• 
• Some highlights from this interview
• How the Internet can help newspapers
• Yahoo!'s relationship with 60 Minutes
• Is online ad revenue sustainable?

Scott Moore is the head of news and information for Yahoo! Media Group, where he oversees Yahoo! News. He was previously the president of MSNBC.com and publisher of Slate. This is the edited transcript of an interview conducted on Oct. 26, 2006.

[Newspapers and other news organizations gather an estimated 80 percent of the news every day.] But the Internet has been cutting into the profitability of the economic model that supported that all this time. So who's going to pay for it?

I would take a slight issue with your statement about the newsgathering, because the reality is that the Associated Press and Reuters and other wire services actually probably do the bulk of the newsgathering for newspapers.

A local newspaper that runs national stories, international stories, the sports section -- excluding the local team coverage -- all of that is supplied by these news wire organizations. And in the case of the Associated Press, they're actually owned by the newspapers. Yahoo! News and all the other online news providers have significant partnerships with those wire services. We pay them large, several-million-dollars-a-year licensing fees, so we're actually directly paying for their newsgathering infrastructure.

If you're the Associated Press and you have a business opportunity like licensing content you're producing for newspapers and other traditional forms to a new form like the Internet, and [you] make tens of millions of dollars more a year in doing that, you're going to be motivated to do that. And that's exactly what's happening.

But the Associated Press gets to use the content that its members provide as well.

Right.

Which then you get to use. They may repurpose it in some fashion, but --

Well, the Associated Press does its own newsgathering with its own staff of writers and reporters and editors. I believe that that is the largest newsgathering operation in the United States. We'd have to check that, but I'm pretty sure it is. It's larger than any single newspaper. Then the local papers do their own newsgathering within their markets, and they do feed that content into the AP. But the AP doesn't license all that back out to online providers. They haven't done that. So they typically license the stuff, the material, the news that they're gathering and creating themselves.

So what you're paying for is the newsgathering done by the AP's own employees, not all their members?

Right. That's correct, yeah. Now, the members do supply content into it, and that kind of goes in the mix, so there's some of that. But, for example, we do not have a license at Yahoo! to content that's specifically created by the L.A. Times in Los Angeles on that market unless they choose to put it into that feed.

OK. But still, the numbers involved -- whether it's Yahoo! News or MSNBC.com and so on -- are relatively small compared to the size of the newsgathering organizations and their payroll. So in the future you may be able to help pay for newsgathering. What happens in the interim?

In the aggregate, online new distributors like Yahoo! and MSNBC and others are already paying very substantial amounts of money to these news wire organizations. So it's not as though we're not paying them a lot today. And it will grow over time. It grows in conjunction with the revenues that we earn.

“If anything has been proven by the rise of the Internet and that news industry, it's that the appetite for news is only growing. It's almost ravenous.”

But that dynamic is exactly the same dynamic that we were talking about a minute ago, which is that if the audience wants to get their news online -- which they clearly do -- and they're shifting their collective attention to online news providers, then the creators of that news content have no choice really but to follow that audience and to serve people who, like Yahoo!, who are providing a news experience for millions and tens of millions of people every month.

... You've seen this progression over time. So maybe give us a sense of what it looked like to you when you started out and where you are now.

I was kind of a homegrown media guy at Microsoft. I didn't have any traditional media experience. I was part of the founding team for MSNBC.com. That was the joint venture between NBC and Microsoft, which was launched with great fanfare at the '96 Atlanta Olympics. We went live during that time because NBC was broadcasting those and had a huge promotional platform. At the launch event we had 200, 300 press in attendance, with [former General Electric CEO] Jack Welch and Bill Gates via satellite and a bunch of other senior executives from both companies, and they were really beating their chests and all excited about this.

During that event, MSNBC.com literally fell over. It failed. And I had the dubious honor of getting to explain to Bob Wright, the CEO of NBC, just exactly why that had happened and when we were going to fix it.

