 Good morning here in Davos, Switzerland, and around the world. My name is Eric Schatzger. I'm an anchor and editor-at-large at Bloomberg Television. Welcome to an insight and idea with Marissa Meyer, the CEO of Yahoo. Marissa, good morning to you. Good morning. If I'm not mistaken, this is the first such conversation you've had since becoming CEO in July. Is that right? That's right. Well, I must thank you. It's an honor, both for me and for the World Economic Forum. We're here to talk about the future of technology. So let's begin with the one nut that nobody seems to have been able to crack, the platform shift from desktop to mobile. How do you crack that nut? Well, I think that one is really important. If you look at what's happening in terms of the shift to mobile, the number of mobile phones and smartphones in the world has tripled in five years. Tablet sales will outsell laptops this coming year if predictions hold true. So it's really incredibly important. And there's a lot of consumers overall making this shift. So one is understanding how these devices work, what they really provide for, and how we can best meet users' expectations. And then, of course, the other piece is monetization. And that's the nut. There's all kinds of really interesting applications that exist on the phone. The real question is making money from it. And I have a lot of faith and confidence that whenever you see a consumer shift of this type, that there will be a very interesting value-added way for it to create a monetization around it. Where does that confidence come from? Well, it was sort of the bane of my existence from about 1999 to 2004, was that at the time I was at Google. And for about five years, every time I interacted with anyone externally, the one question they would ask me is, you know, search is wonderful. It's so great to be able to find everything that we can find. It's just wonderfully academic. How is anyone ever going to make any money from it? And now that seems almost absurd, because search is one of the giant moneymakers, not the giant moneymaker online. But that said, whenever you see consumers adopting a technology, a platform, a particular application like search with this much volume, you know that advertisers will want to participate in that. And there's usually a way where you can introduce advertising such that it's not intrusive, that it actually adds value to the end user, and that it actually enhances the experience. And that's what we need to work on. Well, we can look backward now and see how that was done with search. Everybody gets to play Monday morning quarterback and feel smart about it. Can you tell yet what some of the shifts will be in mobile that will allow mobile to duplicate the success of search as a moneymaker? Because it has to make money, or else at some point, innovation will grind to a halt. Well, I think people already are. For example, the application store, there's a lot of people who sell applications. So there's some monetization there. I think the big thing is search is a daily habit. And what people do on their phones often become daily habits. It was interesting for me when I thought about the strategy for Yahoo, I pulled the list of what people will do on their phones in rank order frequency. And if you ignore a few exceptions, the things that are gonna be done by the carriers like voice and text and maps, because I know from my former life that it was really, it's really expensive and hard to do right, the list looks like email, check the weather, check news, get financial quotes, check sports scores, play games, share photos. You get the idea, and it was funny because I would go and I would recite that list in the context of being the new CEO at Yahoo, and I would say, what am I doing? And my friends and family would say, well, you're describing Yahoo's business. I said, no, actually what I'm doing is I'm listing in frequency order what people do on their phones. So the nice thing at Yahoo is we have all of the content that people want on their phones. We have these daily habits. And I think whenever you're dealing with a daily habit and really providing a lot of value around it, there's an opportunity not only to provide that value to the end user, but also to create a great business. To your point, search remains one of the defining experiences for most internet users. Whether we call it search, whether we call it content discovery, seems to me that it will remain the way you described it, fundamental to what we do. How do you see it evolving? Well, I think that all of the innovations that you'll see in search will be in the user interface layer. So if you look at the past few years, there's been universal search, the notion that search won't always be text based. You can get videos and images, instant search, so when you're typing, the fact that it's very speedy and responsive, voice search, the fact that now, something like a quarter to a third of searches are done by voice on the phone. So all of those types of things are what we're gonna see evolve in the future. And I also think that there is a huge opportunity in search around personalization. Understanding what do I know already, what are my preferences, and how to present the information. And I think that that extends beyond just search, but broadly to discovery. If we can think about how do we take the internet and order it for you, there's all these news feeds all over, all over the web that people will check, Twitter, Facebook. And the question is really, what order should people read things in the morning? What should they look at? How should they do that? And to really do a great job in that kind of discovery mode, in addition to search, you need a terrific sense of personalization. Well, personalization then, in some respects, replace search that once the computer, so to speak, figures out what it is we like to look for, it'll just look for it on our behalf, and we won't have to go and do it any longer. I think the right way to think of it is it's not that it replaces search, but it becomes a critical part of search. I think one provocative way of thinking about it is in terms of a lot of people will say, well, when you type into the search box, that's your query. In the future, you become the query. It's what you typed, it's your background, it's