Carol Bartz, Yahoo's brand-new CEO, revealed her first public assessment of embattled Yahoo on Tuesday, arguing the company is stronger as a whole than as the sum of its parts.
"This is a fantastic Internet property, and it doesn't deserve everybody trying to pick it and pull it apart," Bartz said in a conference call after Yahoo reported mixed fourth-quarter results. Looking at statistics such as how many people use Yahoo, how long they stay on the site, and how they value its properties, she said, "This is not a company that needs to be pulled apart and left for the chickens."
The obvious question is what that means for the possibility of selling the search business to Microsoft, a possibility that emerged last year, though the companies couldn't agree to terms. Bartz wouldn't rule out that transaction nor declare it a great idea, but her tone left the impression she'll need more convincing.
Specifically, she said she's not going to put the interests of short-term shareholders looking for a stock pop ahead of the long-term investors who are more patient for the company to improve its operations.
"It's my job to make sure that as a company we look at anything that makes sense long-term for the company and creates shareholder value. It's very easy to have different shareholder interests. Some are short-term so they can jump out, and some (are) long term. It's our job to make sure we're looking at the bell curve of shareholder value," she said. "Everything is on the table."
She shared a smidgen of thinking about the search business specifically, though she qualified it with the comment that Yahoo would have to invest in it regardless of whether the company wanted to keep it or sell it. For one thing, it's "extremely useful" to understand users' intent through searches. For another, query growth, stemmed market share losses to Google, and faster introduction "increases the value of the product. It's good for our brand and our shareholders, no matter what our long-term plan."
Chief Financial Officer Blake Jorgensen also went into some detail about the search business.
"We're building off the road map, first with Panama (Yahoo's search ad sales system) and now with our continued innovation with Search Assist, SearchMonkey. It's helped us stabilize the share," Jorgensen said. And Yahoo's numerous and often high-traffic properties help keep search ticking, he added.
There were some encouraging statistics for Yahoo's search business. Revenue increased 11 percent globally and 18 percent in the United States, Jorgensen said. In the United States, search queries increased 10 percent compared with the year-earlier quarter. Overall, revenue per search grew in the high single digits, he said.
But not all is well. Google last week was relatively bullish about its search-ad business, reiterating its argument that the directly measurable return on advertising investments make it stronger during times of economic trouble. Jorgensen, in contrast, offered a note of caution that the economy means people aren't searching for things to buy as often. "We're tending to see cost-per-click growth, but click yields and fewer commercial queries are starting to impact revenues in general," Jorgensen said.
In defense of Yahoo
She continued with the assertive tone set in her introductory press conference just two weeks ago, coming out guns-a-blazin' as a strong Yahoo advocate, someone who's willing do what's right rather than come up with potentially damaging quick fixes.
"I didn't come here to sell the company," she asserted.
The stock market responded with a collective optimism to Bartz's debut and the financial results, pushing the stock up 59 cents, or 5 percent, to $11.93 in after-hours trading.
There was no question who's in charge of the company now. Former CEO Jerry Yang was present during the conference call, but for whatever reason didn't make so much as a peep during the question-and-answer session.
Wooing younger users
Microsoft isn't the only company Bartz is monitoring. Facebook, too, with its younger users, also is on the list. As the mother of a 20 year old, "I'm very familiar with Facebook," Bartz said.
And while it's nice to have the young users on your site, "They do grow up," Bartz said. People in their late 20s are "much more interested in Yahoo Finance. They don't have all day to put pictures up and chat because guess what, they're off the dole," she said.
And, she added, that age group is easily jaded. "Just as MySpace was hot and it moved to Facebook, who knows what's next? We have a lot going on. We're dabbling in it with Yahoo Open Strategy. I was surprised. We have a demographic that serves the entire Web. I think we can get some growth in other areas," she said, mentioning that aging baby boomers are less technically intimidated than today's senior set.
Bartz has a lot of work ahead of her and didn't pretend otherwise. Specifically, she pointed to communication problems within the company, a muddy presentation of its strategy, slow decision-making, and a lack of focus. She'll "move swiftly" to right these wrongs, she said. And of course the economy is dismal.
The sober tones seemed present more to assure the audience that she wasn't a pollyanna. Overall, it seemed outweighed by the kind of optimistic tone one might expect from a new CEO. Twice she said Yahoo's prospects look better from within the company than from the gloom-and-doom press view she got in 2008.
"If we have strong products, we will attract the audience that just beats everything," she said. "It's not just about search. It's about people coming for content and information."