An Interview with Yahoo CEO Carol Bartz

In a CNET Conversation, Yahoo's CEO, Carol Bartz, talks about her plans to partner with winners, get serious about content, and why she cares more about the world outside of Silicon Valley.

CNET CONVERSATIONS Molly Wood: Hi everyone I am Molly Wood welcome to another edition of CNET Conversations. I am very excited to be joined by Tom Krazit Staff Writer at CNET News and by the CEO of Yahoo! Carol Bartz, thank you so much for joining us today. Carol Bartz: I am pleased to be here Molly Wood: And lets start right in actually I want to talk a little bit about your content strategies some of your recent moves obviously the Facebook partnerships associated content. The Huffington Post what can you broadly just to start of tell us about you content plans? Carol Bartz: Well Yahoo! is a place where people come to find out what's going on in the world, what's going on with their friends like Facebook and so forth. So content is really important, we have a three-legged strategy one is our own editorial voice which is about 10% of our voice and then of course content we license like through Reuters and AP, and now crowd sourcing content, like with Associated. Because folks are right there in their hometowns and where things are going on and there is something like 3,50,000 writers with Associated of that, you know, third leg. So we think we can sort of cover the entire map of what people are interested in. Tom Krazit: So where does a place like the Huffington Post fit in to that if I can try to pin it down a little bit on some of the comments that Arianna Huffington made earlier this week regarding the deep partnership that your two companies are, are about to be engaged in or are currently engaged in, so could you explain a little bit about what is going on there? Carol Bartz: Well. HuffPo is a great partner of ours sort of content for traffic so-- Tom Krazit: What do you mean by that? Carol Bartz: Content for traffic means we get to source there, great content they are writers and for that they get traffic back from Yahoo! In fact, I think we're probably their biggest source of traffic to their site. So its mutually good for both of our users and advertisers on both sites. So it's, it kind of takes away this problem that publications have which is you know I am doing all the work and you are getting all the advertising money or the glory. This is, we are both sharing in it so Huffington is a great example to that. Tom Krazit: Well how would you expect to see that within your site though, would their articles appear within Yahoo! News for example? Carol Bartz: Yeah they do now. Tom Krazit: Okay. Carol Bartz: They do now. Molly Wood: So is there any possibility that you would buy the Huffington Post that's obviously been a hot rumor this week, and I, I have to ask you. Carol Bartz: You know what wonderful rumors fly around in this - in this small place but first of all we wouldn't comment, but you know we - we already have a great relationship. Molly Wood: So speaking of that content strategy how that seems to be something that a lot of people are perusing CNN just announced a big content network AOL obviously is now looking at USA content competitor, and there are reports that people are spending less time on Yahoo! specifically how are you going to make yourself into this kind of biggest, baddish content provider? Carol Bartz: Well we still at least for a while are the biggest site as far user engagement on the Internet. So there definitely other big three's, so also Google and Facebook and we all do very different things. We really are rich and broad in content news, finance, sports, entertainment, health, and of course we know what Google is, we know what Facebook is. So I think there is we have 78% of the U.S. Internet population comes for a site. So its not much to worry about as long as we keep really great information on our sites people are looking for, personalization so we not wasting any of your pixels especially if your on a mobile device and a place to follow you family and friends, so that's what Yahoo! is about. Tom Krazit: In, in light of that with the Associated Content deal. I mean how is that something that's going to increase user engagement I mean you think of Associated content and some other types of content that they produce and I couldn't help to think of a conversation I think you had at last year's annual meeting on investor day with one of your invertors you was either annoyed or frustrated at some of the stories that were appearing on the Yahoo! home page, and you sympathized with that person, saying yeah I wish we could sometimes surface better things on the home page. And then you go out and you have you know content from places like Associated content and Huffington Post, does that fit into that sort of strategy of improving engagement. Carol Bartz: Yeah that's a very nice question because -- I have a lot to report since last year. Last year we served up basically the same home page to everyone, this year in the last couple of months we are serving up in the U.S. alone a million different version of the home page. Because we know what, we know for instance you don't click on Britney Spears actually you do, but I don't. Tom Krazit: You had not yet. Carol Bartz: There you go. So its about its about, its about engaging and letting machine learning do personalization, now back to your question about you know 350,000 writers something is going to be there that somebody doesn't want to see. We actually did test in I think it was Detroit and Cleveland for a couple months where we ran Associated content and engagement went up because it was more local, more relevant and, and interesting form of news. So as long as we have a lot of great technical filters and so forth. So we have more technology to make sure we are serving up the kind of articles people want to see. Tom Krazit: We were sort of wondering if that was an SEO play you know where you have this type of content that you can get that will be discoverable in search engines and, therefore bring more