where you are, it's your preferences, it's what you looked at yesterday, and the search box can take all of that as the input and come up with a set of results that are customized for you. And the nice thing is, if you're the query, one, you could actually explicitly type in search terms, or you could just be the query passively. This is the notion that if we can pick up on your context, who you're talking to, where you are, can we actually provide useful information or a series of links, pictures, videos that are actually more useful in your current context because of that context. That sounds exciting, but right now, the web for most of us is still a very managed, curated experience. How long does it take before we get there and what are the key enabling technologies going to be? Sure. I think it's probably gonna happen in the next three to five years. I think that a lot of what we've seen happen, image recognition, voice recognition, translation, these were all backbone technologies to really being able to understand context. Now it's a matter of being able to take the personalized notions that people have already been expressing online, things like likes on Facebook. What do you tweet? What do you pin on Pinterest? What articles do you click on? Taking all of those little signals and mapping those to understand that when, for example, I like clean energy on Facebook and I tweet out something about green energy, that's in fact the same interest of mine. Are different companies going to do it differently or is this the kind of thing that everybody's going to have to move in the same direction on? I think that different companies will do it differently. I think that one of the key pieces here is you have to understand and decide what the ontology of entities is. Explain that. Meaning, how are things named? How are they organized into hierarchies? So, for example, you need to know that Wisconsin is a state and that there are cities inside of it. I'm from it, so if I say that I like Wisconsin, that there's a whole bunch of interest that cascade off of that. And so you need to understand that hierarchy of objects, but you also need to be able to understand how they relate to each other and synonyms, deduplication, things like that. Does this personalization then become the way that you described it as somehow complementary to search? Does that create a new paradigm? We talk, or at least the most recent thing that any of the large internet companies has come out with is this social search that Facebook has introduced. Is that a stepping stone along the way to what you see? I think so. I mean, there's the social graph which is really important and very fundamental. But I think what I'm talking about in terms of personalization, it will give way to the interest graph. What is that? The interest graph is the set of things that I'm interested in. And if you know the set of things that I'm interested in, you know the set of things other people are interested in, you can create connections between people that aren't just based on whether or not they went to the same school or worked in the same place, but are actually based on are they interested in the same things? So for one, we can create very powerful personalization technologies because we can see what other people who like the same things or are interested in the same things that you are doing and provide you the same information through things like collaborative filtering. But there's also a very powerful social component there because we can show you interests you may have in common with people you didn't realize. You know, for example, I recently found out that Reed Hoffman, the founder of LinkedIn and I both had the same major at Stanford, symbolic systems. So you know that you can see these kinds of things in the interest graph. But you can also find people who you maybe have never met but really should know because you have so much in common with them. It would seem to me that it's a pretty high bar or at least the barrier to entry to the interest graph is pretty high. You've got to have as a company, as a platform, a fairly broad and deep level of user engagement, don't you? That's right. And we're, I mean, we're really very lucky at Yahoo because we have the homepage. We also have finance and sports and games and news and, you know, things like OMG, you know, which is celebrity news. And so there's a lot of different verticals that we play in and then also very broad applications like search and mail. Does the interest graph have the potential to disrupt sort of the paradigm for tech power that was in some respects, if not set coined by your old boss, Eric Schmidt, the four horsemen, Google, of course, Apple, Facebook and Amazon. Could the interest graph or perhaps even something else change that order of the universe? Well, I mean, I think all four of those players do a really terrific job providing a lot of great experiences for end users. And so I think that all four of those people will become major players in the future. I think that the piece that the four horsemen analogy misses is that there are other players in the space. I think, for example, Twitter is very exciting and very interesting. And I do think that technology isn't stagnant. It's, you know, amazing to think about the different waves of the internet and technology, right? You know, the first wave really was Yahoo itself, the directory, there's these pages out there, how do you organize them? And then the web got so large that the directory model broke down and gave way to search. And then, you know, the next wave came with social. And now I really think we're on the mobile wave. And so, you know, and you think about that, that's all happened in about, you know, 15 years. Right, we've gone through four major technology shifts in terms of who the main players really are. And so I think that there's always opportunity for new disruption. And I think that a lot of this will be around interest, but that's just my prediction. So we shouldn't, as consumers or in any other role that we may occupy worry about the control that certain companies may exercise over the internet itself and the information that it contains? Well, I mean, I think that privacy will always be something that users should consider. But I also think that privacy