[How did it fail?]

The Web site was down. You got a 404 error if you typed in "MSNBC.com." That kept going for several hours until we got it worked out. ...

So that was the very earliest days of Internet news. We were kind of putting it together with baling wire and tape. And you know, it was always dicey. In fact, '96 election night, I think all of the major news providers went down. So USA Today, CNN, MSNBC.com -- I'm not sure about Yahoo! -- but anyway, they all went offline because the traffic was so enormous.

One thing that has changed radically since those days is the technology has gotten good enough that that never happens now. We serve tens of millions of people; we serve millions and millions of streams of video every day, and it's constantly growing. It's always sort of an arms race to build out enough servers to meet the demand as it increases. But those operations have become much more stable technologically and much more robust just operationally. That's probably, I would say, the biggest change that I've seen.

Then the other thing, from a business perspective, is back in 1996 there was really no such thing as online advertising. There were just beginning to be these little postage-stamp-sized banners that we would slap on sites, but we were really bad at counting how many we delivered to the audience, or telling advertisers who was seeing them.

The advertisers were very skeptical that this had any value at all. So in the early days we were really kind of making that side of the business up, too, and today news by itself is probably several hundred million dollars in revenue across the Internet. Of course the overall opportunity for graphical display advertising, independent of search ads, is several billion dollars and growing by 20 to 40 percent a year. ...

The Internet and Internet sites have gone through various controversies about using other people's [material] -- Napster, YouTube. Is your decision to make these financial deals with, let's say, the AP a way to trying to get around that problem?

It's actually orthogonal to that problem. We have licenses that we've negotiated with rights holders, and it's not limited just to the wire services. For example, in the last year, we've signed significant relationships or deals with CNN, with ABC News, with the Weather Channel and with CBS News for video content, and we're adding more all of the time. We're going to be announcing a couple more major relationships like that in the next two months or so.

In addition, we have relationships with people like Arianna Huffington for The Huffington Post content. So we're actually pretty ecumenical when it comes to the relationships that we have, and every one of them involves a license. We can't be in the business of making money off of other people's content in a news environment.

Now, that's sort of independent of the phenomenon that happens when people shoot videos and maybe set them to a piece of music and upload it to an Internet site. That's completely different than what our business is or what we do.

That's completely different? But Google got sued by Agence France-Presse? What was that about?

Google did not have a license for the content that they were publishing on their servers. What they were doing is using their search technology to go and scrape content off of AFP's Web site and then display it on a Google page. Now, their argument -- Google's argument -- was: "We're linking back to your site, so we're effectively giving you free promotion and marketing." But the AFP said: "Yes, but if you are displaying ads or even if you're not displaying ads in France, you can't use our content. It's our content; you don't have a license for it. We're going to sue you because you're violating our copyright."

That's not what Yahoo! does in Yahoo! News at all. Now, we do have search technology that does go out and crawl the Web and shows you those links. That's a very well-established practice. The AFP -- you know, in France, the copyright laws are a little bit different than it is in the U.S., but that's because the reason that they filed the lawsuit and pursued that is because they didn't have the license agreement with Google.

Now Google has gone out and done a licensing agreement with the Associated Press. They may have done it with others, too. I think they realized that they had some liability there that they had to deal with.

In some newsrooms, there's a misconception that these sites like Yahoo! or Google are simply taking down material and using it and making a fortune while we [newspapers] go down the drain.

That would be a total misconception if anybody had that in their minds. ...

Why don't you just buy the L.A. Times and save that content-producing organization as part of your operation, and make them more Web friendly, and preserve an institution?

… We don't have to. Well, it's old, and any business that is mature and is kind of, you know, beginning to be usurped by some new technology or some new means of distribution is going to face big challenges and is going to have a lot of hard decisions to make. …

If the newspapers, some people think, are in danger of disappearing, then where do you get your content?

