Chatting with Yahoo's Jerry Yang & Susan Decker

I'm watching Yahoo's Jerry Yang and Susan Decker on the D stage. A bit of Q&A. The obvious first topic was Microsoft.

Says Jerry, "the process started in a way that was very public, but we weren't aware of all the twists and turns it was going to take. Our board and company were open to a transaction, but it had to be the right deal terms. Microsoft has not chosen to pursue the acquisition but is open to partnering with us in other ways."

"We never got through the price door. There was a lot that wasn't finished. Price was the main thing," says Susan.

Walt asks about Google, "why would you want to outsource your search advertising?" Jerry responds, "shareholders have asked us, 'what happens to the search inventory and the ability to monetize that inventory?' We've been clear that there has been a value gap between us and Google, and we have an understanding of what we can do for each other. We are a uniquely positioned company. We have an increasingly competitive monetization system and it is a unique arrangement that isn't well understood." Separate from the value both companies can bring each other, he reminds the audience that they have remained competitive in the advertising space.

Walt asks, "you have been losing share in search as has Microsoft," and references the notion that Google is danger of becoming a monopoly. "Everyone seems to be slipping except for Google. Doesn't that mean that your opportunity to monetize advertising is also falling?"

Says Jerry, "our refocus from the pricing part to the volume part is creating more innovation. We are becoming more open as a platform. We think the search game is very early. The way that people search, process and pass that information around is still in early stages. We're starting to have the right infrastructure and scalability to really differentiate."

Walt asks, "What is Yahoo today?" Jerry says, "we want you to start your day with Yahoo. We want people to come to Yahoo at the start of their day and several times a day. That means your home page, mobile, search, mail.......but we can't be everything to everyone."

Adds Susan, "it's about the journey and in that process, we're focusing on four areas: home page, search, mail and mobile. It's a change. We diluted our focus over the years, but now we're back to focus on four key things and making them more open for people."

Jerry reminds us that Yahoo reaches about a half a billion people every month. "We need to continue to be relevant to people as they grow up on the web. We believe that the desktop and mobile will become more fluid over time. The modality is going to change. We believe in an open system strategy and are rebuilding our platform to be much more open. Developers will be able to program on Yahoo as a canvas."

Walt says - "this is similar to what MySpace and Facebook are doing, right?" Jerry says, "if developers were producing mail apps to make mail more powerful, that is a different route than what they're doing. People come to the Yahoo home page to get content and communications and to some extend, understand what is going on. If the apps are targeted to the Yahoo user, its a different dynamic. The output of what people will have is so much more rich and powerful. We're more interested in the starting point, but we don't care where people go from there."

Susan pipes in, We have 10 billion social connections on Yahoo. There's context around where you are, which is different from what's out there. We have areas that are contextually relevant. This will create a better ad model. The larger that model gets, the less relevant it gets. We want to create both relevance and social connectivity."