is always a trade-off because when you give up some of your personal information, you get some functionality in return. And so it's really about making those trade-offs in a very informed way, which really comes around, you know, for me, the core principles of privacy online are transparency, choice, and control. Tell the users what information you have and how you use it. Allow them to control what information you have. And choice, do they want to use the service in a personalized way that involves that information or not? And so I think those are really the big three components of privacy online. And I also fundamentally believe that user data belongs to the end user. You do? Yes. Because clearly, you know, the question of control is the one that gets people most exercised. How do you ensure, how does any company that participates in this space, this industry, whatever you want to call it, a, guarantee that that remains the case and provide users with enough confidence that the information that they share isn't being abused? Well, the second part is all about transparency. You know, what searches do you have and exactly how are they being used? And so, and I do think that that's something that is really important. I think that there will be industry standards that arise in terms of really providing users almost an account statement. You know, if you look at some of the various dashboards around data that exist on some of these primary platforms, they really, what they really show you is what data do you have stored there and how is it used? And I really think that one of the key pieces here that also provides for a lot of user choice is making sure that the data is portable, that there are standardized formats which really allow your barrier to switching providers or switching carriers to be lower. So, you know, one of the analogies I'll use is, you know, papers you wrote in college. Are they yours? Absolutely. I feel like they are. What if, you know, so now think about... Even if nobody else is interested. So now think about the searches that you've done over the past 10 years. Not nearly as coherent, not nearly structured, you know, in eloquent prose, but just as insightful in terms of they were your thoughts, your words expressed your way and they tell a lot about what you know, what you've learned. And I do believe that fundamentally they're yours and if you can take that history, pick it up and move to a different search provider or take that as an interest graph in and of itself and apply it and use it in a different application, that's something that should fundamentally belong to you. You're allowing the service to access it in order to get better information and better results and they need you to deliver on that promise or else you'll take your data and go elsewhere. Well, that raises an interesting question. Should you be able to take all of that data and it sounds to me like, depending on how deep your level of engagement, it could be a great deal and move it from one platform to another, is that possible? It's generally... I can see, you know, one platform being resistant to the idea of my taking all of what I've got and moving it to somebody else. It's certainly technologically possible and a lot of the players are providing for things like that. It's not something that's generally, you know, something that people think about doing every day, but it is an option and I think that it's an important one. I can give users a lot of confidence in terms of how things are handled. You described a couple of months ago how one of your employees asked how Yahoo's going to compete if it doesn't have one of these four key distribution technologies. There's the mobile operating system, mobile hardware, the browser and social. I don't know that we got an answer. Yeah, it was always funny because one of our employees at one of the company meetings asked that and they said, you know, given that we don't have mobile hardware, mobile OS, a browser or a social network, how are we going to compete? And it's not just a question for Yahoo, clearly it's a question for every company that seeks to compete with those others that have those key enabling technologies. Sure, and you know, of the four horsemen of the internet to adopt that analogy, almost all of them are playing in one, if not several, of those medium. But I think that the big piece here is that it really allows us to partner. Yahoo's always been a very friendly company, has always been, because of our focus also, not in addition to technology, but also on media, it ultimately means that there's really an opportunity for strong partnerships and that's what we'll be focused on. So we work with, for example, Apple and Google in terms of the operating system. In terms of the social network, we have a strong partnership with Facebook. And so we're able to work with some of these players that have a lot of strength in order to really bolster our user experiences that we offer on the Yahoo site. Is that Dicast, you talked about this new graph, the interest graph, is that the kind of technology that will become key to distribution? Well, I definitely think with the web becoming so vast, there's so much content and there's so much social context. And now with mobile, there's so much location context and activity context. How do you pull all of that together? And the interesting way to take it is to say, okay, we're gonna use some of that information, your personalization, your context, what you've done, all that to actually make sense of the content. It's really the internet ordered for you. Which is interesting because it actually brings Yahoo back to its roots. Used to be that that's what Yahoo was. It took the internet and ordered it up. Now it's so vast that you can't just categorize anymore but could be provide a list of information, a feed, if you will, of information that is ordered, is the web ordered for you. And it's also available on your mobile phone. Some of those technologies remain tremendously competitive. There's competition in the browser world. There's certainly incredible competition in the mobile hardware world and in the operating system world. What about social? Is the war for social over? I think that Facebook provides an amazing platform. And so I think that it will be one of the