people in that way as opposed to necessarily do the home page or mails. Carol Bartz: Its both it's actually both because it is a long tale of content. I mean that's the beauty its, its not the oil spill that is on everybody's front page. Its perhaps how the oil spill is effecting you know fishermen in Biloxi or something that's much more relevant more personal and it goes just goes on from there. Molly Wood: And so who do you see as your content competition is that someone like eHow that has that obviously long-tailed giant, various searchable index or is it CNN, is it AOL? Carol Bartz: Well, our content competitors tend to be the very unique sites, like in ESPN or CCN. Although we, we lead in all these areas, for instance this is one of my favorite ones. OMG is our celebrity-entertainment site, we have twice the traffic as TMZ but everybody thinks it's the opposite. I mean we just have great scale and great technology that allows us to make sure the content stays fresh, that the ads are more personalized so they're enjoyable, not annoying. That's all important when you, when you come on to a page. Tom Krazit: I want to ask you about Facebook. You know, you've announced several, you know, partnerships and content deals with them I mean that's obviously a different kind of content that you are coming to you know Yahoo! or Facebook to see it's stuff that's produced by your friends or your family or whoever so how much further do you see this partnership going with Facebook? Carol Bartz: Well actually it is much more then that. We certainly want our users to be able to source there Facebook friends write inside there mail sessions on the home page ultimately in Messenger, that sort of thing. But we also what them to refer Yahoo! content back into their social network so Yahoo! content will spread into you know that weave of the social graph that Facebook has. It is very beneficiary not only to our users, but to their friends and their friends and so forth. So our content will move out over the web. Tom Krazit: Are these, are these partnership deals an admission that your homegrown social strategies have failed? Carol Bartz: Well sure if you want to go that broad I mean, social all of sudden social has only one definition, that's called Facebook. You know there is a lot of ways people socially interact, they interact through our groups property, our answers property, mail, messenger, there's a lot of ways people engage socially on and offline and Facebook is one of those ways and they are obviously you know have one part of it nailed down so that's why we are partnering, I mean we are not silly about it. Molly Wood: Are you concerned about Facebook's privacy foibles obviously some of your users might feel exposed and I know that you know obviously you just announced a new privacy page on Pulse and the flicker connecting was full of reassurances that it would only be for public feeds. But do you think your users are going to feel comfortable. Carol Bartz: Well we feel quite fortunate we are actually in a recent study the most trusted technical brand on the web and actually we must trust a technical brand period. So we feel really good about that. Yahoo! has taken privacy very seriously for a longtime. We've also now only privacy but we also take very seriously the neighborhood so making sure we really can watch what's coming on to the page and cut spam and phishing and nudity and all those things that people just keep shoveling at you. So we have a lot of technology that does that we have a lot of people watching that technology and we work really, really hard on having our privacy polices be extremely simple because its important to people. Molly Wood: It yeah definitely and what is your personal approach to privacy certainly marks - seems to have a strongly held belief that the more information out there the better about people do you agree with that? Carol Bartz: I think it that's a totally personal issue, some people really like to be right out there I don't, I don't think it has anything to do with what I think, its that every person gets to have a choice and it should be very clear to them how to dive in those choices. Tom Krazit: Well that's kind of exactly the opposite of how Facebook is operated over the last six months. Carol Bartz: People, yeah but that's not. I'm not here to say they have or haven't. I mean, I mean I would admit a lot of their polices of pretty confusing. But I think they will learn, they are a young company they are going to learn from this. Tom Krazit: In terms of partnerships and things like that, that we have been talking about a little bit, I would like to hear more about how you and your team decide the whole build versus buy versus partner decision like how do you strategically how do you think about that? Carol Bartz: Well actually build versus buy is, is pretty straight forward that somebody else have great technology or great content or great audience, are there special people in that company that we would love to have to join Yahoo! network of employees and/or do we have a slightly different idea that we could do fast enough I mean its actually not all that complicated and a lot of times it really does revolve around attracting the talent in. Molly Wood: So we asked our users what questions they might want to ask you and their questions ranged from you know common spam in Yahoo! Answers to Stock quotes in Yahoo! Finance to Yahoo! Travel and one person said you know Yahoo Personals, yeah it was really, and so it was really all over the place and it made me wonder when you look at that long list of properties what are, say the top two or three that you think of the most crucial to your brand and your business? Carol Bartz: Well the most crucial is the home page that comes products mail, we are the largest mail internet system in the world, we take that very seriously. Finances you know I think a lot of people would go crazy if Yahoo! Finance wasn't around. And our search results page, I mean we are doing a lot of work on that and then you can like drop your children I mean then we