First, I would challenge the notion that newspapers are in danger of disappearing. The L.A. Times, for example, has $1 billion a year in revenue and $200 million in profit. That's not a bad business. They also have virtually no local competition in their market. I think the challenge that they face is staying relevant and growing their audience, growing their appeal to younger people who simply just aren't interested in reading a newspaper anymore.

But they're certainly still interested in news. If anything has been proven by the rise of the Internet and that news industry, it's that the appetite for news is only growing. I mean, it's almost ravenous. Now you can sit there and watch news come over the wires or on your favorite news site literally in real time. And the news organizations who have adapted to that and started taking advantage of it are doing very well. I would point to The New York Times as one example.

The New York Times 10, 15 years ago -- probably even less than that -- certainly did not update their news through the day. They published one or two editions in the middle of the night; they put them on trucks; they got them out to people. And everybody was very happy with that when they got the newspaper in the morning. Well, today, The New York Times puts a little timestamp on their Web site that says this story was posted 37 minutes ago, and this one was 12 minutes ago. They've adapted their business to the opportunity that the Internet affords.

As a result, I think that The New York Times brand has probably grown and become much more valuable than it was a few years ago, because now it's clearly a national brand. The paper of record now is the Internet site of record on some level. And that value, whether it's reflected in the stock price or not, is certainly a value that accrues to the brand.

I was just going to say the stock prices basically have been at an all-time low, and Wall Street is saying The New York Times is in trouble.

Well, yeah. Wall Street might say that, yeah, from the standpoint of an investment, buying the stock. But The New York Times is not going out of business tomorrow or in five years or 10 years. They are in the process of managing through this transition that I spoke of earlier, which is that the newspaper business per se, on a stand-alone business, is not the same as it was in 1967, and it never will be again.

But they realized that, and they've made a lot of smart investments in taking their product and taking their brand onto the Internet, beginning to add multimedia elements to it, doing e-mail newsletters, doing reporting that's specific to the Internet. Over time that's going to pay off.

Now, in the short term, their stock price may continue to reflect Wall Street's short-term view of their next four quarters of profitability. But in the long run, the Internet is where a huge opportunity lies, and those that take advantage of it are going to be just fine.

So when we hear that NBC, which you were once affiliated with, is cutting back on its programs and cutting costs, laying people off, and also what's happening to the news division, we shouldn't get worried, because actually the news is going to expand on the Internet?

Well, I don't know for sure that they're expanding their investment in MSNBC.com. But I do know that MSNBC.com, where I used to work, is very profitable. It's growing at a robust clip. It has an audience of roughly of 25 million Americans a month who are reading it, which is, I would hasten to add, slightly 20 percent less than what Yahoo! News has, but nonetheless a large number. So that's a very healthy part of NBC's overall portfolio.

I think the cuts NBC Universal just announced were much more driven by the declining profits that they can make in their broadcast television operations, not just their news division. They actually did go out of their way to say they're not going to cut back on the morning, like the Today show, and the news magazines in the evening. But they are subject to the same market dynamics.

The Internet is impacting all businesses, not just news. It's also impacting entertainment and the ability for big broadcast networks to make the kind of money that they are used to making.

You're saying that a smart newspaper -- and you're using The New York Times or The Washington Post as examples that are starting to invest heavily now in the Internet -- is not only going to survive but probably thrive?

I think so. And I think there's a good chance they'll actually take market share from newspapers that don't make that kind of transition. I would make a prediction that in the next five to 10 years somebody with deep pockets is going to decide that there's a great opportunity to create local-based news offerings that don't have a newspaper attached to it at all.

In other words, you'd take a pile of money -- not even all that much money in relative terms -- and go and create new staffs in a handful of cities around the country and start creating an online-only competitor to the local newspaper. You wouldn't have the same cost structure as the newspaper, but if you were putting out a product that was of equal quality and perhaps much more attractive and Web-like in its approach, you might take a lot of their audience away. And because your cost basis would be lower, you could make a lot of money on that.

