Got here a little late becuase of traffic and lack of sleep...
Terry - Joined Yahoo because he thought it was a great opportunity during the downturn.
John - Did you feel like what is this old hollywood hand doing in Silicon Valley?
Terry - I was looking for a new thing. I wanted to be part of what the young people are doing. When Jerry Yang first approached me I thought no. Then I went home and said this is a great company, great products, great people.
I read all the articles about this moron from Hollywood but this moron saw something worth investing in.
John - You got a lot of attention for hiring Lloyd Braun and opening an office in Santa Monica. Is Terry Semel trying to turn Yahoo into the interactive studio of the future?
Terry - In my old industry the technology innovation happened every few years, you got a dvd etc. that came along. Now you need to be a technology company. You need to have technology, content and distribution. 400 million users is distribution. Content is what Yahoo is all about. Technology is key.
The days of being just a technology company or media company are over. You need to be both.
John - People are scared that Yahoo is moving into their space. You just hired a journalist to go to a war torn area. That seems like CNN's job.
Terry - What Yahoo does is content. There are three ways to generate content. User generate content - 360 is important here, flickr is important. Great area for the internet, great area for yahoo. Look to partners who want distribution on Yahoo. Finally we want to create the framework that moves forward into new technologies.
Encourage you to create your own, to look to yahoo as a distribution platform and to pave the way to teh future.
John - Yesterday Barry Diller answered much the same way about creating content. Is he a formidable competitor.
Terry - I would imagine that his content relates more to his key businesses. We will compete in travel. User generated content is key here. Example of showing blogs and reviews.
John - What is Yahoo? There seems to be a lot of different businesses. News business sees itself differently. Yahoo recently had an incident where they provided information to China that resulted in the jailing of a journalist. Traditional news organizations say they'd never do that.
Terry - 99% of what we do in news is aggregate news. You can participate in news any way you want. When asked by a NY Times reporter how they judge news division, it will be different than TV. Will judge this 18 months from now.
I don't believe there is a company that publishes or distribute in China that doesn't follow the laws in China. I wouldn't confine this issue to China per se. There are many laws around the world that are different in different places. You face a moral and legal issue that you need to follow the laws of the country if you operate there. All companies have this issue.
John - is there a dialog you can haev? Can you protest? Is that impolitic?
Terry - You can make the governments adhere to the letter of their law.
John - You can lobby the government to change but companies don't do that.
Terry - Look at traditional media companies, most of the media has problems with piracy in China.
John - How important is China to your business.
Terry - 400 million people using cell phones and devices. You are better off playing by the rules. Part of the process is to expose people to the Western way. We can't automatically tell them to stick it. It was better for us to be there and hold them to the letter of their law.
John - Let's switch the topic to Google. What do you make of Google's strategy? What is Google's strategy?
Terry - \Google has done a great job in search. They were the pioneer. Yahoo is now full speed ahead. Others are coming into search as you heard from Microsoft. I think that's healthy. Whenever you have one of anything it's better for the user.
I don't want to minimize it but only 5% of the internet is related to search but a big percentage of monetization of search. Search doesn't have personalization, community or content. In order to accomplish this they said we need communications products, shopping, news or orkut. Well it looks like a portal now... how does it rate as a portal? Well as a portal it's rated #4. News is small compared to Yahoo, MSN. Shopping is very small. Mail is a good product but I'd got with WSJ and say that Yahoo's is better. Yahoo's mail audience is 10x the size of Gmails.
Good technology company. Trying to become a portal. Don't seem to have a real plan but maybe magic will happen tomorrow.
John - let's take the market perspective. P/E ratio much higher for google
Terry - 5% of pageviews = 40% of monetization right now. That means that 90% of pageviews have not been monetized well. Paying for things on the internet is growing. Communications and Content is where people are splitting their time.
I assumed that as content got better and become more engaging that there would be more clever ways to monetize those pageviews. No doubt that will happen.
[I totally believe this]
John - Google is going to get into more services that are more portal-like such as jobs. One might presume that they would scrape, aggregate etc. Will you give a feed of jobs to Google Jobs?
Terry - We have always been more open than they are. We see ourselves as an open platform where people can publish on Yahoo. We think the big change is not getting more and more unique users but it will be about deeper engagement as time goes on. All of personalization, all of our community, platform and search will be great. People will have a more valuable experience there. We're really well positioned for where we're going. Yahoo is very well positioned for where we're going.
[Umm... he didn't answer the question]
Question - I totally agree that Google would be rated as the 4th portal. What's the biggest strength that Yahoo has and Google's biggest weakness.
[very funny exchange where Terry asks if he works for Yahoo. Questioner says that he works for MSN - Awesome]
Terry - I don't spend a lot of time analyzing other people's weaknesses. That's not true. I do think about weaknessess a lot, I just don't share those thoughts.
Yahoo has a great diversified model. Advertisers are going to spending more and more online. Hard to judge it today, but we'll be in a lot of the areas.
Question - You talked about user generated content vs mainstream content. How important is the user generated content. Where will you make money in 5 years? User generated or mainstream?
Terry - We want to encourage and enable people to share and create on Yahoo. Let tehm do what they want to do. They want to let advertisers attach to their content so they get paid. Content will get more and more important on the internet. I don't think old media is going to be where people spend most of their time. As to which will be more important. 2 or 3 years ago what we used to call branded advertising or sponsored search which is more important. I have two children that are geniuses. Why do I have to choose one? If one is bigger than the other that's great. If they're both the same that's great too. I see content the same way.