predominant platforms if not the predominant platform. But now what happens with social is what you do with it. It's not just about writing down who your friends are. It's actually about taking that and finding useful content and telling me, hey, you know, you're in Davos right now. Do you know who else is, right? And being able to offer me the opportunity to opportunistically meet up with someone who I didn't know would be here. There's a natural conflict isn't there in the world of technology between innovation and execution. We see many companies struggling with it. Can both be done well at the same time? It's funny because it was pointed out to me a few years ago that one hypothesis is that innovation, if you think about what's the opposite of innovation, a lot of people will say, well, it's the status quo. It's stagnancy. And there's another school of thought which says that the opposite of innovation is execution. That if you have to be in heads down execution mode, it's very hard to find the space to innovate, to have those new ideas and to pull things in. And I know that for us at Yahoo right now, this is going to be a great period of execution. Can we take these products that we have and revitalize them for the web and also make the transition to mobile? And while we're doing that execution, will there be room to innovate to say, hey, this is how Yahoo groups worked on the web, but now there's all these new opportunities in terms of how group communication should work on the phone. Can we actually spot some of those innovative ideas? And I think there is, but it's hard because I do think that they are natural opposites. Is size a barrier to innovation? I don't think so because I think that it has to, if you can innovate at scale and with large size, but you have to be very principled about it. If you have, say, 10 engineers and you're going to grow that to be 20 or 30, do you want to be doing the same set of things two or three times better or do you want to be doing two or three times more things? And in terms of really, you know, interestingly in terms of execution, this is a great example of why there's so much opposites that if you really wanted to execute perfectly, get the design exactly right, really work through all the details, you'd invest two to three times as many people per project. If you want to find those new ideas, those far flung ideas, those things you might not otherwise find, you want to take those same people and put them on something that's far flung that you've never thought about. And so it really is that there is this tension. So I think that you can innovate at scale, but you need to save room to have small teams working on those far flung ideas. So share with us a little of your experience over the past few months. You arrived to an innovative company, but perhaps there was too much going on, wasn't disciplined enough to the points that you were just making. What have you focused on? What are you most excited about when it comes to innovative technologies, particularly the ones that you have some control over? Well, I was really overall just genuinely pleased and surprised. I knew that there had to be great people at Yahoo. The same way that when you sometimes look at art, you can tell if it was created by a nice person or not, or a depressed person or not. Like when you feel Yahoo's products, you can tell that there's really nice, very smart, competent people there that have a great time. And it's true, it's a great company overall that has a very fun culture. And for my first few months, my focus really was on people. Because I believe fundamentally that technology companies live and die by talent. And that's why when people talk about the talent wars, it's not really that some of the companies that are in the talent wars are that competitive with each other. It's just that when you start to see the best people migrating from one company to the next, it means that the next wave is starting. And so I got very focused on people, building the right team, particularly the executive layer, but all through the business. And also the overall environment. And part of that was because I wanted to make sure that Yahoo is absolutely the best place to work and that people really want to come and work there because that will help with the talent piece. But also because I believe that really strong companies all have very strong cultures. And Yahoo's no exception. It's been a very strong company for a very long time. It's got a strong culture. It's different from every other corporate culture. Each has their own unique and individual flavor. And I really wanted to find a way to amplify it. Isn't amplifying it? That's how you find the energy. And the energy is what you can harness into that innovation and say, okay, if we have people and they are really excited about what they're working on every day and they realize that the next big hurdle is mobile, you can take that energy around the culture and find fun ways to apply it that can be really impactful for end users. What are some of the things that you found that we're going to see over the next few months? Well, I don't like to talk about things before we do them. But I do think that a lot of the keys are what I've already talked about. I think that there is a real opportunity to help guide people's daily habits in terms of what content they read. And that's something that we're really working on. I think that all of these daily habits, news, sports, games, finance, search, mail, answers, groups, these are the flicker. These are the types of things where we've really been under-invested in them. And a little love will go a long way. Turns out, I learned the other day that Yahoo! Groups, which I remember using really pervasively back in 2001 because I was friends with the founders, it hasn't been refreshed in like 11 years. So it will go a long way if we actually start to modernize some of these products. So basically identifying what are some of these key technologies? And I do think that the user-generated content component is something that Yahoo! very much pioneered with things like Yahoo! Answers and Yahoo! Groups. And Flickr, for example, was one of the first social photo services. Now a lot of people think a lot more about user-generated content and video, which is also really