"

Wednesday May 28, 2008 2:23

2:23

[Comment From PremPrem: ]

For a change, Jerry is making sense

Wednesday May 28, 2008 2:23 Prem

2:24

Jerry: the process, as sue said, has in many ways pulled yahoo together as a company.

It's a real-life exercise in crisis managment.

What we do, matters.

For good reasons and bad, we are at the center of attention.

Wednesday May 28, 2008 2:24

2:24

[Comment From MikeMike: ]

It would be better Yahoo & Microsoft as partners, to fight Google

Wednesday May 28, 2008 2:24 Mike

2:25

Jerry: We can't be more clear that yahoo was going through a time that we were going through a transition...

But the essence of yahoo is being defined now as a place that makes yahoo stronger. The people who are joining us now are joining for the right reasons.

Wednesday May 28, 2008 2:25

2:25

[Comment From Jay NeelyJay Neely: ]

Search isn't the only game going on. Microsoft is more interested in being a platform than it is providing a tool, and Yahoo is shifting its strategy away from search as well.

Wednesday May 28, 2008 2:25 Jay Neely

2:26

Walt: A lot of people admire your products, like Web mail. But I'm not exactly sure... what yahoo is. Terry Semmel could never answer it in a way that was especially clear.

We know what hte business of GM is, MS, Apple... What is the business of yahoo?

Wednesday May 28, 2008 2:26

2:26

Walt is continuing the ask the qustion.

Wednesday May 28, 2008 2:26

2:27

Jerry: I think of yahoo... we have to be incredibly relevant and meaningful to users. We want you to start your day at yahoo. That means mail, search, mobile....

We want people to come to yahoo first thing in the day, and multiple times during the day.

It's ripe for innovation.

We've actually become more and more focused. That's our consumer goal/dream

Wednesday May 28, 2008 2:27

2:28	Do you go to Yahoo first or multiple times during the day? First ( 7% ) Mulitple ( 31% ) Both ( 17% ) Neither ( 45% ) Wednesday May 28, 2008 2:28

2:28

Sue: We diluted our focus over the past few years

Wednesday May 28, 2008 2:28

2:29

Walt: What people are you focused on?

Jerry: We already reach 70% of the internet. Sometimes people need to be reminded that yahoo touches over 1/2 billion ppl a month

Walt: The justice dept would have figure that out

Wednesday May 28, 2008 2:29

2:31

Jerry: Mobile is an incredible focus for us. The swtich between mobile and desktop is going to be more fluid.

Open platform strategy... imagine developers being able to program on yahoo, like a canvas. That's powerful... yahoo has over 500M ppl...

Wednesday May 28, 2008 2:31

2:32

Walt: You're not going to have Scrabulous?

Jerry: Think about Yahoo Mail. That's a very different route... Or the Yahoo home page... you could have social apps. Or not. People come to just understand what's going on. It's a very different dynamic [than Facebook]

We're more interested in providing the starting point..

Walt: That gives you the opportunity to monetize....

Sue: You go to search to go somewhere else, but the economics accrue to where you go back to.

Wednesday May 28, 2008 2:32

2:33

Sue: There's context around where you are. We have these areas where the social graph can be ignited.

Wednesday May 28, 2008 2:33

2:33

Sue: We can create both relevance and social connectivity

Wednesday May 28, 2008 2:33

2:33

Walt: You've tried. You had Yahoo 360.... none of it worked.

Wednesday May 28, 2008 2:33

2:34

Sue: Think about all the social connections... if we can surface that immediately...

Wednesday May 28, 2008 2:34

2:34

Didn't Yahoo buy MyBlogLog? That's probably what Sue is talking about

Wednesday May 28, 2008 2:34

2:36

Question from Kara, via video: When, Jerry Yang, will yo uhave lunch with me?
Jerry: Can I explain my side? We are raising money for Donors Choose, and you were somewhat behind the other bidders.

Kara: I was number 2
Jerry: You were number 3. If you will agree to donate $500, I will have lunch with you any time you want.

Wednesday May 28, 2008 2:36

2:36

Kara: I will of course get megan to write that check [megan is kara's partner, and works at google]

Wednesday May 28, 2008 2:36

2:37

Kara: What has been your biggest mistake, from a leadership perspective, both of you? Why do you get the big office?

Wednesday May 28, 2008 2:37

2:38

Sue: Yes, as a company we've made a few mistakes. Jeryr and I are excited to address them.

What was lost [in our growth] is the core focus on the ecosystem of the user, the advertiser, the publisher, and the developer that drives it.

Wednesday May 28, 2008 2:38

2:39

Sue: On the advertiser side, if you're focused on selling display, or search, you may not notice that the advertiser does not care. They just want to reach the consumer

Wednesday May 28, 2008 2:39

2:40

Jerry: I am not going to be CEO of any other company unless I start another company. I do think I am the best person to lead yahoo, not only because I bleed purple, but because there is a big opportunity for yahoo going forward.

I understand challenges, and understand that I don't have all the experieince. It's my time to take yahoo to the next level.

The dream that we're talking about here... our advertising strategy is beyond the notion of search and display. it takes advertising to the next level, truly a choice-driven ecosystem

Wednesday May 28, 2008 2:40

2:41

Jerry: [With our current leaders] I really thing we can achieve that. We're starting to show that yahoo can be on this path to be a very different entitity

Wednesday May 28, 2008 2:41

2:43

Walt: Is that evident to users and shareholders?

Jerry: We need to make some investments to make this happen. We came in to this in the back half of 07. There's still a lot of work to be done.

