The last 13 weeks have been a remarkable time here at Yahoo!. We’ve been living under the microscope in a way we never have before. There has been greater attention than ever on our strategy and our ability to execute against it. Some even questioned whether Microsoft’s unsolicited proposal would distract us from our mission, just as we were beginning to really push the pedal on our strategy.

Those people underestimated the determination of Yahoo!’s incredible people, spirit and culture.

Our first quarter was probably one of the most exciting quarters in our history in terms of delivering innovative products and services that really move the needle and make a difference for our users and customers: Acquiring Maven Networks. Launching Buzz, OneSearch 2.0, voice-activated mobile search, video on Flickr, Shine. Previewing AMP! from Yahoo! and SearchMonkey. Adding more Newspaper Consortium members. Establishing our New R&D labs in India and Israel. Our first quarter results proved that we have the right strategy, a fantastic team, and that our investments are starting to pay off.

All of this reinforced our board’s position that Microsoft’s offer undervalued our unique global franchise.

So, what’s next? With Microsoft’s withdrawal, we’ll be better able to focus our energy on growing our industry leadership and maximizing value for stockholders. We’ll continue to execute on our plan — making your Internet experience as personal, relevant, open and social as possible, serving advertisers so well they insist on working with us, and opening up Yahoo! in a way that developers dream of. And, we’ll also continue to pursue strategic opportunities that position us for long-term success.

Has this experience changed us? Of course, it has. We’ve emerged a stronger, more focused company with an even greater sense of purpose. I’m so proud of how this company has come together, put the noise aside, and showed the world that we have the resolve and determination to thrive in challenging times.

We know the spotlight will probably stay on us for a while. That’s fine — we have a clear path ahead and momentum to build on. And thousands of dedicated Yahoos around the world who have held up well to scrutiny. It’s now up to us to show what we Yahoos can really do.

By the way, I’m sure you’ve all read or watched the news about this. Frankly, there’s a lot of nonsense and misinformation in what’s being reported. Just so we are all clear, here’s what happened. The board took its mission very seriously. We clearly indicated to Microsoft that we were open to a transaction but only if it were on terms that fully recognized the value of Yahoo! and was in the best interests of our stockholders.

No one is celebrating about the outcome of these past three months… and no one should. We live and work in a competitive world and the Web is only going to get more competitive. Executing on our strategic plan is what matters most.

Finally, I’d like to thank the many of you who so passionately shared your support for Yahoo!. That’s what brings it all home for us.

Jerry Yang
CEO and Chief Yahoo

“Using technology to make the world a better place.” That was the theme of remarks I made yesterday at Georgetown University, where I had the chance to honor the research of Irene Wu, the inaugural Yahoo! International Values, Communications, Technology, and Global Internet Fellow. Irene’s work is part of a partnership we created with Georgetown a year ago to study the link between international values and Internet and communications technologies.

Our goal is to inspire scholars to explore new ways to use technology for good, particularly in navigating the complexities that go hand-in-hand with the shrinking globe that the Internet has created. These are complexities we at Yahoo! are well familiar with. While we’ve been at the forefront of opening up new communications and information frontiers for citizens of the world, we’ve also seen the challenges that come when these technologies are used by governments for other purposes – those that run counter to our values.

Although our challenges have been widely reported, the full scope of efforts we’ve been making to address freedom of expression and other human rights issues may not be as well known. So I thought I’d take an opportunity to set out some examples:

