p. JB "This is not a sprint, it is a marathon" "You knew something unique and you missed it?
p. Recovery 2.0 at 6:00 pm. in the Olympic Room.
h2. A Conversation with Terry Semel
* JB: It's been four years since you took over the helm at Yahoo!, it's a very different place now. So why did you take the job back then?
* TS: I always felt the advertising business had not yet begun. I felt it was the perfect time. I saw great possibilities but I have to admit that things have moved faster than I expected.
* JB: NYT: All this hollywood frenzy skirts a question, is Terry Semel trying to turn Yahoo! into the interactive studio of the future?
* TS: To be a media company, technology is in the core of it. Technology will create the opportunities an dsituations. It goes to content, it goes to operations, it goes to distribution. "I see us as a 21st century technology company that drives great media."
* JB: That the mainstream media seem scared of Yahoo! moving into their space. How do you respond to their concerns?
* TS: I do care. It's all content. Three ways of Yahoo generating content: first user generated content, everything in and around a community.
Enable people to participate in user generated content. On the other hand, license and aggregate and work with partners
and have other people look to us as a distribution partner. Thirdly to design the future, lay the groundwork for what
things will look like in an interactive future, IPTV. Give everyone the ability to share, to monetize it, to distribute,
to show the way. To take a leadership position.
* JB: that Barry Diller answered much the same way as Terry today. Do you view him as a competitor?
* TS: we will probably compete, in travel, we view user generated content as the best content for travel.
* JB: What is Yahoo!? You're doing many things. Reference the recent China jailing of a journalist.
* TS: 99% of what we do in news is to aggregate other people's news.
Want to bring Yahoo! into other areas. Keven Sites is one example of where we want to go.
Re: China, I don't think there is an international company, even news, that publishes in China that doesn't
observe the laws of China. "Unfortunately there are laws in many countries throughout the world".
When you are operating on a global basis...you face the following issue, if you're going to operate in
certain countries, these are the laws of those countries, [regardless of whether you think they are right or wrong]
Sometimes on a personal level I wince, but those are the laws of those countries.
* JB: Is there a dialoge you can have? Can you protest? Or is that impolit? Companies often lobby against laws they don't like?
* TS: that part of our role is to introduce western ways, western media into these countries, slowly,
Being there is more important. Once you go home, you go home.
* JB: Google. What do you make of Google's strategy?
* TS: I think Google have done a great job in search. Probably the difference would be that they were the pioneer,
but Yahoo is now in search. Others are coming to search. I think that is healthy. wheneger you only have one
service out there it's a disservice to the user experience.
What search didn't enable them to have was some of the pillars of Yahoo like community, personalization,
to accomplish that they say we need other things. That they're looking more and more like a portal.
As a portal they would probably be rated number four. News is small compared to Yahoo or MSN.
Photos is small, Shopping is small. Mail is good, but WSJ said Yahoo was better. Yahoo's mail audience is
millions larger than Gmail. Many of their services remain in beta and don't seem to have a real plan.
* JB Comparing the Yahoo and Google market caps.
* TS: communications products and content, each 40% of pageviews, yahoo is strong in both communications
products and content. Google has figured out how to monetize the 5% of pageviews and generate 40% of the
revenue. We (yahoo) are figuring out how to monetize the other 80% of the segments, there are further
opportunities for monetization, I have no doubt about it.
* JB: One of the rumours about Google is that they will get into jobs, one of the things they might do
Will you give a feed of jobs to Google for their jobs.google.com service?
TS: "We'll always be more open than they are." Yahoo more and more sees itself as an open platform.
"We think the big change is not just getting more and more unique users to things [...] as we go forward
it's all about one thing, deeper engagement."
Make a more valuable experience for users and our advertisers.
* Audience (Dare Obasanjo): What do you think is Yahoo!'s biggest strength going up against Google, and
what is their biggest weakness?
* TS: Don't normally talk about analyzing other peopls' weakness. Our strength is a more diversified
model. Do I think search is the most important thing? Absolutely not. Is it a means of getting to
a richer experience, definitely. Many of the things we're doing have huge upside. Advertisers are spending
a tiny piece of what they have to spend and could spend much more online. Companies like Yahoo, MSN
are more diversified to take advantages of user generated content. I can't judge it today, I just
think that being not positioned in these ares going forward is a weakness.
* Eric Shawn: How importan is user generated content as a priority for you? Do you think you'll be
making more money off user generated content or traditionally generated content.
* TS: It's very important to use. Encourage to open up Yahoo to enable people to do things like
flickr and let people do what they want to with the content. Wehn we go acrsoo the board
it'll be a gigantic piece of what we do and our ability to monetize.
Content in general is going to get more and more important on the internet. All these new devices,
broadband, wireless, IPTV, demand more content. I don't think old media will be where people
spend their time on the Internet. As to which will be more important, to our users, and to advertising,
two or three years ago people would say to me of branded advertsing and sponsored search, which is
more important. I answer now as I did then: why do I have to decide, why can't we offer people
both. And if one takes off and becomes twice as big, great. I see content the same way,
we are totally committed to three forms of content and to let our users choose what they want.
p. A note here from epc: network is practically saturated, compared to yesterday, really poor performance.
p. Next session is a recap of sponsors and the launchpad companies.
h2. Tim O'Reilly, Mitchell Baker, Jonathan Schwartz
p. What is the relationship of open source to web 2.0? Can open-source remain open?
p. Tim O'Reilly (TO), Michell Baker (MB), Jonathan Schwartz (JS)
* TO: that many of the killer apps are all based on open source
* TO: How was open source one of the rivers that lead into Web 2.0?
* TO: a lot of people would say Sun was late to the open source party, others will say you're kidding, sun was there
first. That you have a fresh approach to open source. Can you talk about how you think about open source and how
it plays into your strategy
* JS: You have to think about open source in two respects. One of the ways you have to think about it
is in the distribution of intellectual property. What matters more in the world, the price of the software.
Free software has massive power. Google has power because their service is free, not because they use any one
technology. If you focus on the code you miss the revolution that has taken place in the provision of free
services. Some are software like Firefox, others are services like products like Google. Source code has no
value in and of itself.
* TO: how does that play into Sun's Strategy
* JS: we have to combine the delivery of code with the price tag people want
* TO: that sun sells hardware
* JS: retorts that people buy sun hardware because they like Solaris
* Back and forth over whether people buy or build their own computers
* TO: it seems to me you have a strategy you have expressed in the past, a buck a CPU hour, how's it going?
* JS: there's a distribution of people where paying for computing services makes sense to them. Our mistake
was assuming that specialized grid work was the market. Our next move is to make a retail service. No
500 page contract, just how do we get our work into the grid? The majority of the market is going to be
people who want to get access to a ton of CPUs quickly. Not custom grids.
* TO: how does the revenue from that stack up to your traditional sources? Does the new form of monetization
support the old company or does it require a new company?
* JS: the monetization opportunities will surpass the margin in profit opportunities in traditional sales
methods of hardware.
* MB: the cost of control structures is very high. What are the actual savings with self-service at an
infrastructure level. We have this existing infrastructure which is all about enforcing control, we are
beginning to see how expensive all this _control_ is.
* TO: one of the benefits to open source is that it lowers the cost of entry, it lowers the friction.
How does the locus of innovation play into your (MB) thinking with Firefox?
* MB: what we are seeing now is the combination of open, free, available and the ability to look or change and try things out is a phenomenal driver of innovation.
It's easy to try things out, you can try things out quickly and see what works. We have a whole community of user generated data, in your meme, the effect of the platform is to open up those possibilities and allow users to try that.
* TO: You have a trump card that Netscape didn't have in that users can change the browsre
* MB: the trump card is the power of the web and the set of things people can do with it. Yes people can change the browser, but the average user won't try that.
* TO: coming back to extensibility, specifically greasemonkey. Greasemonkey brings up the issue of who is in charge of user experience?
With Greasemonkey the site is no longer in charge of UX, the user is. Do you see that taking hold?
* MB: I see it partly taking hold [for early adopters] but the average consumer doesn't know the difference between the browser, the internet, and the search box.
For the average consumer to take advantage of something like greasemonkey is unlikely since it will be even more confusing
to the UX. We want to encourage GreaseMonkey and get the gem of it into the base. Mkae it comfortable enough that
the average user likes it and can use it. Part will make it into the core,
* TO: To JS about the announcement with Google. Indications of serious cooperation but unclear what was really announced?
* JS: My guess is people expected us to announce an AJAX office sweet, it's not clear the world wants one.
The power of open source isn't code, the power is in building the community. Firefox is successful due to the Firefox
community, not due the source tree. That the power is in the distribution of the product.
* JS: First thing we announced is that we are working together. We are going to combine our distribution efforts.
Java persists on the desktop, unlike Flash. Google will assist in distributing OpenOffice. That there's a lot that
can be done by combining distribution and technology.
* MB: A well distributed lousy product is not enough. The code, or the product, the UX, the quality of what you're
distributing is important.
* JS: references the YankeesNet vs Cablevision controversy as a counter that the power is in distribution. [this is a
canard since Yankees went from free OTA to their own commercial service and then expected the cable co's to distribute
in the base cable plan, and not as an add-on]
* TO: coming back to the browser wars. Do we face a return to that? If so, is that a real road block?
* MB: in the 90s we had two problems, we had the NSCP vs MSFT, then the NSCP demise and stagnation.
* MB: In our thinking we will do everything we can to avoid that . We spend an enormous amount of time thinking about
if we add a new feature or capability, what is the natural fallback or degradation that a non-Firefox user will get.
That content sites are not going to adopt features which break other browsers.
* TO: Jonathan you mentioned your blog, you're probably the most senior executive blogger on the net.
What is your thinking of it?
* JS: takes a lot less time than 1 on 1 interviews
* TO: so you're disintermediating the press then?
* JS: (laughts) I would never do that. There is incredible power in community. Developers don't buy things, they join things. Communication is a critical element of creating community. For JS transparency is a competitive weapon.
* TO: are you always transparent on your blog or do you use it to mislead or provoke?
* JS: certainly to provoke, but never un-authentic.
* TO: that he's careful on what he talks about
* JS: he is careful with what he says, he is after all an executive officer of Sun.
* TO: do they [sun legal] read your blog before you post it?
* JS: no, though they'd like to.
* JS: it goes abck to there's a transformation occuring on the web today. i love the concept of Web 2.0. There's competition in the browser marketplace now. Does choice degrade the unix experience? Doesn't it create innovation or opportunity?
TO: A bunch of the Firefox developers work for Google, has that change their relationship to Firefox in any way?
MB: the developers have always worked for a number of companies, Google gets the most press. The developers are
focussed on maintaining their role in the core, and google has been an excellent partner in that.
They have access to information from within google, so that informs some of their inputs to the core.
TO: doesn't google have an information firewall
MB: if it's in the browser there's no block. You can do extensions and we'll see it when you post it, but if it's
in the browser it's to be public
* TO: all successful open source projects have this core and extension notion
* MB: it's much easier to get engineering information flowing back and forth,
* Dare Obasanjo: to MB, is there any thinking on the side of Firefox developers about making sure, ensuring that
if similar developments show up in MSIE 8,9,10 that they'll show up in Firefox (in reference to XMLHTTPRequest).
* MB: Will we blindly do what MSIE does? no There are some paths which we won't follow. And to just follow
what odd things might happen is a mistake. Some level of feature compatibility is important and we'll continue
to look at that.
* Dare Obasanjo to JS: you dismissed the idea of a web based office suite, why?
* JS: I don't dismiss it, but no one is going to reimplement GIMP or Photoshop in AJAX. There are other
applications which are well done in AJAX. Not sure what problem it solves? Certainly there's a set of
applications that can be implemented in AJAX, but not all of them. But there are problems, like network
disconnect. There is no single hammer or nails.
* TO: some interesting analogies between Netscape and OpenOffice in that both were proprietary and are now open source,
is there any lessons you have learned from Netscaep at Sun?
* JS: everything Sun does will be open sourced, we may have to do different licenses. There is no downside
to open source, there is no downside to free (that he can see). There is immense value reaching the broadest
market in the world.
* JS: A good thing is to learn you're not the one in control in these open source projects, innovation happens
in these discussions, even conflicts
* audience: everyone is saying give up contorl, give it up for free, but how do you make that sustainable?
* JS: that the first wave of the internet was you're going to pay me for my IP before I give it to you.
Are you going to make money just on the service or are you going to figure out how to monetize after you've
distributed the technology or service?
* TO: Are the revenue opportunities equally accessible to all companies in this new world? What is the transition path for "old" companies to the "new model"? Do you have some pain ahead of you?
* JS: Do you think the past four years have been a walk in the park? Content will still be immensely valueable. The traditonal software marketplace will merge with the media marketplace.
For someone who is trying to monetize the sale of technology exclusively and you don't have intellectual property you're going to be in a world of pain.
If you have unique IP and unique value there's a market, but if you're distributing products on other's IP you won't succeed.
* MB: Seems unreasonable that technology would change but the rest of the market would not.
* JS: you're not a commercial player? but you're incorporated for a reason
* MB: non-profit and taxable subsidiary. The subsidiary exists to do certain taxable transactions that the non-profit
* JS: that the opportunities are economic
* MB: but we're not interested in a profit motive
h2. High Order Bit: Mary Meeker
* her presentation is online so i'm not going to write up everything
* paypal has more customers than american express
* that we're at 25-30% penetration of broadband in the , you're in the sweet spot to take advantage
* 23% of internet users are in the US, down from 60% when NSCP went public in 1995
* the U.S. not leading in mobile-broadband usage
* less than 15% of Skype revenue from the U.S.
* that U.S. technology companies are buying leadership in foreign markets with the intent, at least partially, to bring that leadership back to the U.S.
* that the ringtone market shows people will pay for content
* 44% and rising of all time on the internet in the US is spent on communications (email, IM, voice). Voice small but growing rapidly
* looking for the next generation communications hubs
* new form of client/server computing called mobile-PC (your mobile, your home PC).
* is there a difference in the future between advertising, marketing, selling -evolve to SFO
* Google and Yahoo! received 54% of all online ad revenue in 2004-2005
* great content, low cost ($0.99/track), high volume == high revenues
* reference NYT piece today: "Online Pioneer Sets Out to Shake Up TV ":http://www.nytimes.com/2005/10/06/technology/06bright.html
* opportunities / dislocations will be significant, 1995-2005 was just the beginning
Posted in Conference Notes