This is not a very quick thing.

The way we can really change the yahoo experience... it's real, it's powerful, it needs to be done, and done right.

The financial results will follow when we transform the experience and deliver the advertising results.

Wednesday May 28, 2008 2:43

2:43

[Comment From LizLiz: ]

""ecosystem"..."the next level"...lots of business speak without being specific

Wednesday May 28, 2008 2:43 Liz

2:43	Jerry Yang: Suitable as Yahoo CEO? Yes ( 28% ) No ( 53% ) Undecided ( 19% ) Wednesday May 28, 2008 2:43

2:43

Jerry: We really do think that this is the beginning of a new yahoo, with incredible potential

Wednesday May 28, 2008 2:43

2:44

[Re the Microsoft deal]: We did not walk away. Microsoft did.

Wednesday May 28, 2008 2:44

2:44

Commentary: Yeah. After three months.

Wednesday May 28, 2008 2:44

2:46

Jerry: It's not something I can go revisit. Beleive me, I understand our relationship to stockholders.

But the focus for us is how to recognize more value for the company. I do think that there are lots of different ways to monetize yahoo.

We're looking at alternatives, but will not forgo our longterm prospects. Real stockholders get that.

Wednesday May 28, 2008 2:46

2:46

[Comment From PremPrem: ]

I like Jerry MUCH BETTER than the semel guy(what a waste of money for Yahoo)

Wednesday May 28, 2008 2:46 Prem

2:47

Sue: The board thinks our inventory is undervalued. Still 60-70% of upside. We know how much value there is on the search side.

90% of the web's inventory is not searched.

We're about to launch a way to make that searchable, and there's probably a 10 to 100x different [in pricing] due to the friction.

Wednesday May 28, 2008 2:47

2:47

Ok, they're going to audience questions now.

Wednesday May 28, 2008 2:47

2:49

Audience: As Web 2.0 takes hold, and people interact more, how does it change advertising?

Sue: When we say "display" advertising, we mean anything. Advertising becomes more relevant. The ambition is to be able to serve ads as relevant as the content.

You can imaging the format changing with the context of the user

Wednesday May 28, 2008 2:49

2:49

Q: Talk about getting into advertising on TV etc.

Jerry: Mobile is the main focus after the PC. We're doing things that work over any IP network, inlcuding IPTV.

Wednesday May 28, 2008 2:49

2:49

[Comment From John PaulJohn Paul: ]

Jerry, you should have done the deal... pulled the trigger... with Microsoft and you and your stockholders would have made a tidy little profit!

Wednesday May 28, 2008 2:49 John Paul

2:51

Q: Elaborate on your mobile strategy. I tried to get it running on an iPhone, a blackberry... didin't work

Jerry: I like technical questions. It should not be that hard. We have an iPhone version. Let me find the URL

Wednesday May 28, 2008 2:51

2:54

Q: Is Yahoo serious about premium offerings? [Questioner had issues, cancelled all yahoo accounts.]

Jerry: There are transitional products we are phasing out, like premium music. We understand that there are people unhappy.

Wednesday May 28, 2008 2:54

2:54

[Comment From TancottTancott: ]

Waiting in anticipation...

Wednesday May 28, 2008 2:54 Tancott

2:54

Don't hold your breath... he sent a minion into the audience to solve it.

Wednesday May 28, 2008 2:54

2:55

Sue: Getting the basics right... if we can't have kickass products we shouldn't be in them. We still have a lot of work to do. We're making progress.

Wednesday May 28, 2008 2:55

2:56

[Comment From Jay NeelyJay Neely: ]

Moderator, you published Tancott's comment, but won't publish my rebuttal to John Paul?

Wednesday May 28, 2008 2:56 Jay Neely

2:56

Can't keep up, sorry

Wednesday May 28, 2008 2:56

2:57

Last Q, Ron Conway: What percentage of the market cap is search?

Jerry: I think the display business could be bigger than anything we've seen on the internet so far. More value over time will be in that business than search.

Wednesday May 28, 2008 2:57

2:58

Jerry: They're all related, and we think display is as exciting as anything we've seen.

Sue: The market is projected to double in next 10 [?] years. In display, the pricing structure is so much lower since it's harder to buy and sell. So imagine a web-based app where advertisers could buy any user they wanted.

Today it takes two weeks to buy multiple audiences. Imagine if you could reduce the friction...

Wednesday May 28, 2008 2:58

2:59

Walt: Thank you very much.

That's the end of the interview

Wednesday May 28, 2008 2:59

2:59

THANKS FOR ALL YOUR GREAT QUESTIONS. I know I didn't get to most of them, sorry about that.

Wednesday May 28, 2008 2:59

3:00

Next liveblog is MARK ZUCKERBERG of Facebook at about 5pm. Watch Webware.com for the updates.

Wednesday May 28, 2008 3:00

3:00

[Comment From LizLiz: ]

Rah, rah, Yahoo!

Wednesday May 28, 2008 3:00 Liz

3:00

[Comment From GmanGman: ]

Thank Jerry for pushing back greedy stockholders. This is not only about money. Yahoo is way above M$ in terms of web technology, audience, and biz ethics. Google certainly would be a better match. Or take Zuckerberg's advice.

Wednesday May 28, 2008 3:00 Gman

3:00

[Comment From GuestGuest: ]

thanks rafe

Wednesday May 28, 2008 3:00 Guest

3:00

Bye all!

Wednesday May 28, 2008 3:00

3:01

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