Yahoo! Snipes at Microsoft
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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV