Yahoo's Marissa Mayer on Microsoft Search Deal, Alibaba Spinoff

By Dennis K. Berman 

Yahoo chief executive Marissa Mayer said that her company's newly reworked search partnership with Microsoft Corp. was structured to "put more pressure on Microsoft to make the product better," and that the tax-advantaged status of the company's scheduled spinoff of Alibaba and other assets was in good shape.

In a meeting with Wall Street Journal editors in New York, Ms. Mayer expressed confidence in Yahoo's evolution to a company driven by mobile and video presentations, and more tightly-integrated advertising formats.

"'Native' advertising is the fancy word that the digital world has chosen to put on the fact that the banner ad is not going to last long-term," Ms. Mayer said.

Referencing banner advertisements that perch on the edges of desktop computer screens, Ms. Mayer said that "on no other medium are the advertisements on the edge of the screen. We can't trick readers but we do want presentation formats that makes readers engage with the advertisements."

Ms. Mayer also said the company was refocusing on improving its search capabilities, and its new Microsoft relationship was designed to enhance that. Under the new deal, Yahoo and Microsoft can each terminate their agreement starting on October 1. Yahoo also has latitude to generate more of its own search results, instead of relying only on search results generated by Microsoft's Bing search engine.

Ms. Mayer quoted her counterpart CEO, Microsoft's Satya Nadella, as saying "We have to earn your business every day," noting that the deal would help both companies get better at their search capabilities and challenge Google Inc. "Ultimately we want to give the best possible search experience," Ms. Mayer said.

Despite Ms. Mayer's many acquisitions and strategic shifts, the Yahoo's revenue has been static since 2011, and the company has been under intermittent attack from investment activists.

"We engage with constructive dialogue with all shareholders," Ms. Mayer said. "What's hard about it as a CEO is you only have a certain amount of time you can spend with shareholders. I read somewhere that [Amazon's] Jeff Bezos spends six hours a year with shareholders. I spend considerably more."

Write to Dennis K. Berman at [e-mail]

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