NEW YORK (CNNfn) - In a year that has seen Yahoo! stock climb a stunning 217 percent, all market eyes seem to be on the premier Web site operator, but company CEO Tim Koogle promises that the best is still ahead.
Koogle also discounted nay-sayers who see little room for the company to grow, citing Yahoo!'s expanding list of media alliances as proof that the formerly humble search engine can re-invent itself as not just a "content provider" but an "Internet portal."
A partial transcript of his "Street Sweep" comments follows.
TERRY KEENAN, CNNfn ANCHOR, STREET SWEEP: An incredible run for your stock. It's gotten a lot of media attention, a lot of investor attention. As the CEO, when you see this run-up in your shares, it obviously makes you proud. Does it also make you nervous?
TIM KOOGLE, CEO, YAHOO!: Well, we actually focus on running the business and serving our customers really well. You know, we work pretty diligently in educating the Street on what the company is doing. Our philosophy has been that share price takes care of itself long term.
KEENAN: And your share price (YHOO) is going to split two for one like a lot of the other Internet companies. Why are you doing that and to what degree are you doing it to improve the liquidity and the float of your shares?
KOOGLE: It really is those two things and quite frankly, it's a move that we put off for a couple of quarters. We've been asked the question on the Street a number of times and it sort of grew in tenor, if you will, as to when we would split the stock. And we intentionally put it off. But we did want to increase the float out there and that helps volatility and all sorts of natural things.
KEENAN: There is a lot of interest in who's buying these Internet stocks and whether it's small individual buyers or institutions. What kind of institutional ownership do you have?
KOOGLE: Very large, and that's an interesting question. In the most recent quarter, we had about 80 percent institutional holding of the stock, about 20 percent retail, and that is exactly 180 degrees opposed to the holdings when we first came out with our IPO a couple of years ago.
KEENAN: And I guess it would ensure perhaps more stability for your share price and longer term ownership. Let's talk about the specifics of your business, your numbers out in the last couple days. And you have said in those numbers that registered users came in at 18 million -- a 50 percent increase over the last quarter. Who are your new users?
KOOGLE: We have a wide range of users. We have now 13 countries outside of the U.S. where we have specialized versions of Yahoo! operating. The most recent quarter we launched Yahoo! Chinese and Yahoo! Spanish, so we're reaching now the Chinese and Spanish-speaking populations in the world with our offerings. And so our exposure to global audiences just continues to expand.
It's by design, a part of our strategy. So that is sort of from a geographic standpoint. We have a nice balanced reach in the workplace and at home. We have probably 55 percent reach in the workplace here in North America, about 44 or 45 percent reach in the home. Those kind of nicely grow, kind of in balance and so we have a nice spread across at home and at work users and demographics.
You know, in the most recent quarter we're at about a 60 percent male, 40 percent female. So we're starting to have a quite nicely balanced population from a demographic standpoint.
KEENAN: And that balance is a goal of yours?
KEENAN: If there was anything to worry about in this otherwise stellar report, it would be traffic. Some people are worried about traffic, which was up 20 percent on a sequential quarter over quarter basis, but they attributed it to seasonal factors. What do you attribute that to?
KOOGLE: Seasonal. Typically during summer holiday periods and there's another holiday around December with Christmas to New Year's being kind of a holiday. Traditionally people are outdoors a little bit more in the summer months and that sort of thing. The good thing for Yahoo! is that we do have a balanced reach in the workplace and at home, so the workplace consumption typically continues to track through the summer months. June is the first month of the real summer.
KEENAN: And how, then, do you see your business? A lot of Wall Street analysts and investors are trying to value these Internet companies, but do you see yourself as a media company or as a computer-related company? How do you view yourself when you look at your business model?
KOOGLE: Of those two, media is clearly it. In fact, from the beginning, we thought of our business and built a culture and actually a business model around that type of media business. We aggregate content, merchant services and communications services, deliver those for free consumption and then post paid advertising and merchant programs against that. It's a similar model and we think about the business that way. So it's a kind of a media business.
KEENAN: And then who do you see as your big competitors?
KOOGLE: Well, you know, our direct competitors remain the group of companies that went public in 1996, largely, you know, Excite (XCIT) , Lycos (LCOS), Infoseek (SEEK). To some extent we compete with other online services companies out there.
KEENAN: America Online (AOL) and the like.
KOOGLE: Right. Right.
KEENAN: Netscape (NSCP) tomorrow is going to launch a media (promotional) partnership, teaming up other media companies. Do you see that as something that you would also want to get into, those types of alliances with media giants?
KOOGLE: Well, you know, it's something I haven't talked about too much publicly, but yesterday on the conference call I went into it a little bit. We have, from the beginning of our company, partnered with media companies worldwide. And I intentionally did a count coming into the conference call yesterday. We have probably over 400 partnerships with content companies, media companies worldwide.
There are contractual relationships where we do cross-branding, cross-distribution. We are also supplied the Yahoo! original content that we put up on our services, and so we're no stranger to this whole space. Many of our partners are network businesses, affiliates of networks in both the radio and the broadcast media space as well as some print folks and we're just going to continue to do that. It's inherent to our business the way we always operated and we will continue to expand.
KEENAN: What's next for you? When your third quarter numbers come out, where are we going to see the real areas of growth for Yahoo!?
KOOGLE: We never make forward-looking projections directly from the company. We rely on the banks that cover the stock to do that, and from a financial perspective we now have about 18 banks covering the company. So we rely on that consensus analysis for financial projections.
You will see us from an operational perspective that just continues to extend and extend and extend globally with our international properties into the area of commerce with deeper aggregation on behalf of our merchant partners.
We're extending in the most recent quarter through the acquisition of Viaweb into enabling small- to medium-sized companies to create an online presence authored on Yahoo! and promoted on Yahoo!. So you'll see us extending the bar and aggregating more and more deeply in the area of commerce.