got news and we have sports we just announced this partnership with David Beckham and for soccer and talked about entertainment that's what happens. We have such great coverage on you know people want to be informed, they what to be entertained they want to be educated, they want to communicate and that's what Yahoo! really is all about and so we have to be good we what to have that breath. Molly Wood: So the breath is do you think the breath is more important then focus. I think that has been that you know the question that naturally leaves out of that is do you need to pick something and focus on it or is it okay to be everywhere or everything that is? Carol Bartz: Well the good news is we are big enough that we can have enough people focusing on each area. When you are a smaller company indeed you need to focus, you need to be just sports related or -- finance is a little hard to get into as a small company because of the feeds and that sort of thing, but of course are you focused on women of childbearing age and, and things that they might be interested in. But we are a large company and we have 15 years of experience in the Internet time, you know that's really useful. Molly Wood: And this is, I'll admit, this is a question that we have asked ourselves here at CNET. But do you consider yourself as a tech company or a media company? Carol Bartz: You know I still after 18 months in the job I am fascinated by why that is such an interesting question. We are a media company powered by amazing technology. I mean we serve up ten billion ads a day. Ten billion ads a day on the fly and to do that you have to amazing technology to be able to do machine learning and literally every five minutes 32 thousand different home pages serve up. That's a lot of technology so -- Molly Wood: So do you think it's a weird Silicon Valley kind of obsession that were - you know because there is a focus on innovation when you talked of Silicon Valley media certainly and may be that's where it's coming from? Tom Krazit: I mean the question is, are you a tech company that makes tech products and services versus -- Carol Bartz: Of course not. Tom Krazit: Verses media company that uses technology to power. Well but with mail with messenger those are -- Carol Bartz: But think about what is eBay, is it an auction company or tech company, is Amazon book company or tech company? Is Apple a phone company or I mean everybody wants these sort of simplistic little boxes to put people in and so I put our technology up against anybody's technology. Tom Krazit: I think a lot of the reason that question often comes up to is because Yahoo! over the past 15 years has vacillated one way or another towards what they think is going to be the focus of the company in any given time, search was the priority at one point, then content became the priority, then search became the priority again and then under you it seems like things are shifting back more towards the content side. So I think we sort of wonder you know among our audience and among the people we talked to is, you know, are use searching for relevance beyond this little 100 square mile area that we call Silicon Valley? Carol Bartz: Actually what's interesting is we have amazing relevance. I mean you I don't walk though an airport line or passport line or something and you know I am Yahoo! I mean it is if you get outside the boundary of sort of New York especially when all the Microsoft stuff is going on in Silicon Valley people are not confused about why Yahoo! is and don't spend this time pondering. Oh! My gosh I don't know should I go to Yahoo! site wondering what they are. They know exactly they know exactly that's where they go to find out what's happening. So Silicon valley I've been here almost 30 years, it's a fantastic place and it always will be, it loves the shining new penny, but its also anchored by important companies like Yahoo! and Cisco and Intel and HP and Google and Apple and so on and so forth, we are one of those. Molly Wood: One of the things that seems to be happening lately in some ways you are getting battered possibly by that sort of silicon valley attitude that there has to be constant innovation and constant technological you know wily gizmos. So what, what's going right, what's happening in Yahoo! right now that right? Carol Bartz: Well first of all I don't really think we are getting battered by that. I, I mean to the extent that people think innovation is handset or something but you know I can sit down 10 minutes with someone and convince them we have a lot of innovation you don't do what we are doing without innovation. So I don't spend a whole lot of time worrying about that. What Yahoo! is doing right is that 600 million people are coming to us every month communicating, learning there is a lot right about that there is no other company that can say that. Tom Krazit: Why have investors not responded then, I mean they don't see you as a growth company. Molly Wood: I think investors will I mean if you look at this is one of the most interesting things that I'm trying to explain to people. Jobs went back to Apple in '97, he had flat market cap till 2005 basically those eight years flat and then just go look at the charts. And that he came back to the company he knew well. So you are not going to unless, unless you are in some kind of wild market because lets face it the last 18 months we arguably had one of the most amazing financial times, everybody agrees to that. So people are vary anywhere so, A, companies need time and B it's a tough time. So I don't worry about that either. You don't wake up every morning and say, "I think I going to be graded today exactly I want the stock prices," it just can't work that way. That's now actually in the best interest of the shareholders. Molly Wood: Those are part of your strategy because in all of my dealings with Yahoo! I have definitely noticed one resounding theme and theme is we are huge and we have a ton of traffic and we have a ton of users and there is now question about that, but it doesn't seem to have translated into