This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Yahoo! Snipes at Microsoft

Yahoo! (YHOO - Get Report) chief Terry Semel is staying the course even as the most popular site on the Web faces heightened competition from Google (GOOG) and Microsoft (MSFT - Get Report).

During a breakfast meeting in New York Thursday, Semel emphasized that Yahoo!'s efforts in search have come a long way in a short time. He also argued that Yahoo! had no choice but to provide information to Chinese authorities that some critics say has led to the jailing of dissidents.

Semel used the talk, which was moderated by New Yorker magazine writer Ken Auletta, as a chance to make a few digs at Microsoft's plans to spend huge amounts of money to improve its struggling MSN unit. In addition, he argued that Yahoo! continues to enjoy a competitive advantage over its rivals because of its huge user base.

Though Yahoo! lags behind Google by a wide margin in search, MSN trails them both. The software giant wanted to partner with Yahoo!, something that Semel likened to being asked to give up an arm.

"My impartial advice was to say that you have no chance," he says.

Microsoft ended its relationship with Yahoo! to run its search engine and struck out on its own. The Redmond, Wash., company recently shocked Wall Street when it announced plans to spend $2 billion in fiscal year 2007 to expand beyond the desktop.

The notion of Microsoft buying Yahoo! "never came up," Semel says. Microsoft is reportedly considering such as an acquisition, though Semel cautioned that his employees might not like being under the control of the world's largest software company.

Yahoo! has questioned market research data that shows it losing market share to Google, which has concerned investors. The company entered the search business in 2003 with the $1.6 billion acquisition of Overture, which, at the time, was a sizable bet.

"If we had failed, we would have had serious problems," Semel says.

On China, Semel emphasized that the company is mindful of the worries about dissidents. Yahoo! routinely provides information to governments around the world who subpoena it. The company often doesn't know the identity of particular users.

Yahoo!'s original-content initiatives also came up during the discussion. Earlier this year, Yahoo! scaled back the plans of Lloyd Braun, the former ABC television executive, to develop original video programming because the offerings were too similar to TV shows, Semel says. That change reportedly caused a rift between Semel and Braun that has since been resolved.

"Why should Yahoo! do television?" he said. "We don't have aspirations to have 2,000 creative people working for Yahoo!."

Shares of Yahoo! fell 22 cents to $31.87.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,321.71 -95.14 -0.55%
S&P 500 2,007.45 -13.80 -0.68%
NASDAQ 4,664.7610 -18.6460 -0.40%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs