This is the definition of a defensive crouch: Explaining, over and over again, that you’re not in a defensive crouch.
We’re not sure that given the circumstances, anyone in Jerry Yang’s position could have come off well at the D conference today. Jerry certainly didn’t: He struggled to articulate what he wanted to do with the company, but blamed the press for not paying attention to his plans. Asked why he should lead the company, he argued that while he didn’t have that much experience, he “bleeds purple”.
He was direct about one thing: His version of the busted YHOO/MSFT deal. Contrary to what Steve Ballmer has said, Jerry insisted, it was never that close, and it wasn’t just about price. Oh — and that even if he wanted to do the deal, he couldn’t because Ballmer had walked away.
Message: “Leave me alone!” (Mike Arrington’s take: “We’re Done“). But we don’t think that’s going to work on Carl Icahn and crew.
Transcript/summary follows. Video highlights, in two parts, at bottom of post.
Yesterday at the D conference, Steve Ballmer insisted that Microsoft(MSFT) wasn’t interested in buying Yahoo (YHOO) outright. Conventional wisdom at the D conference today: He’s absolutely interested in buying Yahoo. Let’s see what Jerry and Sue have to say about that.
Intro’d by weird video starring Jerry, Sue, Zuckerberg, Buffett, Michael Dell, etc.
Walt interviewing (where is Kara?). So where do things stand?
Jerry. “It’s been a very interesting process. We read about it more than we probably should. It seems like the Journal knows about what we’re doing before we know what we’re doing. Microsoft is no longer interested in buying the company, and they are discussing various other partenerships and ideas with us, and we’re listening, as we would with anyone.”
“I think it’s fair to say, as we look at this whole time span… the process started in a way that was very public.. and we weren’t sure what twists and turns it could take.” In the meantime, we’ve always had dialouge. “Our boards and our companies have always had a couple things in mind. From day one, we’ve always said we’re open to a transaction. That’s been public, and we mean it.”
So price is the issue, right? “I think that’s the most public issue.” but other issues, including regulatory and “a number of other things” and I don’t think we had enough discussions about “other things” to make me feel that we had enough things in place even if we agreed on price. Now it’s a he-said, she-said. I don’t want to get into it.
“I’m sort of mixed about what happend.. We all understood that a combination like that done, right, could have enormous power and leverage.” But stresses that there are a number of different reasons — as opposed to what Ballmer said last night.
Sue: “We never got through the price door. Once you’re through the price door” there are a number of things you talk about.
Google? Jerry sort of talking around it, says he and Sue have been tranforming company over last 9 months. “Value gap between us and the market leader” Walt challenges him to name market leader out loud, like Voldemort. Jerry: “I like Google”. Jerry talking in circles and circles. Will he ever talk about Google deal? OK – acknowledges old news – that they’ve “conducted a test”. “We are a very uniquely positioned company” and we could have a “very unique relationship.”… “I’m going to get to it, in a roundabout way.” No, apparently, he’s not.
Walt points out that MSFT described Google as a potential Monopoly last night. Jerry talking very very obliquely about search, and growth. Nada re: specifics. Search still early in game. “We’re just starting to innovate” putting in scale, ability to innovate.
Walt points out that people fleeing Yahoo in droves, so who’s left to do that innovation? “Word is you’ve been losing some of those people” (understatement).
Sue: “We’ve had turnover over the years… our turnover rate really hasn’t changed over this process. It’s gotten a little harder to hire.” Hired over 600 people during this (quarter? process?)
Jerry: “There’s a lot going on, I won’t deny that. But the perception of us being under seige, that’s just not accurate.” This is important to me: “There’s a sense that Yahoo’s getting weaker, that there’s vulnerabilities, that we can’t be independent anymore…” but the essence of Yahoo “is a lot stronger” now.
Walt: Lots of people, like me, admire your products. But I’m not sure I understand that I know what you guys think Yahoo is. Terry Semel could never answer that question. We know what GM does, what Microsoft does, what Apple does. What is the business of Yahoo? Search, IM, aggregator, etc.? What is it? Seriously, what is it?
Jerry: Semi non-answer…I think of Yahoo as we have to be incredibly relevant to consumers, and we want you to come to us first thing in the day, and multiple times a day. That’s a powerful position and one we’ve had in the past. It’s the “starting point” focus.
Sue: Home page, search, mail and mobile. That’s the core four things.
Walt: What is the home page? Yahoo.com, My.Yahoo?
Sue: Yahoo.com, if we’re interpreting what she’s saying correctly.
Jerry: Yahoo open system, Yahoo open social important. Building platform to be more open. Allowing developers to use search as a canvas, that’s important because we have 500 million people looking at us. Different from Facebook, MySpace, because we have more important assets. Think about what you can do with Yahoo mail, or Yahoo home page. Conceptually same as what other people doing, but the opportunity to work on the Yahoo canvas is so much more rich and powerful.
Sue: Repeats what Jerry says, but says “social graph” and “social connectivity”.
Walt: You’ve tried all sorts of social stuff. None of it worked.
Sue: What we’re trying to do is to use all the social connections you already have via our products, and we can ignite those connections when you show up, and surface that immediately, that’s important.
Here comes Kara, via video: She looks evil and ominous in aviator glasses. She calls out Jerry and demands that he have lunch with her. Hohoho. Time for real question:
Kara: You were there for a lot of the decline. Why are you the leaders? Why should you have this office?
Sue: “We’ve both been here in various roles over the years… I think as a company we have made a few mistakes. I think Jerry and I are excited to try to address them.” We’ve gotten away from core ecosystem: User, advertiser, publisher.
Jerry: I haven’t gotten any calls to run GM. But “I do think I’m the best person to run Yahoo. Not only because I bleed purple, and bleed Yahoo.” But also because I understand the problems. I don’t have all the experience… but I also feel that it’s my time to take that to the next level. I feel like I am most passionate, and am the most vissionary about where we want to be. People are short-term oriented, but we have a long term goal.
Walt: Do you think your users or investors get that?
Jerry: “We need to make adjustements in order to make this happen.” We’ve said that this period (since I came on) wouldn’t see instant results. Some harversting but not overnight. Financial results will follow if and win we can transform user experience. We’re doing fundamentally important stuff, that people aren’t paying attention to because of the “other stuff.”
Walt: How is that going to appease shareholders who want to sell for $33?
Jerry: I’m sympathetic to those feelings. But at the same time “We did not walk away from that proposal. Microsoft did. I’ve always said that we’re willing to do the deal at the right terms… It wasn’t clear to me that they wanted to finish the deal…It is not something that I can go and take or not take…I understand our obligations to our stockholders. Believe me.” But focus for us is long-term. We’re not going to go do something that forgoes out long-term prospects for short-term gain.
Sue: We think our inventory is undervalued. By a lot. We’ve already said that about search. We know how much value there is there. We also know that 90% of Web activity is not search, and we’re really good at that. There’s probably a 10 to 100x pricing difference between display and search, because of the friction. So our inventory very valuable. Right now our scale is working against us. We’re trying to get it to work for us.
See Also: Ballmer: “We’re Not Rebidding For Yahoo”
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