While the world marvels at the seemingly endless ascent of Yahoo's stock price, the company doesn't even think about its share price on a day-to-day basis, preferring to focus instead on building a sustainable business model for the future, said CEO and president Timothy Koogle here yesterday.
And how does Yahoo plan to keep building value for its shareholders? By continuing its overseas expansion, focusing on its key mission statement and increasing revenue from advertising sales, Koogle said. But moving forward, Yahoo also plans to build up its involvement in direct marketing schemes, increase its role as a middleman in online commerce deals and sign more partnership agreements with service providers.
Koogle was speaking during a keynote session this afternoon at Milia, a trade show focused on the interactive content market.
About 50 million people per month used Yahoo in the last quarter of 1998, accounting for around 15 billion page views per month during the same period, Koogle said. By leveraging this huge audience with advertisers, Yahoo can continue to generate a large portion of its revenue through ad sales, much in the same way traditional broadcasters do, he said.
However, in the future, Yahoo plans to get away from a completely ad-driven revenue model, especially as e-commerce grows into a more mature market, he said. The idea is to partner with vendors to sell their products to Yahoo's user base for a percentage of the transaction price, but not for Yahoo to offer its own products. For example, Yahoo's travel service is a partnership with Travelocity, he said.
When asked by a member of the audience if Yahoo wasn't afraid of losing market share to smaller niche players offering targeted content, Koogle compared Yahoo to the real world, which has many types of shops or service providers in one area. Yahoo will continue to serve as a "general collection point" for people who are not necessarily looking for something in particular, but could get interested in a product or concept by chance, he said.
In the same way that someone might accompany a friend to the mall with no intention of buying anything and end up buying a pair of socks, people will come to Yahoo for something in particular, such as the search engine, and leave with additional content, such as an online stock portfolio tracking service.
"A general setting lets people bump into things they aren't necessarily looking for," Koogle said.