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tv   Charlie Rose  PBS  March 11, 2016 12:00pm-1:01pm PST

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>> rose: welcome to the program. tonight an exclusive conversation with the c.e.o. and president of yahoo! marissa mayer. >> the big thing i'm really focused on is our end-users in terms of how do we make sure that we provide them with the best possible service, the best possible mail, the best possible news. nd there's also the shareholders that we want to generate the most possible value for. and there is a lot of great opportunities in this asset base to really unlock a lot more value. >> rose: marissa mayer for the hour next. >> funding for charlie rose is provided by the following:
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>> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications >> from our studios in new york city, this is charlie rose. >> rose: marissa mayer is here, c.e.o. and president of yahoo slm since 20126789 prior she was at google where she was one of the first 20 ploas. on taking the challenge to run yahoo! she inherited a legender iconic company in internet history. people want the company to succeed and they want her to succeed. she does not do many interviews and we're pleased to have her here to talk about the future and the past. we begin with the future as many know yahoo! became because of founder jerry yang, they own 40% of the chinese company alibaba. they sold 50% of that stake in 2012. they still own 20% of alibaba said to be valued at more than $25 billion. there was conversation of a spinoff then the board decided on a reverse spinoff which meant
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considering a sale of core operated businessed of committees selected by the bore. marissa announced a plan to return this iconic company to greatness. and that's what he with want to talk about. i am pleased to have her back on this am ra, welcome. >> thank you for having me. >> rose: very good to see you. i know you don't do this often, but we're excited to you have here. >> i'm excited to be here. >> rose: tell me how you see yahoo today and what you want to do to do what you wanted, laid out, return this iconic company to greatness. what is the plan? >> well, yahoo was the original internet icon. and something that is a huge part of people's daily lives, so half of your viewers today, more than half will use a yahoo product sometime 20ed. and-- today, and it's just an amazing opportunity to say how can we take something that was such a huge part of dale's lives in 1995, 2,000, even today and transician it as we are seeing such huge shifts in the technology industry with mobile, with video, with wearables.
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there's so many great opportunities in terms of how do we guide people. yahoo started out as verry and dave's guide to the world wide web. how can we be that guide in the modern-- and how can we be that modern version of that. we've come so far. i'm really proud of our progress but there's still a lot more to do. and on the other side we have some tremendous assets. we have a large stake that yoo yahoo japan. we also have, as you machined, the alibaba steak. and so there is quite a lot to do overall. there's the operating business of how do we provide this service to a billion users every month, everything from mail to our home page news, search, sports, finance. and how do we manage these large assets that we have in china and japan. >> so the board has decided to do what? to have conversations about spelling the core-- selling the core assets. >> obviously as you can imagine the alibaba asset has grown to be really large inside of yahoo. and one of the things we're
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looking at is how do we create the most value for shareholders. and one of the elements of that is really around how do we get alibaba into an entity by itself. because by doing that we unlock all kinds of opportunities in terms of tax efficiency, in terms of greater valuations, et cetera. and so one of the things we endeavor to do in 2015 is a forward spin, talking our alibaba stake and moving it, ultimately we decided to pause that plan and now we are looking at can we do the reverse spin or can we do a strategic alternative with the operating business. that could be a sale, it could be a merger. to ultimately basically get both the operating business of yahoo and the stake in alibaba into separate corporate entities. >> you are downsizing the core business by 42%. >> we have over the past few years. we have just become a lot more efficient overall. our services today, still see
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terrific traffic. they generate great advertising revenues but when we look at where we want to put our energy, we really want to have fewer ar rohr-- arrows, strategic pushes with more people on them. so we've really tried to krises en what is the focus of yahoo. over the years we have done so many different things from autos, to personals. today our focus is search, mail and tumblr. those are three global platforms that we run. and then in terms of vertical news, sports, finance and lifestyles. >> what will this do for you? and how will you make this successful? >> well, i think the big thing that i'm really focused on is our end-users. in terms of how do we make sure we provide them with the best possible service, the best possible mail, the best possible news. an there's also the shareholders. that we want to generate the most possible value for. there are a lot of great opportunities in this asset base to really unlock a lot more value. >> there are big five companies in yahoo used to be one of them
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but it's not in that ranking now. apple, google, amazon, facebook and microsoft where. does amazon fit because if you think of search which you listed as one, google is a huge, huge factor. where do you find a place in search? >> you look at e-mail. >> when i look at the future, search today, web search is what a lot of people think about. and web search is excellent. i'm really proud about how far the search industry has come. but when you look at how should search work on a mobile phone, i think it should be something very different than what we see today, to understand a lot more but as a person. the classic example i will use is if i type in jfk into web search, i'm probably looking for the john f kennedy wikipedia page. if i type in jfk and you can tell from my phone that i'm racing down the freeway heading towards an airport and you know from my e-mail that i have a receipt to be on a flight later that day, chances are i'm trying to find out when pie flight to jfk is, what gate it is leaving from, is it on time, et cetera.
