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Feb. 25, 2008

In their first public appearance since Microsoft’s hostile $44.6 billion bid for Yahoo, company president Susan Decker and Yahoo's original founder Jerry Yang gave a speech about the company’s online ad strategy to a crowd of abour 400 industry players. Yang then offered a brief Q&A session to the audience.

Overall, Yang offered little insight into Yahoo’s take on Microsoft’s move to acquire the struggling Internet portal, and that was pretty much expected by most observers that have been following this from the beginning.

Then on Feb. 11 Yahoo formally rejected Microsoft's bid saying that the offer didn't represent fair value for its shareholders and was too low to be accepted.

The executive board felt Yahoo was deeply undervalued at $31 a share. Since then, Microsoft has beefed up its plans to takeover the company and has hired a proxy firm to help oust Yahoo’s board. Late on Feb. 22, Microsoft released an internal office memo from Kevin Johnson, the president of Microsoft’s platform and services division, about how the software giant plans to integrate Yahoo with its own operations.

However, Yang still remains confident about Microsoft's proposed buyout bid. “The number of people who talk to us about the industry and what it could mean, in either direction or either outcome, it gives me a lot of encouragement that Yahoo goes to the right place,” he said.

As expected, not everyone shares his optimism.

Yang added “we can’t say a whole lot about the process that we’re going through. However, we’re very focused. We’re taking the proposal that Microsoft has given to us very seriously. It’s been a galvanizing event for everyone at Yahoo. Our board is spending a lot of time thinking about all the alternatives. It’s something that we need to think through carefully.”

Borrowing from the same, carefully-worded key points, Susan Decker also referred to the Microsoft deal as a “galvanizing force, both internally and externally...”

Both Decker and Yang tried to drum up some excitement for a new ad platform that Yahoo is working on that will allow marketers to buy display, search, video, or mobile advertising in a convenient one-stop shop.

Decker was quick to point out that “overall, we’re trying to revolutionize the online advertising industry." She didn't say when the new platform would be available however.

For his part, the only prediction Yang offered was that spending for online advertising will be bigger than television in five years.

According to the IAB and Pricewaterhouse-Coopers, last year alone, Internet marketers spent about $21 billion in online advertising in the U.S.

Television ad spending was a little over $161.9 a billion in the U.S., and is expected to rise 3 percent this year, according to marketing firm Group-M.

As many observers had expected, Yang reiterated his plan to turn Yahoo into a starting point on the Internet, a concept he promoted during a speech he gave at January’s Consumer Electronic Show in Las Vegas a few weeks ago.

Decker added that Yahoo would soon release a new feature that highlights “the best content from the web” to drive more traffic to its Yahoo homepage as well as to its alliance of 500 newspaper websites.

Social news aggregators like Digg.com and StumbleUpon already provide similar services where users vote on popular content and news of the day stories.

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    This article was featured on Business 5.0.

Source: Yahoo.