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News > Technology
Yahoo! on holding leadership
November 18, 1998: 11:56 p.m. ET

Founder Yang: As Internet continues to grow, key is keeping users' mind-share
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NEW YORK (CNNfn) - Yahoo! remains one of the biggest winners among all Internet stocks. Investors don't seem to be able to get enough of the stock despite its soaring price.
     Yahoo! (YHOO) has shot up a stunning 450 percent over the past year. On Wednesday alone, it climbed a sharp 13-3/8 to close at 190-1/8.
     Yahoo! founder Jerry Yang discussed the company and the future of the Internet Wednesday on "Moneyline News Hour with Lou Dobbs." Here are highlights of that interview:
     LOU DOBBS: Your company is one of the few (participants in the Internet segment of the market) making money. And the performance that you've had -- 15 cents in the last quarter versus a penny a year ago -- modest compared to market capitalization; it represents investor hopes and belief in you and your company. Give us an idea of how you're going to be able to maintain this impressive and incredible run that you've had, both in terms of building revenue and earnings and stock appreciation.
     JERRY YANG, FOUNDER, YAHOO!: Well, you're asking how we're continue to stay ahead, and, you know, one of the exciting things about being in the dynamic industry like the Internet is we are focused on winning, and we need to continue to be in a leadership position.
     And we're going to, obviously, count on the Internet continue to grow, and that's been the biggest driver of all of this is the secular growth on the Internet continues to grow in leaps and bounds, and the hopes on e-commerce and communications going forward is what we're trying to capitalize on. But, you know, unless we're in a leadership position, we're not going to be able to capitalize on any of it.
     DOBBS: Can I ask you, Jerry, leadership position as what? You talk about e-commerce, you talk about content, talk about search, directory, what aspect -- leadership in what?
     YANG: Well, it's -- for us it's fairly simple, it's the mind-share of the people using the Web. How often do they think in using Yahoo!, how can we establish a relationship with an average consumer using the Web?
     DOBBS: And as you look out -- we talked about Yahoo!'s stunning performance -- as you look at theglobe, EarthWeb, a number of the stocks that have been rocketing, what does Jerry Yang think as you look at this sector and see what's happening? In this case, companies that barely have, in some cases, revenue, forget earnings.
     YANG: Well, I think that you continue to see a lot of excitement that's in the Internet sector, and certainly, for a lot of investors wishing to catch a piece of the companies. And my personal feeling is, obviously, as with any industry, you'll have some companies that have better fundamentals than others, and it's the job of the investors to make sure they pick the right ones.
     DOBBS: And somewhat more modest expectations surrounding what they will do in terms of mind-share on the Web. We can't even agree on what the Web is right now, in terms of its dimensions: the numbers range from 25 to 28 million users to as high as 70 million. Give me an idea just how big is this place you want a mind-share in?
     YANG: Well, the easy number for me -- by the end of this year, you'll have 100 million people on the Internet around the world, and about -- our belief is about 70 percent of that is here in the U.S. And that number is expected to double or triple in the next three or four years, and that's the big pie that we're all looking at, and all the marketing and advertising and commerce dollars that could potentially be incurred by those hundreds of millions of users.
     DOBBS: Jerry, let's go back to something you said when you're talking about leadership. You are search, you are directory, you are content, you are media, you are e-commerce. Who do you want to be in a leadership position in front of? Is it the media companies, the other search engines? Precisely whom do you see as your nearest and most feared competitors?
     YANG: Well, you know, you're talking to the founder of the company who's one of the most paranoid people in the company, and, you know, our list of competitors have continued to get larger. Everybody now, from traditional competitors in our space, to software companies, to online service companies, to media companies have all jumped in the fray.
     And I think we're all after the same things; how do we continue to be the best broad-service, Web-based service company for the users. And my feeling is that, you know, our biggest challenge going forward for Yahoo! is to continue to execute on the vision that I think we have a very clear idea of what we need to do, and how do we continue to service the users? If we can continue to service the users in a way that they want to come back to Yahoo!, we'll be in a great position.
     DOBBS: The portal strategy being adopted by many media companies at this point. Do you see that as fundamental to their ability to engage you going forward?
     YANG: Well, I think that, as you look at -- if you start believing the numbers that I just talked about, clearly, no matter whether you're a media company, you're a retail company, you're any vertical, consumer-oriented industry, you're going to have to look at the Web very seriously as a channel of reaching your customers.
     And certainly we've seen the computer industry get on to that, the software industry get on to that, and it's no surprise the media industry and the telecommunications industry will get on to that as well.Back to top

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