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so there is a new form of search that is really emerging in mobile. which i refer to as personal assistant. you see some of this with google now, siri, cortana. we really think given our heritage insert there is a lot that we can do for our users, using some of their preferences, using e-mail. obviously with their permission. but to really rethink how search can and should work. >> rose: what percentage of search will that be? >> today our market share is somewhere around 10% overall. but i think that when you look at the broader world of search, mat jort of searches are going to be done from mobile phones. and the other thing we know, we have an analytic platform for mobile called fluri. the other thing we no know is 8% of time is spent in browsers. the other 82% is spent in applications. and today web search really remains condition fined to the browser. we want to look at how can we really unlock the information, data and capabilities of all those different apps to help make people's phone more ak
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be-- that is a promise 350e78 have been talking about for awhile. that search will move to apps. >> yes. >> do you see that happening. >> i do. >> with how much velocity. >> i think that will happen. people always tend to overestimate the short term and underestimate the long-term in these things. but i think that when you start to see some of the big advances we have had in voice search and image recognition, a lot of the big hard computer science problems have been solved in recent years. and when i look at the app ecosystem, the fact that we now have apps on our phone that can help you get an uber, book a restaurant, get a flight, and if i know what your preferences are in terms of what services you like to do each of those things, i can help, you know, a search assistant can help pull all of that together and make your life a lot more seemless. >> rose: when you came to yahoo! there was high expectation because of where you had come from, and the role you had played at google. do you think the expectation for you was too high? you had great ideas that you wanted to in a sense take the google experience. and you looked at yahoo.
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you knew what the future was going to be in terms of mobile. you saw that coming. you understood the possibilities of mobile ads. yahoo had been a company that had generated revenue because of ads. >> i think that the hopes were high because there's a terrific team at yahoo. there is just great people behind the products. i think you can feel it, when you use yahoo's website. there is great personality, great opportunity. i think that people love to cheer for yahoo. and when you know-- . >> rose: from the exptations for you enormously high? >> i mean i think that expectations were high because the brand is very iconic. the team there was really, really excellent. there was a lot of personality in the brand. people like to cheer for it. and i think that it's a strategy that makes sense. i think it still is a strategy that makes sense. mobile is yahoo's future. when you look at what we have been strong in, male, search, news, sports, finance, those are all the things people like to do on the phones. so there is a great opportunity for us. i mean it made a lot of progress
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over the past few years. we went from basically having almost no users on mobile to having 600 million users on mobile. having almost no revenue in terms of mobile advertising. and last year between mobile, video, native and social we had 1.6 billion of advertising, that is a business that we have grown in less than three years. >> why is there so much criticism. they look at what you have done since 20126789 and they say she came in and there was a flurry of acquisitions. and most of them didn't work. she spent some $2 billion and most of them have not worked, and they have been written off. >> well, i would say that we-- i actually think they did work. i think it really was a matter of we needed to rebuild some of the talent base. we had at the time about 50 engineers in a company of about 14,000 working on mobile. today we have more than 500 engineers working on mobile. we have one of the biggest app development shops in the world am i'm really proud of that. but we had to build that show. we built that through talent
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acquisitions so we saw the benefits of those acquisitions. because of various accounting rules, yes, we did see a write down but my view that is not because of acquisitions weren't successful. >> even with respect to tumblr. >> yes, and tumblr obviously we have fallen slightly behind where he hope to be in terms of our plans am i'm still very optimistic about tumblr it is a great plat for especially for millenial, we see the time spent there being really, really high. overall i think it's a great opportunity to take things like native advertising and mobile and tumblr is growing really nicely overall in terms of mobile daily active users. and it's really a creative expressive platform. >> look at the 3.5 years since june, july of 2012 since you have been there. and here we are, in march of 2016. when you look at what has happened, what did you do wrong? >> i think that one, i don't think the story is yet played out. i think that when we look at this, we have a new strategic
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plan for the company. and we can see the turn around. a lot of tech turn around. we do take five, six, seven years. >> it is rare once they are able to turn a tech company around, apple being one. >> i can see our strategic plan am we can see how it's really working. the 600 million mobile users, the 1.6 billion of mobile video, native and social, we like to call it mafens revenue. those are, that is the future that we built ourselves. when i came to yahoo in 2012, i came because i really wanted to work hard. i thought it was a great challenge. i sat down and met with all the different business leaders and reviews the business lines. every single one was in decline. and no one had any ideas how to turn it around. >> it was a series of c.e.o. >> i was the 7th c.e.o. in 61 months. and so they-- you know, but they were all in decline. so i came in, i thought wow, this is even harder than we thought it would be. went to the board and said okay, we have a problem because if we're going to do a turn around we have to get the business lines growing again.
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no one knows how to get these business lines growing again. yahoo had been the king of the banner ad. banner ads are still very popular and effective. >> but mobile is where the action is. >> mobile is where the action is, problematic is taking over. we had to build ourselves a new future. and we had to build it quickly enough and to a scale that actually matters to yahoo today. our mobile video, native revenue is material, overall, to the company. and we're really proud of that. we had to take it from you know a few million dollars to today, a billion dollars, one of the fastest growing business plans i have ever seen in my career. and you know, so i'm very, very proud of what we did. but we needed to decide in our turn around how did we stabilize that declining revenue. cuz there was a lot of it. 4 to 5 billion a year that is in decline. and then be able to grow fast enough to offset that. and actually show the type of growth you expect from a consumer internet. >> some people make two points. one is the expectation level and the deficit of the challenge
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that you faced. there were declining revenues. but here you see yourself in a situation in which you have activist stockholders, shareholders, making certain demands. and the board deciding to say yes, we'll consider selling these core assets. and you on the other hand trying to develop a plan to make the core assets function, pluing eliminating some businesses you weren't in, that you had found unsuccessful. >> but they're completely complimentary. because for us, at least for the shareholders the bigway to unlock value is to separate the alibaba stake. there are two ways to do that. one through a spin, spinning it separately that another public entity. >> rose: you didn't do that because-- why didn't you. >> we did do the forward spin. >> rose: because. >> because overall the market was concerned about various tax liabilities and outcomes there. now we're looking at the reverse spin. >> rose: right. >> and we're doing work on thasm but at the same time we're also looking at a sale of the core am but in effect, those two processes, looking at either a sale or a merger or different alternative in terms of the
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overall strategic outcomes for the core are the same as the reverse spin. the only difference is you end up with a public entity at the end because you 13u7b into a public company or ultimately a privately held company. i think that either of those outcomes would be really good for yahoo. you can see outcome there where we could actually become stroarng in our strategic execution. either because we get more mobile distribution or because some of the things that we need to do that are difficult in the public markets. ultimately could be done, you know, more privately or in the context of a larger company. and so overall i can see an outcome here where we can achieve the operation of the alibaba stake which is critical for unlocking value while we also get a boost to the core operating business for yahoo. >> rose: when you sold one half of your stake in 2013, 12, 13. >> uh-huh. >> rose: what happened to those revenues. >> oh, the proceeds from the sale were returned to shareholders. so today we've just over $2 billion on acquisitions, it's
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true but we have returned almost 10 billion to shareholders. so for every dollar we spenld on acquisitions we return more than $4 to shareholders. and so we've done a significant number of buy backs and returned a lot of the value to the shareholders which we think is appropriate. >> if there is a sale, do you go with the company? >> i think that the biggest piece for me is how do we take this iconic company and get it to the right place. and that is-- apart from the alibaba investment. >> i would say that is question for me is-- the primary issue is yahoo, our technology, the employees, the services, the end-users, how do we get that to the best possible place for why hoo and find it the best possible future. i'm secondary to that. >> but i do. >> you put all this time and sort of the care of these assets and redesigning these assets. i assume you would like to go where these assets are i love that. and i think the people there are terrific. i love our user base. i love the products that we get to work on. it's really, really exciting and i would love to see it through.
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but obviously we will obviously honor our commitments to our shareholders it was also said in silicon valley and a story about one of the other firms, and i assume it may be true for you. a talent flight, that you really in circumstances like there have to increase the prem yu you pay for key employees at a time like this. they are part of our future, that they are a me part of our future. and certainly right now talent is a hot issue. at every company. in silicon valley. especially for us, and certainly we have had to take some steps in terms of compensation to make sure the people understand how we valued our efforts.
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>> how difficult was it for you in the year since 2012 to get a firm position in terms of mobile ads, because your predecessors had not left you in a firm position, so you had to play catchup? >> yeah, that's right. so i-- when i came to yahoo my thesis was wrong, how do you take all the great services on desktop and bring them over to moibl. when i got to yahoo i spent the first two weeks or so every time around lunch hanging out in the cafeteria. just talking to people, talking to anyone who would talk to me. >> what did you learn. >> i finally ran into a mobile engineer and his name was tony. and i said well tony, what are you doing. he said i'm a mobile engineer. i said great, how big is our mobile team. and he said about 30 people. i was like-- i don't have a great poker face so he can just tell right away that i was really taken aback that it was only 30 people. and so he said well don't worry, there are more of us. i said how many more. he said there are more of us embedded in the team. like maybe twice that. and i was like oh, so like 60. and then i went to the-- i said
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how many jeers do we have in the company who work on mobile. and they said well like a hundred. and i said like an actual hundred or 60 rounded up to a hundred. well, like 60 rounded up to a hundred. and we needed to build competent tensees there really quickly. and we also teeded to,-- needs to, now it is obvious, from 2012 there is alot of discussion about htm l5, which platforms mattered. we made a strategic bet and it tushed out to be the right one at the time. we felt native apps were the right thing to do and we paused work on a lot of htm l5-based apps at that time. we decided android and ios were the two platforms that would be dominant. we were right. and today it is obvious, but in 2012 it wasn't obvious at all. and by placing those bets. and also, there was a terrific leader in manager in the company his name is adam cayhan who became our senior vice president of mobile and he did a brilliant
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job recruiting great mobile engineers. really you know, putting people into a place where they could do just terrific work. we were really proud. we won the apple design award for best application two years in a row. one for ya huai whether, one for yahoo news digest. we really came a long way especially considering where we came from. of course there is still more to do. we always would love to have more engagement on mobile. and that is something that we're working on. >> but that very decline. >> the decline from where we started, very low. >> rose: and the competition, and the dominance of these five huge companies. >> i would say 600 million mobile monthly users puts us in probably top five audiences globally. and the mobile advertising business that we have of more than a billion dollars is, puts us easily in the top mobile advertising companies in the world. part of the issue is growth in yahoo is we were so big to begin with. there is only three u.s.-based
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companies that have more than a billion users every month. there is only three u.s.-based companies that have had more than four billion dollars of digital advertising in the year. basically us, google and facebook. so we came from a very large position, much larger than some of our other peers and exetders. that makes it really hard to generate growth. 10 million new users is a rounding error on a billion. 10 million of aician diddal revenue on 4 billion. >> you have had that number of users for a long time. >> actually no, we reached a billion mark in i believe it was early 2014. so we have been growing. >> the last two years. >> we've been growing our users and it continued to grow. so we round to a billion but it's higher than that. >> why do you think people come to yahoo. >> i think people come to yahoo, our business is really around nfg, connecting and entertaining users. for me that search, mail and digital content. and it really is a digital network. because the three really work together. there's some people who come for mail and stay and do a search or
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read a news article. they thr are some who come for say sports. they might do a search or read some e-mail. and search is really around helping people do discovery. and in terms of the business need it is a really lucrative form of digital advertising. on mail it is really one frequent see, people come and check their mail doses of times a day. for us our news is our voice and our differ rent yaition. it allows us to personalize. it allows us to differentiate with our voice. >> some of the things you have downsized include magazines. the number of people that you brought in. to provide a kind of news face for the company. and they also raise this question, which is fundamental. they say look at these core assets. and if you take the alibaba stake house of it, their value is very limited. it's very small. >> well, i don't think their value is small. i think that the way the market is valuing them today. >> okay, fair enough. >> i will say. >> if you take off, it's
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almost-- minimum. >> we definitely think they are very undervalued and it is our job to show. >> the marketing thing that those core businesses are not worth much. >> this is part of why we're considering strategic alternatives because we actually think there is more value there that can be realized. and considering strategic alternative-- alternatives is one way to unlock that value. >> do you think you'll be running yahoo a year from now? >> i ask that people because people ask that. >> yeah, i think that again, like i would love to. i would love to be running yahoo. we have a three-year strategic plan. can i see how it will work and how we can actually get to successful turn around of yahoo. but i think that, you know, it's about our users. and it's about our employees. and you know what's happening with all of them. i certainly hope that our services are here a year from now and that they run answer better than they do today. i can see that that should easily be the outcome. and we have a treask team at yahoo. and i really hope that they are allowed to continue on to do the good work. we're going to look at all
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possible strategic alternatives. i'm confident we'll find the right one. >> i'm told and i assume this is true, you really have reached out to lots of people to ask for, you know, look at the position we're in. and what is the best way to go. you are seeking advice from across section of people in silicon valley and the financial community to say this is the challenge we have. and this is my plan. what do you think? >> yeah, we definitely have sought a lot of advice formally and informally. our situation is complicated and so it's going to take a complicated solution. >> explain to me you what mean by complicated. >> i mean i think that when you look at our business, with search male and digital content t is complicated in itself. when you also look at the stake in alibaba, the joint venture with yahoo japan, a joint venture in australia with seven media called yahoo! seven. when you look at all the different elements of our business, it is a complicated space. and when we look at how can we maximize the value that's recognized by all of those
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different pieces, it's complicated. >> rose: in order to sell off a spinoff, not a reverse spinoff, of the alibaba assets, without would have to sign on to do that? >> well, that's what we attempted to do last year. but one of the things is our basis in ali babi, the price that we bought that stake for is relatively low it was high at the time. we bought it for a billion dollars but that stake that went on, to really multiply to a tremendous return, and so you know, given that there is a large tax liability on that stake, so there is various ways to address it. obviously it's also tied very closely to the value of alibaba overall now that it is a publicly-traded company. but basically the thought is there is more tax liability introduced by spinning out alibaba than there is on the reverse spin where your tax base and the company that we built to operate yahoo is higher and therefore there is a smaller tax liability for spinning it out. >> do you feel pressure from
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stockholder act vaises. >> we certainly see their criticisms and their challenges. and my view is that i think that having lots of different view points on the issue is helpful. and we take all that input seriously. we engage with them. we engage with all of our shareholders and integrate that to the best of our ability to out ultimately find the right path forward. >> if you look back, in the last three and a half to four years, was there a big bet that you wish you had made that you didn't make? >> we made some pretty big bets. mobile was a big bet. we found 500 people. we bought probably about 40 different companies to really pop late the talent in that team. >> the 2 billion in acquisition. >> yeah. >> and we also. >> most of those companies. >> they now work on mobile. so they now are the people who build yahoo mail, finance for moibl, all of those different, all of the different mobile applications. and to me we have taken what was