dominance is it part of your goal to sort of rethink how you use those users. Carol Bartz: Well I beg to differ. First of all we talk about science, art and scale. Scale is just one of the things we talked about, art is how people paint the canvas. So if you talk about brand advertising, promotional advertising, Yahoo! nobody should use that dominant word but Yahoo! is the leader. We are the definitely the leader and you could as any CMO out there they will tell you that. We are not a leader in search, we have 18 in fact we gained this month, the accounts score just come out we gained 60 basis points. But its half our business it's really an important part of our business. So I think and then we add science to it which again it's little too much to explain in just in a few minutes but its really is how do you target, how do you monetize, how do you deliver up a very personalized experience. That's a lot of technology and small companies aren't equipped to handle it like we are. We just got the award by the way for that least spam in mail of anybody Google, Hotmail anybody. I mean that's there is a lot of work, I mean something like half a trillion spams hit our email system every month. Tom Krazit: That was actually one of our reader questions was about spam and spam control and not - Molly Wood: And messaging too, people said that they were, that was their big complaint was that there were spam in message spam inbox in the messaging. Carol Bartz: Yeah I mean listen you -- Molly Wood: If you can do that -- Carol Bartz: You flaw, I mean -- Molly Wood: It's like -- Carol Bartz: Listen you are doing everything everyday, I mean you can imagine how tricky people get but we have the cleanest system out there that's, that's how bad it is. So it's like anything else if you only use one system you go home and so you know whoever that user is, we are working hard on it, always are. Molly Wood: Great I think we have time for just one more, so I will give the last question Tom? Tom Krazit: Oh sure well we have to ask you about in the 18 months you've been running company there has been a lost of turnover in the executive ranks, lot of people have decided to move on for whatever reason and so I was wondering if you could address that you know may be give us a sense of why you think that's happening and also a sense of how you attract talent to Yahoo! which you I'm sure would agree is very important towards building out a good company. Carol Bartz: Yeah actually my team is pretty new so there is not turn over, Arri you just probably left for very personal reasons not that fake personal reasons, his daughter is ill. And so you know I find this one fascinating too. First of all Yahoo! alumni are allover in the young Internet companies and that's going to continue to be because people were trained at Yahoo! Some like the old Yahoo! and want to move on, sometimes we don't like them in a new Yahoo! and we want them to move on. Sometimes people are self proclaimed executives. My favorite is I go Executive Johnny Ray Smith left today and I go, who is that guy and I go looking up. And I go, he was an executive, I mean I, I have never heard the name. So there is a lot it you know I think movement of people is good. It's good too you know if you don't feel comfortable at Yahoo! you should leave and we invite those folks in who want to be part of our team. So I don't I actually don't find any issue with that. Tom Krazit: It's a tough market out there though for you know talent in Silicon Valley when you look at companies like Google and that what they are offering and the smaller companies. Carol Bartz: Your would be amazed how many Google people we hire and there is more, there is more -- Tom Krazit: How many Yahoo! people are at Google? Carol Bartz: Yeah, same I mean it goes both ways, I mean it, you can't find we have Apple people they get Yahoo! people, we, I mean it just it just that's what the valley has always been about and I don't know why it's just so fascinating about, I mean I feel like sort of announcing every time we hire somebody from another tech company we should announce it for you could go excited about that. Molly Wood: May be you should we only have bad news. Carol Bartz: There you go so but I don't worry about that one either. Tom Krazit: Well how specifically do you attract talent though like what kind of things do you try to get across when you are out there looking for good people. Carol Bartz: Talent listen, the ability to work at a property like Yahoo! I mean our, I met with two of our PhDs yesterday one; one actually is a one of the early researchers of network effect and so forth. He was a 10-yeared professor at Colombia and he dropped the 10-year to stay at Yahoo! and he said there is a no place in the world that I could do what I am doing now except at a company like Yahoo! You know its, there is a lot of things that attract people to Yahoo! It's a wonderful brand it's a chance to hone you skills in a content area or a technical area, to be a good manager and you know we have 14,000 people so somebody is finding it fine. Molly Wood: I think that's a pretty good place to wrap, is there anything else do you want us to know about Yahoo! I want to give obviously the final word on your subject. Carol Bartz: Yeah I think what you should know about Yahoo! is we are having fun, we think we are making a difference. When we do things like Yahoo! cares and invite people into again the network effect for helping whether its Haiti, whether its just having fun like with world cup people really respond and so again perhaps outside of the cynicism of a small Valley here and I don't, to be honest I don't even think there is that much cynicism about it, all right. I really don't I think people are voting for Yahoo! and we're really good in for our self so thank you. Molly Wood: Great thank you so much for joining us and that is it for today's interview you can find the full text and of course a little analysis from Tom and myself at cnet.com/conversation and please feel free to join the conversation yourself and the comment.