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Yahoo! (YHOO)

Q3 2012 Earnings Call

October 22, 2012 5:00 pm ET


Joon Huh

Marissa A. Mayer - Chief Executive Officer, President and Director

Ken Goldman


Youssef H. Squali - Cantor Fitzgerald & Co., Research Division

Brian J. Pitz - Jefferies & Company, Inc., Research Division

Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division

Mark S. Mahaney - Citigroup Inc, Research Division

Heath P. Terry - Goldman Sachs Group Inc., Research Division

Carlos Kirjner - Sanford C. Bernstein & Co., LLC., Research Division

A. Justin Post - BofA Merrill Lynch, Research Division

Douglas Anmuth - JP Morgan Chase & Co, Research Division

Benjamin A. Schachter - Macquarie Research

Martin Pyykkonen - Wedge Partners Corporation

Herman Leung - Susquehanna Financial Group, LLLP, Research Division

Peter Stabler - Wells Fargo Securities, LLC, Research Division



Good afternoon, ladies and gentlemen, and welcome to Yahoo! Third Quarter 2012 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Joon Huh. Mr. Huh, you may begin.

Joon Huh

Thank you, Regina. Good afternoon, and welcome to Yahoo!'s Third Quarter 2012 Earnings Conference Call. On the call today will be Marissa Mayer, Chief Executive Officer; and Ken Goldman, Chief Financial Officer.

Before we begin, I'd like to remind you that today's call may contain forward-looking statements concerning matters such as our strategy and product plans and our expected financial and operational performance, as well as our investment priorities, expectations for industry growth and the Yahoo! Bing Network. Actual results may differ materially from the results predicted in our statements, and reported results should not be considered indicative of future performance. Potential risks and uncertainties that could cause our business and financial results to differ materially from our forward-looking statements are described in our Form 10-Q filed with the SEC on August 9, 2012, as well as in the earnings release included in Exhibit 99.1 to the form 8-K we furnished today to the SEC.

All information discussed on this call is as of today, October 22, 2012, and Yahoo! does not intend and undertakes no duty to update this information to reflect subsequent events or circumstances.

On today's call, we'll also discuss non-GAAP financial measures as we talk about the company's performance. Reconciliations of these non-GAAP measures to the GAAP measures we consider most comparable can be found on our corporate website at info.yahoo.com under Investor Relations. We have prepared remarks that will last about 30 minutes, then we'll have a brief Q&A session. And now I'd like to turn the call over to Marissa.

Marissa A. Mayer

Thank you, Joon. Good afternoon, everyone. I'd like to start by saying that I'm thrilled to be here at Yahoo!, and I'm happy to give all of you an update on the business today. My first nearly 100 days have been incredibly energizing and, honestly, a lot of fun.

Yahoo! is a truly iconic company, one that I've had great respect for since I first discovered it as a Stanford student back in 1994. At that time, Yahoo! was called Jerry and Dave's Guide to the World Wide Web. Even then, it was obvious what an essential tool it was and the incredible potential.

Beyond that potential and its storied history, some of you might ask, "Why did I in particular come to Yahoo!?" In short, this job is tailor-made for me. The core components of Yahoo!'s business, Search, Mail, ads, Mobile, News and the home page are also the core products that I've built my career upon. So my answer is simple. I came to Yahoo! to grow and to help redefine one of the Internet's most beloved companies.

This afternoon, I'd like to discuss my priorities over the past quarter, including our efforts around people and products. Then, following Ken Goldman's review of the third quarter financials, I'll discuss the vision and direction for Yahoo! moving forward.

Let's begin with our people. Companies are all about people, and the companies with the best talent win. It's no secret that our team has experienced numerous changes this past year. From my very first day in July, we've been zeroing in on the efficiency, well-being and accountability of our 12,000 employees. We have a close-knit culture, establishing an open dialogue with employees as well as a commitment to transparency. We've put in place feedback tools, systems that remove bureaucracy, new performance measurements for Yahoo! and clearly laid out quarterly goals for the company. These new systems are working to improve our execution. As of today, 93% of our employees have quarterly individual goals that map to company goals. And of course, one of our company goals is that we will soon be at 100%.

True cultural change can't be bought, so the vast majority of what we've done has cost nothing. That said, we have made smart and thoughtful investments in new mobile phones for our employees so they can test our products and provide feedback. We've also begun to offer what is a standard here in Silicon Valley at top companies and start-ups: free food for our hard-working employees.

Our goals are simple: execute faster, return value to our shareholders, attract the best talent and make Yahoo! the absolute best place to work. In an incredibly short period of time, we have built a stellar, world-class leadership team across all the core functions of the business: finance, sales, human resources, development, marketing and legal. In a moment, you'll hear from Ken Goldman, our new Chief Financial Officer, who brings more than 25 years of experience as a public company CFO to his role. Ken will help lead our financial fitness moving forward.

Henrique de Castro will be joining as Yahoo!'s Chief Operating Officer. Henrique is one of the most respected and accomplished businesspeople in the realm of Internet advertising. With his rigorous and analytical approach, he'll lead our strategy and execution in enhancing our advertising solutions and the value that we provide to our advertisers.

Ron Bell, a Yahoo! veteran with a rich 13-year history at the company and an incredibly deep set of perspectives on the company's products and policies, has been promoted to be our General Counsel.

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