Bartz: Yahoo wants to regain R-E-S-P-E-C-T

Channeling Aretha Franklin, Yahoo CEO Carol Bartz told investors and financial analysts on Wednesday that the company is working hard to regain the respect it has lost in the market.

Bartz, known for her no-nonsense demeanor and spicy vocabulary, spoke with more vehemence than usual, labeling her company's 6 percent operating margin as "pathetic" and acknowledging Yahoo "somehow got boring" and confused users, clients and analysts about its mission.

But she promised that the company is at a turning point. "Today is the beginning of a journey back to respect," Bartz said during her opening remarks, which were webcast.

"We're not here to 'wow' you today, but we're here to intrigue you and impress you and we're going to work really hard to do that," she added.

The event, scheduled to last 7 hours, will focus on highlighting what Bartz described as the company's impressive breadth, which sets it apart from competitors and will be at the core of its resurgence.

About a dozen high-ranking officials are scheduled to speak, including CTO and Executive Vice President of Products Ari Balogh and Executive Vice President of Yahoo North America Hilary Schneider.

Bartz acknowledged struggling herself with the question of what Yahoo is when she took over as CEO in January of this year, so the company went out and talked to many users in about 10 countries.

It found out its users consider Yahoo their "home on the Internet," Bartz said.

"They come home to Yahoo. They tell us that," she said.

That gives Yahoo a user base of a scale and diversity that's unparalleled, allowing it to offer advertisers not only "a safe neighborhood" for their campaigns but also increasingly refined marketing insight.

"We are the largest communications engine in the whole world," she said.

"We're not a search company. We're not a display [advertising] company. We're a broad-based Internet technology company that serves up the most interesting content on the Internet to 600 million people. That's awesome," Bartz added.

Last but not least, Yahoo is highly motivated to stage a comeback. "We have fallen and we really want to get back up," she said.

Taking the stage after Bartz, Balogh kept hammering on the main topic of Yahoo's size and breadth, rattling off statistics: every day, Yahoo serves up 4.5 billion pages and 10 billion ad impressions, he said. Yahoo Mail has more than 300 million account holders. "That's big," Balogh said.

And yet, not big enough. "As impressive as that is, we see a tremendous opportunity for deepening engagement and for continuing to grow," he said.

Although users have more options than ever in terms of Web sites, having a trusted brand becomes increasingly important, which benefits Yahoo, according to Balogh.

"As we continue to execute and capture more user engagement and ad spend, it puts us in a great position to win disproportionately in the coming quarters," he said.

Balogh repeated what has been a company line in recent months: Yahoo views social networking as a "dimension" of online services across the board, not as a "destination."

To skeptics, this mantra could sound as Yahoo's excuse for failing to have a leading social networking site, while upstarts like Facebook, MySpace, Twitter and others ran with that segment of the market in recent years.

But Yahoo is sticking with its spin. "We're still in the early stages of where social is going," Balogh said.

He also stressed the importance of mobile online services and content, and of Yahoo's homepage, whose mammoth traffic has a big impact on the traffic of Yahoo sites overall.

"Let me be really clear here, really crisp: our model is very, very simple. We have a huge audience. From that audience, we engage them with great products like Home Page, Messenger, search, mobile media, and all kinds of other media and online communications. As we engage our audiences, we gather insights about them," he said. Those insights allow Yahoo to provide better advertising services to marketers.

Bartz, Balogh and other Yahoo executives seem confident that success will not elude the company much longer. But the company's latest quarterly results don't signal that a turnaround is beginning.

Yahoo, which has been on a years-long financial and technology slump, posted revenue of US$1.58 billion in this year's third quarter, down 12 percent from the same period a year earlier, while net income rose 244 percent thanks in part to cost cutting, the company said last week.

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Juan Carlos Perez

IDG News Service
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