I think that's likely to happen. I think newspapers who do a great job of adapting quickly in their own markets can fend it off. But if they don't, they're going to be subject to that.

So those of us who are used to having a pile of paper in the morning to read with our coffee, they're going to die off, and people will just go on to some kind of either some computer screen or some kind of electronic reader?

[Slate founder] Michael Kinsley used to say that we would know that Slate was successful when you could read it on the toilet. That was kind of the demarcation point for him, was the idea that you didn't have to sit at a desk in front of a computer screen to enjoy Slate. ...

I don't think we're at that point today, but on the other hand, we're much closer to that point than we were 10 years ago, when we were barely able to keep our servers up and when people were dialing into the services over 28.8[K] modems. Just think about how people use Blackberrys today or even cell phones or any number of different devices that are proliferating. If you want to be connected to the news today, it is not difficult to do that and be connected in a real-time way.

Now, I don't believe that print newspapers or that print magazines are going to go away, because there will always be a segment of an audience that likes their news or likes to enjoy the experience of reading a glossy magazine and enjoys that physical, tactile sensation -- just like books actually have benefited from the Internet and really not been negatively impacted for many of the same reasons.

But on the other hand, you will see that the form and the number of offerings that are out there in print are going to change. They're already changing, and they will continue to change. So there will probably be fewer newspapers. There will probably be fewer magazines. But the ones that are able to survive and [offer] both an online and an offline experience for their audience and who are able to keep a loyal audience are going to thrive. …

I interviewed one of [the Los Angeles Times'] reporters on their so-called Manhattan Project, which they've changed the name to Spring Street Project, who says up front, "Our Web site stinks." So if they don't fix that, you're saying they're doomed.

No, I don't think they're doomed. But I think that they will, if they don't fix it, they will underperform what their market opportunity is. You're talking about one of the largest newspapers in the country, with a vast audience, local audience, who's very interested in L.A. and Southern California news. There's no company that's better suited to serve that audience than the L.A. Times. And if they don't serve it well online, then they're just missing an opportunity. That's something that, from a business and management standpoint, they need to address, but it's totally doable. ...

You made a recent deal with 60 Minutes which I found very unusual, being a veteran of 60 Minutes, because they never allow their outtakes out of house. That had never happened before in my memory, until that Tiger Woods case. What's gotten into them?

... Jeff Fager, who runs the operation, is actually somewhat visionary, I think, at least for a big, old-line broadcast news division, in terms of thinking about how to evolve the brand. They know that 60 Minutes, while it is a real crown jewel of American journalism as a brand and as a franchise -- there's no question about that -- but they know that their audience is 55 and up, and that people that are younger than that in many cases either don't know anything about it or never watch it, so it's relatively irrelevant to them.

One of the reasons they were attracted to working with us at Yahoo! is that we have a much younger demographic in Yahoo! News, and so they thought, here's an opportunity to take the 60 Minutes brand and the franchise and its value, bring it online to a younger audience and see if they're as interested in it as we think they may be. So that's what we did.

But in doing that, we didn't want to -- and neither did 60 Minutes want to -- just repurpose the same 12-minute segment that they run on television, plop it online and let people hit "play." That's not a great online user experience. Typically people that are consuming news or other information online do so in a mode that we refer to as info snacking. They'll read a piece, or they'll read part of a piece, and then they'll see a link. They'll follow that link. They'll go read that thing.

Or, in the case of video, I may be interested in the lead story from the nightly news, or maybe I'm interested in the third story from the nightly news, but I really don't care about the first two. Why should I have to sit there and watch those, and then a pod of commercials, before they get to the piece that I actually care about?