important. But going back to some of those roots of saying, okay, now that social really allows everyone to be a publisher. And for you to find interesting questions to answer, find topics where you're a domain expert and write about them. And for your friends and others who know that you're an expert in that field or know you to come and find your answer, I really do think that there's something very powerful that we can unleash there in terms of the content that we can surface for end users and its utility. How about elsewhere in the world of technology, whether it's at big companies or little startups, what other innovations excite you? Oh, I don't know. I think that there's so many things. This is a question I like to ask people. And the one answer you never want to give is, oh, I'm very discerning. There's nothing that good out there. I mean, I'm a kid. I think there's like amazing things that you get to see all the time. There's all kinds of amazing technologies on mobile. When you think about, for example, just what it means to be location sensitive. Location is something I've spent a fair amount of time in the past few years thinking about. There's all kinds of really terrific technologies there. Some of these are very basic in terms of things like being able to check in. So there's four square, but if you actually know where people are and where they check in, there's all kinds of interesting and sophisticated things you can go on to do. So I think that there's amazing technologies like that. But even branching out from, say, the mobile technologies and desktop technologies, there's just terrific things happening overall in the world of biotech in terms of being able to do DNA analysis, analyze and help infertile couples actually do a better job selecting children and embryos to implant because you know whether or not they have problematic mutations. There's a great company I know of there called Netera. There's an amazing company that's working on wireless power. This is the thing of Atlas shrugged. Can you have an automated energy machine? But it actually can happen. They actually think that you can send energy using waves. You have to be pretty close. But just think about what that might mean in terms of all of us running around and plugging things in. You might just need to get close enough to the router that you can pick up on the power. And what that could do for the world of advertising, if you know, for example, this sign at the bus stop that's lit up from behind actually had wireless power behind it, you could sit there at the bus stop and charge while you're using your device. It would be pretty amazing. So there's all kinds of really exciting new things that people work on every day. When people get excited about technology, they often forget about the role of design. Apple taught us. Apple changed the way that many of us interact with technology, interact with the internet itself, and that maybe form can be as important or perhaps more so than function. How much do you think about that? How important is it to what you're doing? Well, I think about design a lot. I think that Apple is obviously the gold standard, but I think that in that, you know, Apple's philosophy really is that the design and the technology itself should fall away. And I think that's really true, that a lot of these interaction technologies become really powerful when they do just fall away. I think that the amazing thing about tablets, you know, the fact that you can just flick and get rid of things and switch from page to page, you know, the pinch, the zoom, these are things that are so intuitive that you actually can see small children, you know, begin to use a tablet. You know, there's terrific, you know, videos that parents, proud parents will upload showing children that before they can even learn to talk, they know how to turn the page and flick things on iPads. And they can navigate within videos to their favorite part. They can't even express why they like that part, but they know how to get there using the gestures on the tablet. So, you know, but what's really powerful about that is it uses the natural paradigms that people already have embedded in their minds, that are somewhat innate to us, and they allow it to be the way that we use this technology. And I think that that's incredibly powerful. And so that's overall what you really want to have happen, is being able to whittle away the technology such that all of the complication lies underneath, right? Just like an iceberg, you know, it's just that thin little layer that you interact with. I think that's one of the reasons, for example, why voice recognition is so, so it has taken off to the degree that it has, and why Siri is something that is so interesting for people, is because this notion that you could just talk, right? You could just say what you're thinking and transcribe an email or transcribe a text or transcribe a search. That is just the way that you navigate and have every day of your life, and now there's this whole set of technology and supercomputers that just with your voice, you can actually have do what you want them to do. Is that to say that a level of curation, that something akin to a walled garden isn't such a bad idea and may actually be necessary? Well, I think that there is a clear tension there of, you know, open systems versus closed. I do think that the application system that exists in iOS and in Apple is very curated, but absolutely beautiful, and you can tell that the reason I don't think that that's such a bad thing is because it's really raised users' expectations of design, where people didn't, I think, used to think about design or appreciate it that much. The fact that when you see something that's really beautiful, it does create a lot of respect for it, and I think that one of the reasons why Apple has garnered so much praise for its design is that it's made sure that, for example, the entire ecosystem of applications on that platform work and perform just beautifully, and that when you notice that, you start to realize the role that design really plays in your everyday life. Marissa, I want to thank you on behalf of the World Economic Forum for this opportunity and insight and idea with Marissa Meyer, the future of technology. Thank you. Thank you. Thank you.