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a really scattered framework of mobile applications. we at one point had 81 different application, none of which you ever heard of and today we have really about seven or eight that are very, very strong. i think the big bet on tumblr, to me, it hasn't, it may not yet be material, it's a terrific asset. it's a trerveg network. the team there working at tumblr is exceptional. we've got a great path forward in terms of what we can do. how we can help to continue to grow, that community of creators. while providing a great opportunity for brands and advertisers. >> but then why was it necessary to sort of reduce the write down some of the value of that sth. >> there is a bhol set of accounting rules. that you know come into play here. part of it is that the exotion of our market cap isn't that complicated. so when you are trying to find the market cap of our operating systems it becomes sub trackive. at some point there is only so much left. if your book value exceeds that
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market value you have to die write down which ultimately happened here. >> as i said in the introduction yahoo is a company that everybody has an a section for and wants to see succeed as they do for you because you have been a significant part of the silicon valley community for awhile. but what have you learned not about specific things but in a sense about coming into a circumstances like this. what do you wish you had known? what has been the learning experience for marissa? >> i mean i think there is, again, i think, what i think is great is i get to learn every day. and i think that you know it's been amazing. i love design and getting to work with the team at yahoo to design what our future should look like, to get the design. how the company works. it's been just an incredible experience. and i think that probably if i take one lesson away, i think pacing and time is always really important. i think there are some things that we probably did too quickly. i think there are some things that we probably did too slowly. >> and you know, not enough. but i think that you know, we, you know, learn from all that and are constantly getting
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better. >> this is-- i think when i look at the strategic plan we just rolled out, that is the culmination of a lot of that learning of saying okay, one of the things we should do is walk away from declining revenue more quickly and get more focused on areas of revenue and areas of the business that can grow really substantially to get us to return. >> and really, i think that's another big key learning is that, you know, yahoo, there are so many different things that we do work on. it's really important for us to be to kusessed on providing the best possible service to our users. it's important to be focused in terms of having a product line where we can be really excellent sh-- excellent in each of the different areas and really differentiated. and i feel really good about the strategic time we have in how to achieve that in all different areas where we are dhoosing to focus. >> you close down a lot of things that had 20 do with real state, offices an other things. and also with people. pople that you had brought in, hoping that they could create something that within a vital part of all those, what was the hardest loss for you. i mean for a long time apple,
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yahoo supported community. >> yeah. >> and you had to finally say. >> i think that along the way there were all kinds of different things that we tried. i'm proud of each of those experiments. we tried things with original content. >> we tried some things with digital magazines, we tried a lot of things with mobile. i would say when you look at the successes we had in mobile, also with nassive advertising, yahoo gemini is one of the fastest forms of advertising growing be o the web in terms of native. overall very, very proud of that. but i would say that some of the things that we learned around the digital magazines and the original content, they continue to live on. they just live on in different form. because you know, some of those types of media, when they translate online, you've got t have a lot more support in terms of the tools offered yvment is yahoo finance more-- why was it more successful than our digital magazines is because you have things like portfolios yvment is yahoo sports more successful
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than some of the digital magazines were, because you can follow teams, you can follow scors, you can putting to your fantasy foot bawl line-up. so i think that having fools is another thing that is really key to ultimately succeeding in some of these verticals. >> someone you know and i know to say what did you think of nfl streaming? >> we were really proud of the first global live stream of the nfl back in october. it was a game in london, the buffalo bills versus jacksonville jag wars. and it started bid way at like 4:30 in the morning. actually i pulled up and it was amazing because there were literally 300 cars in the parking lot at 4:306789 i got out of my car and took a picture of it. it was amazing it was a great moment for the company. you know, our goal was to try and build a record number of viewers. and we did. we saw 33 million views, more than 15 million unique viewers on that stream. all on a sunday morning which tends to be kind of a sleepy time on the internet.
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and we did it with unbelievably high def quality, very little rebufferring. really compared to a lot of the industry standards and other video streaming providers, i think we really made a case for ourselves in terms of how well we delivered overall on the quality. and it was really, you know, obviously because of our heritage in sports and particularly in, with fantasy football, et cetera, it was a really proud moment for the company to get to partner with the nfl on that. >> here is what "the new york times" said in december 2015. he said it's a far flung collection of news, entertainment and communications, destination sportded by-- built to design something noafl, at best she appears to be building a better yahoo with debatable results. what is a different company miss mayer might have built. one was to ditch the web portal and plunge into television. one transformational thing that she could have done was buy netflix said robert peck, an analyst who follows yahoo for
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sun trust robinson. was that a possibility for you. did you think about that? because when terry was there, the idea about yahoo can be a powerhouse in the ent takenment business was given a great deal of emphasis. >> yeah, i think that overall yes, there were opportunities. but at the same time, we have a huge user base. like we can't stop running their e-mails, thaish searches or providing them news. >> and you have to get better. >> and we have $4 billion worth of advertising revenue and $4 billion worth of advertising messages that we needed to get out on behalf of our advertising. and so i don't think there was really a world where we could have done a pivot and walked away from all of those things nor should we have. there might have been some things we added to it but that kind of goes back to my earlier point about focus. and distraction and saying yait, like you really kind of want to go back. i found i really wanted to find the core competent tensees within yahoo and figure out how to amplify them. >> and build on them.