Our mode of displaying and offering that content allows the user to go straight to the thing that they want. By taking the content that we got from 60 Minutes and chunking it into two- to four-minute segments and then adding in these outtakes, which had never been seen, we just gave a much richer experience for the audience. And in the case of [Ed Bradley's interview with] Tiger Woods, when we added up the aggregate time spent on an average basis per user, it actually exceeded the number of minutes that 60 Minutes aired on CBS News.

By taking it in chunks and letting people take their own path through the content, they were ultimately consuming more of the content than they would have been allowed, or able to do, on a television broadcast, which is time-limited. ...

Now, is this a financial relationship with CBS, or just a symbiotic [relationship]?

Oh, yes. We have a license agreement with them. We also commit to promoting the content on Yahoo! and Yahoo! News. So it's very much a commercial relationship, yes.

The other interesting thing that we've found in the first few segments that we've run from 60 Minutes is that the average audience that is viewing them online at Yahoo! is 35 years old. So we've actually taken their demographic from 55-plus down to 35, which makes them very excited and happy, because that's an age that's very appealing to advertisers, and it's probably more valuable, frankly, to 60 Minutes and to CBS than the current audience on television. But it's not something that takes away from that current franchise that they have. They know that they need to get younger. Here's an opportunity, and we've proven that we're able to do it, to expose that great journalism to a much younger audience, who then maybe will make a point of PVR-ing [Personal Video Recorder] or TiVo-ing 60 Minutes next Sunday and watching it, because that's pretty much how they watch television. ...

You see a future where Yahoo! might have enough profits to have its own reporters, beyond your one star?

I think it certainly is possible. We could today, if we chose to, and we do have a couple of projects -- Kevin Sites in the Hot Zone -- and we have another project coming out in January that's called Odd News Underground. It involves a journalist who also writes songs. So it's a singing reporter, if you will, and he will be covering a number of very interesting, sort of eccentric subject areas.

We will experiment a little bit, and we will innovate where we can with journalism. But we really don't need to go out and hire an army of reporters, again, because we are able to license that content from partners who are happy to have us distribute their material and pay them money and make their brands more relevant, younger or appealing to younger audiences. ...

There's no question that there's more things that are called news over the last 25 years, whether it's on cable or digital channels or on the Internet. But what about quality? Just because you call it news doesn't mean it's information you can believe.

Sure. Well, I think you could apply that filter or standard to broadcast news, to cable news, over the last few years. I probably watch cable news in the evening once in a while. I wouldn't really call that quality journalism for the most part. Few exceptions. But anybody who wants to know the news of the day by 6:00 at night in whatever time zone they are, they already know it, because they've gotten it off the Internet.

There are many choices for them on the Internet. Anybody who puts out a low-quality news product online is not going to be around very long, because there are too many substitutes out there who are high-quality, and the cost of switching to one of those is the cost of clicking your mouse or typing a few keystrokes in.

You've said that your strategy for Yahoo! News is advertising, advertising, advertising.

Right.

Ad revenue, even at Google, has got its ups and downs.

Sure, right. Well, what I meant by that is if you think about our business in a meta way, we're in the attention business. The more attention that we can aggregate across large audiences, the more minutes that people spend on Yahoo! News, and the more people who spend those minutes on Yahoo! News, the more advertising opportunity we have to sell to companies that want to reach those people.

Advertising is proving to be the driver in the business. There have been a few experiments with subscriptions, but for the most part, they have failed miserably, because there's too many people who are willing to put a product out there or an offering out there and not charge for it, so that if you are trying to charge for it, you're at a huge disadvantage from day one. So really, I think that even though you're right, you have the vagaries of the advertising market going up and down with regard to publishing on the Internet. That's just a reality that we have to deal with today.

Now, a big company like Yahoo! that has many different businesses can diversify its revenue streams enough to offset some of that cyclical nature of the business. But even broadcast TV networks and print publishers, magazine publishers, are extremely dependent on advertising. ...

Kevin Sites, the number of hits to this -- or people who came to this Zone, this Hot Zone -- as I understand it, was somewhat disappointing for Yahoo!

