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Getting to grips with the new economy Yahoo! is one of the venerable names of the dotcom world. Stefan Stern chats to Glen Drury, vice-president for northern Europe, about keeping tabs on the many strands of the worldwide web(The Daily Telegraph, Via Thomson Dialog NewsEdge) IF YOU think you are confused by the fast-changing world of the internet, with 75-year-old Rupert Murdoch spending $580m last year to get hold of myspace.com, the kids' favourite social networking site, only for Google to cough up $900m this summer for the right to provide the search facility on myspace, then think what it is like actually to run one of these companies. Glen Drury, vice-president at Yahoo! for northern Europe (which is to say he is the boss man in the UK, the Netherlands and Scandinavia), does not look unduly concerned by the pace of change in his industry. If anything, he seems rather energised by it. But that does not mean he fails to appreciate the complexities of the market he is in. "How do you describe to someone that you are a TV station, a radio station, a direct mail company, a mail service, a community centre... it's almost impossible to roll that into one thing,'' he concedes. Yahoo! is one of the venerable names of the dotcom world. It has survived, as only very few other internet businesses have. Although its foundations lay in the valuable business of internet search - like its big rival Google - Yahoo! offers a far broader range of services and options through its "portal'' or, in plain English, front door. Yahoo! customers use the company for emailing and sending instant messages, but also for storing photographs, co-ordinating news feeds, booking holidays, buying music, searching the web and a whole range of other web-enabled tasks. Depending on what exactly you are measuring, the firm can lay claim to being the most popular destination on the internet. And, as with Google, the business model is pretty straightforward. Most content and many services are free. And this is all paid for by advertising in many different forms - some of it whizz-bang video, some of it more conventional "banner'' advertising, while some businesses choose to sponsor whole sub-sites: Wrigley, for example, provides a music site on Yahoo! that is heavily branded to promote the firm's chewing gum. "Straightforward'' though the revenue streams may be, that word hardly captures the dynamic and confusing nature of relationships within this industry. Indeed, the Oxford English Dictionary is barely up to the job of providing words with which to describe how the "new economy'' works. For example, Drury is a big believer in what he calls "co-operatition'' (better let him explain that one): "The truth of the internet is that people who you compete with in one channel could be your partners in another channel,'' he says. "We do MSN's search, for example. But we compete as a portal. Therefore it's 'co-operatition'.'' The other mysterious label you hear flying around a lot right now is this phenomenon called web 2.0. Again, in plain English, we might translate this as "the second big wave of internet activity'' - the first having been between 1998, say, and 2001. We have heard about web 2.0 in these pages before - in January, from Jonathan Schwartz, who was then chief operating officer and is now chief executive of Sun Microsystems. In Schwartz's view, web 2.0 was all about greater participation in the internet, about "the edges informing the centre''. Yahoo!'s Drury essentially agrees, but puts it in his own terms. "2.0 is a catch-all phrase,'' he says. "For me it is all about becoming a publisher. We used to be consumers, now many of us are happy to be publishers. Web 2.0 also allows you to connect to people in a way that you were never able to connect before. We used to join clubs. Now you can find people who are chatting about their interests. 2.0 allows you to publish and get your ideas out there.'' This is the sort of so-called "social media'' - blogs, chat-rooms, forums and social networking sites - that are growing so fast today (and are followed by the people at attentio.com, also featured in these pages recently). But before we get too carried away, and declare the imminent death of journalism (because of the blogs) and the end of social life as we know it (because we will just be on-line chatting electronically with our "friends''), Drury introduces a note of caution. Perhaps this is because he has his roots very much in the old economy. For 10 years he worked for Enterprise Rent-a-Car, half of that time on the west coast of the US (his original home), and latterly in Europe. Drury only got involved professionally in the internet six years ago, first working on an early dotcom "flame out'' (ie failure), and then joining the price comparison site Kelkoo in 2002, which was acquired two years ago by Yahoo!. "I hope I'm a realist,'' he says. "I came from a sales background. But it is so easy for people who sell to get carried away and forget the reality of the world. It's important for me to keep these things in check.'' Drury's first point is that real journalists will always be needed, no matter what the blogs come up with. "Blogging is fantastic,'' he says, "but who's doing it? Today it's younger people, by and large. So that's exciting, but it's only really going to get exciting when they carry that on into their life when they become 'time poor' rather than 'time rich'. If you're a time-rich 17-year-old talking about games, that's great. Once you get your first job and become a professional and have less time - then what?'' The other note of caution has to do with the search facility and its limitations. Some people will tell you, with a gleam in their eye, that all knowledge is now available, out there somewhere on the web. Nonsense, Drury says. "If you think about knowledge, there are two types. At a university, there is the knowledge that sits in the library. You have to have some skill to go and find it and retrieve it. That's not dissimilar to web search today,'' he says. "So, that's the library. But the professors and the students and all that knowledge about how to apply the knowledge - it isn't on-line. "Wisdom is not on-line. For one thing, not every book is on-line. And secondly, some knowledge is only experiential. Only certain people have this knowledge. All knowledge is not on the internet - it can't be.'' To deal with this gap in knowledge Yahoo! is launching a new service, called Answers. The idea behind this, as Drury puts it, is to "pose a question to the world'': to post up questions on any subject to the community of Yahoo! users. It's a kind of infinite noticeboard. "Answers could fundamentally alter the way we use web search,'' Drury argues. It is an attempt to exploit the best elements of web 2.0 to capture and present more information. It will be formally launched next month. So while Drury remains a realist, he is an enthusiastic one. "This is such an awesome industry to be in,'' he says. "You never know what changes are going to come. Two years ago no-one cared about social media.'' This is where we came in. Isn't everything moving so fast, and changing so fast, with new alliances and partnerships being struck all the time, that it becomes really hard to understand what is going on? What does a good old-fashioned concept like "market share'' mean in such circumstances? "The market is changing, so market share changes,'' Drury says. "What we should perhaps all be looking at is the consumption of media. Add in newspapers, radio, outdoor, TV, magazines. "In the UK, according to AC Nielsen, the internet now has a 16pc share. It is dramatically ramping up, gobbling up time from TV.'' Seen from inside Yahoo!, these numbers look very appealing. Sales of over $5bn last year, and a current market capitalisation of around $38bn, would seem to confirm this. It is time now, once and for all, to drop all those gags about dotcom hype and cash-burning geeks. Yahoo! - one of internet's great survivors Company Overview Yahoo! was founded in 1994 by Stanford PhD students David Filo and Jerry Yang. It began as a hobby and has evolved into a global brand. Today, led by an executive team that includes chairman and chief executive Terry Semel, chief operating officer Dan Rosensweig, and co-founders/chief Yahoos Jerry Yang and David Filo, Yahoo! Inc has become the world's largest global online network of integrated services. Yahoo! is a leading internet brand globally and the most trafficked internet destination worldwide. The company's headquarters are in Sunnyvale, California, and it has offices around the globe. Copyright 2006 The Daily Telegraph. Source: Financial Times Information Limited - Europe Intelligence Wire. |