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>> yeah. >> but have you, you have said that what you have done in the new plan say bold action. but some would look at what has taken place and say it is not a bold action. she is simply doing this columnist said really just making a better yahoo. that there may have been opportunities to really change yahoo and make it into a hugely successful company. in which the assets will be valued much better than they are today. and i'm asking, did you that at the time. was that a choice that was decided not to make? >> we decided to make it, buying tumblr was the large acquisition that was a big bold bet. mobile was a big bold bet. so we made some big bets. and some of those bets have paid off. some have yet to pay off. but you know, overall i really feel that i didn't want to turn our back on all of the different users and services that we already have that i think were really vital and had a lot of opportunity it would be one
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thing if we said wait, now on mobile, people are doing something that is completely different than what they had done on desktop. but if you look, yes, the tools are some what different, but it's still a lot about communication. it's still about information. still about how do you entertain yourself. and all the different things that we provided on the desk to be still have a lot of value. and in fact are still the most vehicle things people do on their phones. and so i didn't feel that we needed to necessarily change who we were and move into an entirely new area. i felt that optimizing what we had and really making it more suitable for mobile, because we all knew how big mobile could be, you know, was really probably the better path for us. so i felt and said we should make big bets in the areas that we were already strong in. >> how long do you think you had to make this plan work? >> well, it's a multiyear plan. and obviously in terms of either the reverse spin or the review of strategic alternatives, that will come to conclusion far
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before that. but i really hope we're able to see that plan through because i do think we can see how it will work and see how it can affect a turnaround at yahoo. >> you're not on the committee that's looking at new acquisitions, is there reason for that? >> sure, it's the way business is typically done. obviously for myself and filo, david filo is the founder of yahoo who is also on the board. we're considered not independent board members because we are also employees of the company and we are part of the operating business. >> so you have dual loirlts or whatever. >> that's right. typically when a company has a strategic alternative and independent committee we're obviously working closely with them and work to support them each day. >> let me go back to division 2. i mean think outloud about beyond building on the plan, what you hope and believe that yahoo can become. >> i think that yahoo can become a vital piece, a vital part of everyone's day on their phone. and i really think that we can add a lot of value, add a lot of
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whimsy. and just a lot of utility to things people do every day and trying to make people's lives easier. and try and help them. someone once said to me yahoo is, i can turn to yahoo for everything i need to know. and a few things i didn't know i want to know. there is a wonderful element of certificate endippity in it. and i think that you know, obviously there is just so much information out there, so many different things that you can do. but i really hope that we can continue in mobile to be that guide that we have always been to guide people to the information they need and also to guide them to a few serendipitous pieces of information or things to do that they maybe wouldn't have thought of. >> is your biggest challenge right now, and you are here in this interview and you don't do many of these, is to convince not only your employees who i assume bleed with you, but convince the investment community and convince the
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people that this is a plan that will work and will work and it will have the power of reducing, of changing the attitude that the investment community has about these assets? >> i think when the business really starts to grow, that type of change in the investment community will happen. so the biggest challenge that we see is around mobile engagement. we have 600 million users. how do we get those 600 month not to be monthly users but how do we get them coming every day. how do we build products that they need to have every day. >> how do you do that. >> we're looking at that and how do we invest in mail and communications. communications is the biggest driver of frequent see of use of anything. if you think about how many times a day you check your e-mail on your phone or text someone or message someone. it is a great opportunity around communications. but also how do we make our applications the best they can-- the best applications for news, for search, for sports and finance and lifestyles. and we're working really hard on
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all of those areas because we think that by creating great tools that can be used on the phone and putting them together in the right way, you can ultimately really build a user base that comes much more frequently and finds a lot more utility and value in the application. we already are really highly valued and used but we want to increase that frequent see. >> and be reflected in the investment community. >> uh-huh. >> when you look at the companies that you dpeet with today, when you look at users, and you look at the success of facebook with respect to google, with respect to advertising on mobile, do you see that leveling off. or do you see that growing? >> i think that mobile is going to continue to grow. >> mobile advertising. >> mobile advertising is going to continue to grow. >> has there been any one of the things you see. search continues to be lucrative, maybe slightly less lucrative when you move to mobile but there are so plane new fore mats of advertising there is nationallive advertising there is quick to
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install ads where people are working on getting their apps installed. on phones. there are so many different fore mats and types of advertising. so many different pricing models. we're really in the early days in my view of mobile advertising. what is the best way to put a message out and also for those advertisers, what is the right product, how do you want to fore mat that product to sell it to them. and ultimately help their messages be received the most effectively as possible. >> it was clear to see where mobile was coming. it was clear to see where the cloud was impacted. when you took over in 2012. in 2016 what is clear in terms of your vision of the future. >> well, i any one of the most interesting things that we've seen, coming on is video. i think now when you start to look at something that is happening in mobile video, the cross products that we will think a lot about mobile, video and social. but video watching, on phones, is just an unbelievable level. i think that last year people
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thought more people watched. there was more video watch on mobile devices than there was on desktop. >> wow. >> which is like already just incredible to think about. >> they watch it wherever they are. >> i don't know. i watch the television show on my phone last night on the treadmill at the gym, right. and then between phones and tablets, people are watching an incredible amount of video. we were really excited to participate in that with the nfl. it nicely ties together yahoo sports and this mobile video element. one of the big things we needed to do for streaming that game was make sure it worked on every platd form from exks borks to phones android, ios, all the different fore mats but i think that mobile video will surprise everyone. i think it's already big and it gets even bigger over the next few years. and we are working on how do we get really deep and use video as an engaged. lever on our key products like news, sports, finances.
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>> it seemed to me that at the end of the day, what you are saying is the biggest asset yahoo has other than its people, is the number of its users. >> that's right. th v that we haven't lost.you >> the audience that comes to yahoo, the following of the brand, the fact that people comeev ree day, you know, there is a huge amount of-- huge number of people who really rely on us. and a huge amount of traffic that ultimately gets distributed through athoo google. wonderful family and you have all the money that you need for the rest of your life. and other lives. but show because this has been difficult, this has been such a
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challenge, with expectations that you had might not have been fulfilled early on, that your own determination to do this has magazine anyified today because of the challenges that have presented themselves. >> i think absolutely. i believe now i feel like i'm so close. like i can see it. i can see how yahoo can win. can i see how we can get there. so that does make me even more determined in the outcome. >> why do you think other people haven't seen it so clearly as you have? >> well, i mean i get. >> are you questioning yahoo at this moment. >> i get a front row seat. and there is no question our situation again is complicated. >> it's complicated, challenging. >> and there is a lot of work left to do. but i can see how much progress we've made. >> why haven't other people seen it? >> can i see where things go ultimately in the feult. there are big die cot mes at yahoo. are you looking at the operating business or the asian assets. you know, which are tense of
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billions of dollars. and you know when you lack at how do you balance those. >> how do you balance those, you know, i definitely see in our shareholder base we have some people who own yahoo because of the core business, some people own yahoo because of around the asian assets. >> wouldn't you bet 90% of the people. >> how would you break that down in terms of people who see yahoo because of its asian investment versus the number of people who see yahoo because of its core business, i would suggest that most of them see the value of yahoo because of its asian investments. >> right, certainly there is a value. >> you agree with that. >> certainly the value is now very heavily weighted. but why you own the stock maybe because of your thesis in terms of where the value can be driven from in the future. what do you think is going to be the biggest cat list. >> you believe, you firmly believe as the c.e.o. that the value of a core assets can be. >> i think it can be much higher than today. >> clearly because you think the mar can yet is way yownd valued
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in your assets. >> having believed that. do you believe that the value of your assets can match the value of the assets of the japanese investments. >> i think-- you know, overall, i think that we would need to achieve growth, right. the market value, growing, revenue growing, ebitda, we know that because of some of our declining legacy revenue we have been weighted down. but now. >> they got rid of the legacy revenue. >> now that we are moving away which is largely driven by premium banner ads, now we are moving towards native, mobile and video, you know, we can see a path towards that will have growth in it and growth is valued more highly by the market. >> and would the growth be much easier if you had heard it, inherited a much better situation and put more focus on it at the beginning? >> think that we overall to us canned on the appropriate amount. i think that when you come into a turnaround you have to make an immediate decision. do you try and builded legacy
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revenue back up that wasn't possible for us. do you invent new businesses to try and offset that declining revenue. over do you just take the declining revenue out. i would argue that our revenue base was large enough and our services are large enough that we couldn't just walk away from them. so we really didn't have a choice. we needed to stabilize the core business while we added new businesses. and had to get those new businesses growing really fast and get them to a scale that ultimately really married or a four to five billion dollar base of revenue. we have come so far in that, with our mobile video native and social,ed maf ins revenue being a third of our total revenue from essentially zero in 2011 and 2012. and so you know the issue is our legacy businesses have been declining really quickly, despite our best stable displaition. if you haven't triez to stabilize it could have been worse. we have been losing probably on the order of half a billion dollars a year in terms of legacy revenue that we ultimately saw. a lot of people said okay, well,
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i talked about it almost as tech tonic plate shifting. our revenue year over year has been very flat and stable. but the exotion of that revenue is quite different, where you have huge amounts of legacy falling away and huge amounts of new revenue coming in in terms of mobile and native in particular. >> then at the end of the day i hear you saying, and you talked about your plan and you talked about how you see it working. i hear you saying, you know, that in terms of my tenure there as c.e.o., essentially have i done what i had to do because of the lech see business that had to stabilize them. so it's not that i made the wrong decisions. i made the decisions that i had to do because of the condition i felt the company in. >> that's right. and as i said, i think a lot of us comes down to timing and pacing an expectations. so certainly the lines to success is never, the path to success is never linear, right. >> but i do think that you know, we overall have done what we
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needed to do. we have done it really well. we've actually done some things better than i thought we could do. if you look at that mobile growth, that is way faster. >> than i expected, absolutely. so there are some things that have gone better. but that said we are still in the transformation. we haven't made it yet. we haven't turned yahoo around and gotten the revenue growing. and we have seen great growth overall on users. and digital, you know, revenue does follow the users. but you know, the assets that we've had to come from, those large legacy assets, they are a real benefit because they are so large. but they're also a burden because are you groag up with such a large base it's hard to get to meengful growth quickly. >> are you confident that the activist stockholders will give the amount of time that you need to make these assets grow? >> i think that a lot of this has to do with how do we find value for our shareholders. certainly the reverse spin, the review of strategic alternatives is something that i think is really important overall for the
