Semel: It’s the Ads, Stupid!

Reading today’s NY Times business section and found a piece by Richard Siklos about Terry Semel, the chairman of Yahoo.

“Mr Semel’s first big decision–and probably his shrewdest–was to make advertising its mainstay business. At some of his earliest meetings at Yahoo, Mr Semel recalled, some executives were advocating that the business instead pour its efforts into trying to extract monthly fees from its registered users.

‘He was very early on thinking ‘if we can keep users growing and we can keep growing usage, we will be able to monetize this and we will be able to create value,’ said Mary Meeker, the Internet analyst at Morgan Stanley. “It sounds like Mom and Pop and apple pie, but it was something a lot of people didn’t get in 2001.

Mr Semel and his Yahoo! colleagues are most eager to encourage their registered users, who represent roughly 40% of the one billion people now online globally, to create their own content…the features where people swap information such as Flickr, and, where people swap bookmarks, are keys to a fast emerging media market.”