I wouldn't put it that way, but --

It wasn't as much as you expected.

Actually, that's not really true. I had expected that we would have an audience of 2 million people a month, that that would constitute success for the project. Our internal numbers are that we have that size of an audience. Now, there's external numbers that show it more like a million or a million and a half for various reasons that are too technical and boring to go into.

"External numbers" -- you mean the outside rating agencies.

ComScore, Nielsen, NetRatings -- yeah, the rating agencies. There's always a sort of discount on the numbers, probably because they don't capture international usage, and Kevin's content, by its nature, is very appealing to people around the world.

But an audience of 2 million people a month for anything is quite significant. That's larger than the circulation of any newspaper in the country outside of USA Today. That's about the number of people who watch The Daily Show [on Comedy Central]. Actually, that's more than people who watch Jon Stewart on The Daily Show. So Kevin clearly established a brand, and the amount of investment that we spent to do that was really quite small.

But the point of that project was really not about how big of an audience can we aggregate. I mean, international news and coverage of war zones that don't directly involve U.S. troops is always kind of a tough sell in the news business, always has been. We did it because we felt those were important stories that needed to be told. We thought that Kevin had a unique point of view and a unique ability to go out and tell the stories in a way that really had never been done before, and in a way that was totally facilitated by technology. ...

These numbers are relatively imprecise, right, for how many people are looking at a site for how long and which service, right?

No, not really. I mean, it's a complex issue to get into. But one of the benefits of publishing online is that, because we're using computers that can track every single activity or interaction that happens with a user, we can count very accurately the number of pages that we serve, the number of users that come and visit us. We can't always track exactly where they are. In some cases we can; in some cases we can't.

But there are third-party ratings services out there who use a sample, just like they do for television. They have a panel of several thousand people. They have software installed, and that software tracks those people's usage. Then they take that sample data and they extrapolate it up to an aggregate number for United States. There's no way that a sample's ever going to be exactly accurate. And because our internal data includes international as well as U.S., there's always going to be some discrepancy.

But it's not that it's imprecise; it's just that you're sort of comparing apples and oranges if you look at internal numbers versus what's done with samples by a third party.

Advertisers are confident in it?

Yes. And then the third-party reporting is very important for establishing credibility with the advertising business. So, generally speaking, we only quote third-party numbers. When I tell you that Yahoo! News has an audience of 34.5 million Americans for September, that's a number that has been validated by comScore as being true.

Now, just to follow up on that, but we know that we have actually north of 50 million users that are actually coming into the site. But that would include people outside the U.S., and it would include -- there's some discrepancy between what they've extrapolated from their panel and what is actually true. …

Is there an inflation, to a certain extent, in how many people come?

No. Actually, it's the opposite. The numbers that are reported by comScore and Nielsen are conservative rather than overinflated. It's very important for the industry that we don't overinflate numbers and give people the wrong impression.

So you're not going to have any ABC [Audit Bureau of Circulation] circulation scandals like certain newspapers have had?

No, I think we're not vulnerable to that in the same way at all. We also don't have the disadvantage [they have] in television, where they have a sample that says the audience for a certain program was a million, but it doesn't capture how many of those million people surfed away during the commercial to another place and never saw the commercial. So we don't have that problem.

You can't TiVo out the commercials on Yahoo!?

Well, not today, and hopefully that won't happen anytime soon.

It could.

It could. It could.

And then you would be in a technological bind.

Exactly.

What's good for the goose can happen to the gander.

It's the nature of this business. Technology is disruptive and constantly evolving and changing. I have no doubt that at some point Yahoo! News will find itself in a position where a new technology or a new distribution means challenges our core business and the assumptions that we've been operating under. Then the challenge will be, can we adapt to this new thing, or do we go the way of buggy manufacturers? That's just the nature of the business.

But right now, the revenue from news, in terms of Yahoo! as a company, is a fraction.

Sure. Of Yahoo!'s overall revenue, yes, absolutely.

If someone were to say to me it's in the $100 million and $200 million realm, because I know you can't tell me exactly, would that be off base?

That would be a little off base, but not wildly so.

And when you were talking before about profits, I know I was talking with the CEO of one of the newspaper chains that has actually gone much more into the Web. … What he said was their revenue from the newspapers they have were about 20 times that of their Internet side.

Yeah.

But the margins are at least twice on the Internet.

Right.

That they were making more than 30 percent profit.

Right.

Is that basically standard through the industry?

Well, yes. I think the margins on Internet media in general are substantially higher in the aggregate.

Now, there are local differences on that. But in the aggregate, they're higher, because our cost structure is substantially lower than traditional publishing. That's one of the reasons why the technology of the Internet and the ability to distribute digital content very inexpensively makes going into these businesses so attractive. But to that point, if his offline business is 20 times the size of his online business on a revenue basis, but the online business is twice as profitable, then that really means that on a net profit basis, his online business today is 10 percent of his profits relative to the other side of the business.

Over time, that's going to continue to grow. And those sorts of numbers and that dynamic is a pretty good argument for continuing to invest in the growth side of the business.

Craig Newmark of craigslist, he feels kind of guilty, because he likes news, he likes newspapers, but craigslist is taking away their financial base, as has Yahoo!

Fair enough.

Feel guilty?

Not in the least. Craigslist is sort of a very interesting case, because Craig is not really known as a rapacious capitalist, to say the least. He, I think, saw an opportunity and just wanted to help people be able to exchange business services online. Their site is bare-bones in terms of its design and in terms of the amount of investment that they've put into it. But it serves a need. It serves a market need in a way that is very seamless. … I found two apartments in L.A. on craigslist. I also had tried to use the L.A. Times classified section and found it just unusable, because it was very confusing. I couldn't figure out which listings were from brokers versus people that owned the homes or whatever, and I was able to find places on craigslist very, very quickly.

Now, the dynamic of craigslist being free certainly does blow a hole in one of the key revenue streams for newspapers. But that's, again, an example of the creative destruction that happens when technology evolves to the point where it impacts an existing business model. I would venture to guess that the L.A. Times probably enjoyed a virtual monopoly on classified advertising five or 10 years ago. That is gone. That is just the reality of the nature of change in business and technology.

Yahoo! News is taking advantage of some of those same dynamics. But on the other hand, we have classifieds and businesses, too, where we do charge people. So Craig is having an impact even on our business now by --

So craigslist is undermining Yahoo!?

Well, yeah, at the margin, in certain categories, sure. I think you'd have to be very aggressive and bold at this point to try to go into, say, a housing classified service that you were going to charge people for. You'd either have to be very local and very good -- and there are examples of that where, by virtue of the fact that you know lots of people, you can get the best listings, and so you can charge the users, because they have the best listings -- but other than that, the free price is the market clearing price at this point for many forms of classifieds. ...

And then, finally, when you hear the criticism, which I'm sure you have, or read the criticism of, let's say, Yahoo! News or the Internet news phenomenon from us old-timers, what's your reaction?

Sort of amusement. I think that it's time to get with the program. It doesn't make me feel defensive at all. Anybody who has those sorts of feelings should ask their children or their grandchildren how they get their news. How do they communicate with their friends? Do they have a profile on MySpace? Or what other things do they do? How do they spend their time when they're goofing off?

I think you'll find that largely and in growing numbers, they're spending it online and doing all kinds of things on the Internet. Well, news is just one of those things that people do in the Internet. I actually view our mission at Yahoo! News as being to provide the highest quality news experience that we can to as large of an audience as we can, and that is a mission that we take very seriously. The value of journalism hasn't changed, and it won't change. People value quality reporting. They want to know what's happening in their world and in their local areas. The Internet is just a new means to deliver that same high quality that they're used to getting in other forms of media. ...