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company. and being able to find the strategic boost that would come from either of those and unlocking of value that could come with either of those is something that can be beneficial. >> let me talk about instead of the human side too, of being an executive, first time you had a child, were you back at work in two weeks. >> yes. >> everybody talked about that. as a matter of fact. your choice. then you also basically made a decision in terms of did you rather he people not working at home but working on the yahoo campus too. tell me in erm its of the people aspect how you see it, in terms of your family, your job, in terms of the responsibility of couples and husbands to be part of this process. >> sure. i think the one vein that runs through both the work from home controversy, we'll call it, and families, that i think that it always comes down to personal choice. how you want to do things. and i really support that
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personal choice. you know for us, from the working from home piece, you know, yahoo is in the middle of a really complicated challenging turn around. this is our moment. we need all hands on deck. and we're not saying that this is, that working from home is not the right thing. it's just not the right thing for yahoo right now. and you know, yefer all with my family, i have such an amazing family. i've got an amazing three year old little boy mcalyster. and now i feel like i literally won the lottery. have i identical twin girls. twins run in my family. i disn even know it could happen. turns out one in 300 pregnancies turns into an identical pregnancy. i literally ran the lottery, never con tell plated this outcome. so it is just amazing hague them be part of our lives, you look at how are you a parent, a mother, you have to make a decision on where you want to spend your time. i certainly am making sacrifices to be there for the company during critical times. i first got to yahoo was a critical time i couldn't take
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much time off. right no now is a critical time, i couldn't take much time off. i was lucky to have the girls right before christmas and had a fair amount of time with them and i will likely take time with them over the coming year. but you know t is a key element. but for me, you know, i will make the sacrifice. i off len say, you can't have everything you want but you can have the things that matter to you. and for me, i can have my family and can i have yahoo and can i do a good job with both. there might not be a lot of time for anything else. admittedly, but you know, that's really how i have approached it. certainly there are some women who want to work. there are some women without don't want to work. i think both are completely valid choice, same is true for ma ternive leave. but you have to make the choice that works for you and your family and your particular situation and circumstances. >> rose: the choices are made were what work to for me. >> that's right. i have encouraged everyone at yahoo to take their time. and interestingly, everyone at yahoo who had a child last year took at least a month off
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afterwords, most, 75% took the full four months off that we offer as part of our maternity leave policy. a lot of people say wait, are you setting a poor example by taking such a short leave. i needed to because of the state of the company. and because i will find my way of carving out a lot of time with my daughters and my son. but i really encourage people to take the time that they need and do things that their way. >> rose: you came back after two weeks did people say are you crazy. >> you know, probably. but i think that you know, again like everyone does this in their own way. i came back to work really quickly. but i also made a lot of time to spend with my children, you know, in the same context of being back at work. so you can have a lot of time with your children while you are also finding down times, nap times, different moments in the day to ultimately get the work done. >> rose: finally there is a question of women in silicon
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valley. are you often cited as one of the most prominent examples, you and sheryl sandberg and some others out there at different companies, including google. is it going to get bet sner. >> i think it will get better. i think that, you know, technology and especially like the internet and computer science are really new. >> what they loved about you look, she's an engineer. >> no, and i'm really proud of my engineering background, the fact that i can exreum and i'm a computer scientist. >> rose: do you still code. >> yes, i do. and i love it. not professionally of course. but on various little side projects. but i would say you know overall i think that we've just got to make the-- i think we have to make technology and computer science in general really tangible. because it shows obviously shows that the issues in terms of having enough women in technology starts really early. they start in middle school nrk high school. and so we've really got to get to a point. i think as technology becomes more and more accessible, people
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sort of say wait, how can i build that. how can i work on that. how can i do that. and i'm hope thafl will ultimately drive more women into computer science and into technical fields. >> rose: because it is a long way to go. >> yeah. >> rose: finally i didn't talk much about this but about encryption. are you supportive of apple. >> yeah, we are supportive of apple. to be clear, we don't have any tolerance for terrorism. but there is certainly an element of trust around our services. and i think when you look at apple's stance overall, it's really around the fact that some of what they are being asked to do could really be abused an eunsed against users who aren't part of ter rimple-- ter rsm it is a very gray area in terms of okay f that technology, if that back door exists, how will it be used and how will it be governed. >> it could get better and better. >> i think their stance in terms of how to respond to this request has been really en pointe for their users. and certainly something we would support for our users.
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>> rose: great to you have. >> thanks. >> rose: for more about this program and earlier episodes visit us online at pbs.org and charlie rose.com.
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>> funding for charlie rose is provided by the following: and by boom berg a provider of multimed where news and multimed where news and information services worlds wid
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narrator: an earthquake ros s nepal. powerful tremors catch millions by surprise. there was a very violent earthquake. narrator: collapsing buildings kill thousands. many are buried alive. andrew olvera: and we're going to go ahead and have the rescue squad come in and help extricate that victim out of the hole. narrator: it's the biggest quake to happen here in 80 years. michael andrew: major earthquake! we've never seen anything like it! climber: oh, look at that, look at that, look at that! narrator: the quake triggers a huge avalanche on mount everest, killing 20 people. paul devaney: whoa, whoa, whoa, inside! narrator: it's the himalayan peak's most deadly day. david breashears: it looks like what you see when one of these tornadoes runs right through a place. i've never seen anything come at us like that before. narrator: millions across nepal are homeless. many are cut off from the world by landslides. suraj vaidya: they've lost all the houses that they had. the whole village is wiped out. narrator: even scientists are stunned by the powerful aftershocks.

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