The Hindu Business Line : Terryfic!

Given the number of hit films — from Chariots of Fire to The Matrix — he delivered during his 18-year tenure as head honcho of Warner Bros, Yahoo! Chairman and CEO, Terry Semel, is remarkably untheatrical.

Even the gold bracelet he sports on his right wrist, which was the cause of much mirth when he took charge of Yahoo! in 2001, is a protection against a shellfish allergy. He's soft-spoken, but when he speaks, he is in command.

From the ultimate Internet outsider to one of the World Wide Web's big success stories in recent years, Semel has had a dream run and his personal worth is many times more than that of the Indian Internet industry. (The New York Times says he netted $403 million by exercising Yahoo! options and selling shares in the last two years, and he continues to own shares and options worth more than $230 million.)

So, when Semel visited India recently with Yahoo! co-founder, Jerry Yang, the cyber world was in a state of turbo-charged excitement. It was his first visit and as he told the few journalists who got to speak with him, he had forgotten most of the names of the people he'd met, but he was going back with a packed Rolodex.

Fortune-maker

Unimpressed by the argument that India was still in its Internet infancy, Semel couldn't have sounded more bullish. "For just about everything we do on the Net, it's early days yet," said the man who has turned Yahoo! from a company that had reported a loss of $98 million on a revenue of $717 million in the year he joined, into a behemoth earning $1.2 billion in 2005 on sales of $5.3 billion. Yahoo!, Semel reminded us, is visited by one billion users, of whom 500 million sign in at least once a month and 200 million are active registered users. It generates four billion page views a day.

It is also the world's largest music site, which has five billion user ratings and reviews of the songs stored on it. Yahoo!'s market cap is $50 billion, which is nowhere near the $120-billion at the peak of the dotcom wave, but the Internet empire, to quote The New York Times, "is worth roughly the same as the newly Pixar-ised Walt Disney Company or the combined value of the recently split Viacom and CBS."

India, Semel said, was on its way to becoming "one of the most important countries" for Yahoo!, and not only because the behemoth's Engineering Services Group in Bangalore had emerged as a "world-class centre" of excellence.

"Why should you think your young people are different than ours?" he asked. "I was in my hotel in Mumbai waiting to go for a meeting and the young people I saw are no different from my three children. Seeing them, I kept thinking I have seen this before."

But the veteran of acquisitions — the one that turned around Yahoo!'s fortunes was the takeover of Overture, the company that invented the search technology — refused to let out anything about his mission to India. All that he was prepared to say was that India was going to be one of the top three Internet markets in the world.

"I don't want our competitors to get ideas when they read the newspapers tomorrow," he said in his disarming way. "We've met with a lot of people. People who could be great partners, or people who we think we can buy. We've identified a number of potential partners who do things we don't."

His grand vision

He was more forthcoming on other subjects. Like Yahoo! Go, which caused a buzz in the geek world after it was unveiled at the Consumer Electronic Show in Las Vegas in January 2006. Yahoo! Go is a "terrific seamless technology" that could "sync up" three facets of our "connected life" — the PC, mobile and TV — into a single user experience, Semel explained.

Back in January, spelling out his grand vision, Semel said that the "Electronic Joes" had "invested a lot of time and a lot of energy setting up their world on the PC and they now want the ability to take that information wherever they go."

Yahoo! Go is up against Microsoft's Media Center Edition and Intel's Viiv, but it has one big advantage: the software is free and it can be installed very easily.

Under Semel, Yahoo!, somewhat like your friendly neighbourhood cable monopoly, is driven by the global ambition to control all the channels for the distribution of digital content. It's also redefining the business of search, the business that is responsible for Google's omnipresence on the Net, by making it community-based.

Searching for answers

Semel believes that Yahoo! Answers beta is the answer to the phenomenon that a French politician had described as `omnigooglisation'. The service, which provides a community-based alternative to traditional search engines, is patterned after the model launched in the US in December 2005, followed by the UK, Canada and Australia.

Answers lets a community of users, driven by a points system that elevates some of them to the rank of subject experts, engage in problem-solving for fellow users by combining the qualities of a search engine with those of a discussion board. Speaking at the launch of Answers at a press conference in Bangalore, Rishi Behal, Yahoo! India's Head of Search, likened it to a "Human Knowledge Search Engine."

Answers may not produce the instant returns of a search engine, but the users are likely to receive more helpful, and easily accessible, responses to more subjective questions, like `What is the remedy to ingrown toe nails?' or `Do animals laugh?'. It also provides an element of serendipity to the experience of logging on to Yahoo!.

Semel said it was "early days yet" for Web-based search business, but "people-to-people search" was a model that seemed to work. "It has terrific potential. It could turn around the Internet search business," he said about the response to Answers.

Delving into the history of Answers, Semel said Yahoo! had borrowed the model from Korea, where the company that launched the service was now the leader in the search business. "It has changed the Internet marketplace in Korea," said America's fourth highest-paid CEO, who took home a cheque of $43.8 million last year.

He also cited the success of Flickr, a photo-sharing community that Yahoo! had acquired a year ago. "In one year, the number of photos posted on it has grown from 1 million to 100 million," Semel said.

Without naming Google, he admitted that "the other guys monetised search much better," but he explained why it was Yahoo!'s turn now to be on the top of the business: "We've the advantage of owning the first mover (Overture). And we've the advantage of seeing what the second mover did better than the first."

In the coming months, the Internet business will be defined by how Yahoo! measures up to the challenge of Google's search juggernaut and Microsoft's renewed interest in the Web. When Semel shared the Warner Bros CEO's job with Bob Daly, the two had diversified the studio from one revenue source to 50 different businesses and upped sales to $11 billion in 55 countries from under $1 billion in one country. On the days Semel flies in a Gulfstream IV corporate jet from Los Angeles, where he lives in the uber-chic Bel Air section, to the Sunnyvale HQ of Yahoo!, there's one thought that drives him: "Being terrific in one thing is not enough. As soon as there's another cool thing, that's the way to go."

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