• Industry Code of Conduct: We’ve been working with industry counterparts, academics, human rights organizations, and socially responsible investors to develop a code of conduct that would guide leading global technology and communications companies operating in challenging markets. We hope to announce the results of our collective efforts in the near future.
• Academic Fellowships: In addition to the Georgetown Fellowship program, we also initiated the Yahoo! International Journalism Fellowship at Stanford in conjunction with the John S. Knight Fellowships program. It focuses on journalists from press-restrictive countries, allowing them to withdraw from their environments for a year of study. The first fellow came from Pakistan and this year’s fellow is from Zimbabwe.
• Human Rights Fund: Recognizing the plight of unfairly imprisoned political dissidents, we established a Human Rights Fund last month to provide humanitarian and legal support for these individuals and their families. We’ve partnered with noted human rights activist Harry Wu, who spent 19 years in a Chinese labor camp, to administer the fund. It will also support educational efforts on human rights. We’re so grateful to have Harry’s partnership in this.
• Policy Dialogue: While we’re committed to advancing human rights globally, there are practical limits to corporate diplomacy. That’s why we’ve been urging government officials in the United States and abroad to advocate for policy change. We believe governments have the most leverage to influence the decision-making of other governments.
• Advocating for Freedom: Having followed these issues intently and having now met personally with the families of dissidents, I understand our responsibility in advocating for their release. In fact, just yesterday, I went to Capitol Hill with Harry Wu to meet with House Speaker Nancy Pelosi and Senator Dianne Feinstein to discuss these issues. And I recently sent a letter to Condoleezza Rice before her visit to Beijing, urging support in seeking freedom for Shi Tao and Wang Xiaoning. With the Summer Games approaching, there seems to be a perfect window of opportunity for exerting diplomatic leverage. Senior Yahoo! leaders have also met with high-level Chinese and U.S. officials to directly appeal for release. We’ll continue to pursue this doggedly.

We’ve learned important lessons from our experience in China. We hope our experiences and plans can help guide other companies and ultimately influence the emergence of more open societies around the globe — when technology can truly be used to make the world a better place.

Jerry Yang
CEO and Chief Yahoo

This morning, our General Counsel, Michael Callahan, and I testified before the House Foreign Affairs Committee in Washington, D.C. I wanted to share with all of you some of the thoughts I conveyed to the Committee today. You can read my full testimony here and Mike’s here.

On a personal level, the very serious human issues at stake cause me great concern. I’ve invested my professional life in this company, and I believe in the Internet and its incredible power. I also know that governments around the world have imprisoned people for simply speaking their minds online. That runs counter to all my personal and professional beliefs.

Our company is centered on empowering our customers. We never lose sight of the fact that our success as a business is built upon the trust we maintain with our community of global users, including citizens around the world, our advertisers, publishers, and business partners.

Today, despite broad limitations on discussion of sensitive political subjects, Chinese citizens know more than ever before about local public health issues, environmental causes, politics, corruption, consumer choice, job opportunities, and even foreign affairs. Much of this change is due to the Internet.

These markets also present companies like ours with challenges in the areas of free expression and privacy. This morning, I described some of the steps we’ve taken to address these challenges. I’ve personally met with senior State Department officials, Members of Congress, and others to discuss the issues. For the past year and a half, we have been actively engaged in a formal human rights dialogue to design an industry code of conduct. We’re working closely with a number of the most prominent human rights groups.

We have been and will continue to be actively engaged for the long-term. As a company in its teenage years, with hundreds of millions of users, and with the human stakes more challenging than ever, we know we must work collectively to find approaches that maintain engagement in markets like China and also put companies in the position to act responsibly.

Jerry Yang
Chief Yahoo and CEO

There’s been much curiosity and speculation about what’s been happening here at Yahoo! over the past few months. Roughly 100 days into our business review, I’m ready to start sharing some of the framework for where we see the future of Yahoo!.

After I last posted in July, we gathered senior leaders from across the company to develop a vision that we believe is truly different from that of the past. We conducted an intense review of our business, examining everything from our strategy and culture to our competitive position and how the marketplace is evolving. We knew we had to change not only our business, but also how we prioritize and make decisions. We had to shift from a siloed mentality to a more collaborative organization that marches toward a common horizon. We had to determine which businesses to invest in, and which to begin to exit or de-emphasize.

What we ultimately saw was massive untapped potential and the opportunity to achieve things few companies on the planet could accomplish. As audacious as that sounds, we believe it’s entirely within our reach with a lot of hard work and discipline, greater focus, tough decisions, a shift in culture, and faster execution. And what will drive us? Creating incredible experiences for our customers.

Based on our analysis, we’ve made important decisions. We defined a strategy that revolves around making Yahoo! indispensable to an ecosystem of consumers, advertisers, publishers and developers while tapping into three key differentiators: generating and leveraging insights, deploying open platforms, and becoming partner of choice. While these have long distinguished us, we intend to do more with them going forward. We will do so by measuring how much more “relevant” we can become for each member of our ecosystem. We believe centering around “relevance” will become a unifying focus for us and drive increased value in everything we do.

We’re placing our bets in three big multi-year objectives. Let me walk you through them, what they mean, and what kind of actions support them:

1. Become the starting point for the most consumers: We’re defining “starting point” as being the sites that help you better manage your life and connect you to what matters most to you. Services like our Front Page, My Yahoo!, mail, search, and mobile all fulfill that role, while properties like news, sports, and finance (for example) serve as anchors from those starting points. We’ve made it our mission to provide kick-ass experiences in both of these categories to inspire the most consumers to begin their day with us. It’s critical for us to continue to invest and innovate in these offerings so that we can power and delight these consumers. Recent moves like the new Yahoo! Search, the new Yahoo! Mail, and our acquisitions of Zimbra and BuzzTracker should give you a sense of what we mean. And by tapping into our insights, we think we can significantly increase our relevance (why serve up World Series content to you on our front page when what you’re really interested in is Dancing with the Stars?).
2. Become the must-buy for advertisers: What’s key here is our transformation from selling inventory on primarily the Yahoo! network to becoming an advertising company that delivers comprehensive, integrated, and targeted solutions on Yahoo! and beyond. Through our acquisitions of RightMedia and BlueLithium, we think we’re on track to becoming the industry’s leading open ad network. We’ll provide advertisers with the benefits of more insights, open competition, and scaleable tools and platforms. We think our momentum is building. Panama’s global rollout is nearly complete, our display business is showing signs of growth, we’ve signed on more great publishing partners, and we’re encouraged by the traction we’re seeing in our new strategy.
3. Deliver open, industry-leading platforms that attract the most publishers and developers: We have phenomenal technology platforms and data infrastructure, and it’s time to share. Besides building on open API for critical platforms, we’re looking at many different ways to open Yahoo!. We’re excited about what could happen when a motivated community of publishers and developers starts plugging into our most popular services. Imagine how efficient your Yahoo! Finance experience could be with portfolios integrated from your brokerage. Or how personalized your Yahoo! homepage could be with a cool third-party widget. The possibilities are endless and “open” is all part of a new way of operating at Yahoo!.

Our new decision-making framework also informed what we’d no longer invest in. To start, we’ve de-emphasized our focus on subscription music in favor of ad-supported music, migrated Yahoo! Photos to Flickr, we intend to transition Yahoo! 360 to a more integrated Yahoo! “profile” experience, we’ve closed Yahoo! Podcasts and plan to shut down a number of one-off services, and we’re currently assessing our options for our Kelkoo comparison shopping service in Europe. We’ve identified still more areas and we’ll continue to work through them.

While our recent actions and initiatives provide the breadcrumb trail for Yahoo!’s future direction, you should now have a clearer sense of the new path we’ve charted. We’ve scripted our strategy, sharpened our organization, determined how we’ll prioritize, and zeroed in on our big bets. We’re in the midst of our transformation and seeing some initial progress. There’s hard work ahead, along with a large and growing market opportunity. If we execute as planned, I’m confident we’ll be creating substantial long-term value for our users, advertisers, publishers, and developers – and, of course, for our shareholders.

Jerry Yang
CEO and Chief Yahoo

Based on the hundreds of people — employees, investors, partners, advertisers, users, peers — who’ve reached out to me over the past month, there seems to be no shortage of folks who want Yahoo! to succeed. Put me at the top of that list.

The last four weeks have been occupied by candid conversations and an intense analysis of our assets, challenges, lessons learned, and opportunities. It’s helped me look at Yahoo! through new eyes — an approach I think is critical for a guy who’s been around for 12 years. While our business continues to grow, we need to dramatically improve our performance and I intend to put us back on a winning path.

So, how do we get there? To be honest, we don’t have all the answers today — there’s a lot of work to do and some tough decisions ahead. I have a great sense of urgency to move in a fast yet focused way, but we want to do this once and do it thoroughly so it will take time. I intend to spend the next 100 days mapping out a game plan and working with Sue, Filo, Blake, and the team to put the right organization in place and make any necessary changes. We need to invest in areas that are most critical to our success and de-emphasize those that are underperforming or match up with our priorities. There will be no sacred cows.

I believe that Yahoo! is too often defined by the competitive landscape, rather than by what we can accomplish with our assets. I’m determined for us to define our own path. Here’s where it starts: We see Yahoo! as a deep and active marketplace — an ecosystem of hundreds of millions of consumers, advertisers, publishers, and developers. All benefit from the presence of the other, and the healthier the ecosystem is, the healthier Yahoo! is. That ecosystem today is not thriving as it should and there’s a wide gap between where we are and where we need to be.

We want to deliver the most insights, serve the best content, and create the greatest value. To achieve that, we plan to take advantage of three major differentiators — consumer insights, a prime asset we’ve frankly under-leveraged to date; openness, as demonstrated by the online exchange we’re building with Right Media; and being the partner of choice, as we focus on creating relationships like those with Ebay and the newspaper consortium.

There’s a lot of heavy lifting ahead, but I’m feeling good about our awesome assets, our initial progress against our challenges, and our vast opportunities if we nail down and execute against the right plan. It’s imperative that we accelerate the transformation of Yahoo!. Our immediate priorities are to invest in the right businesses and shift our product focus accordingly, speed our decision-making and execution, channel our technology assets to build game-changing platforms, and do a better job of attracting, developing and motivating talent while rekindling the culture of winning that built this great company.

One last note: Don’t be surprised if you don’t see a lot of me in the press in the near future as we keep our heads down working through the challenges and opportunities at hand. I’m sure not everyone will agree with that approach, but it feels right to me. I’m a big believer in doing versus talking. We’re focused on making changes from the inside out and we’ll get out there when the time is right.

In the meantime, thanks for your encouragement and support.

Jerry Yang
CEO & Chief Yahoo

The title of Chief Yahoo takes on new meaning today. I have the great honor of stepping into the role of Yahoo!’s Chief Executive Officer. Yahoo! has an incredibly bright future and I make this move with deep conviction and enthusiasm. I’ve partnered closely with our executive teams for 12 years to steer our strategy and direction and today I’m ready for this challenge.

Today also marks the close of a great chapter in my life with Terry Semel as my partner. Since coming on board in 2001, Terry has given Yahoo! six of its best years. He delivered great value to our users, advertisers and shareholders. Terry refocused the company on key strategic priorities, and in so doing, helped Yahoo! increase our revenues nearly nine-fold from $717 million in 2001 to $6.4 billion in 2006; boost our operating income from a loss in 2001 to nearly $1 billion last year; and create more than $30 billion in shareholder value during his tenure. He helped grow our audience from 170 million to more than 500 million users globally, and he oversaw the expansion of our base of talented employees from 3,500 to nearly 12,000.

I will always be grateful for the incredible achievements under his leadership — and for his mentorship and friendship. We’ll continue to benefit from his support and guidance as he transitions to his role as our Chairman.

I also couldn’t ask for a better partner in Sue Decker as our new president. In addition to knowing this company inside and out, Sue has incredible talents, leadership abilities, a fierce focus on winning, and intense dedication to this company and its people. I look forward to teaming more closely with her as we pursue our joint vision.

What is that vision? A Yahoo! that executes with speed, clarity and discipline. A Yahoo! that increases its focus on differentiating its products and investing in creativity and innovation. A Yahoo! that better monetizes its audience. A Yahoo! whose great talent is galvanized to address its challenges. And a Yahoo! that is better focused on what’s important to its users, customers, and employees.

The past year has obviously not been an easy one for us. But we’ve taken important steps to address the challenges we face, and we’re starting to realize some of the benefits – especially with the successful launch of Panama, which continues to receive positive feedback from advertisers and is exceeding our expectations. By the way, that’s directly attributable to the operational excellence mentality Terry has instilled and is a clear sign one of his most critical initiatives is succeeding.

We have incredible assets. This company has massive potential, drive, determination and skills, and we won’t be satisfied until the external perception of Yahoo! accurately reflects that reality.

I have absolute conviction about Yahoo!’s potential for long-term success as an Internet leader. Yahoo! is a company that started with a vision and a dream and, make no mistake, that dream is very much alive. I’m committed to doing whatever it takes to transform Yahoo! into an even greater success in the future.

The time for me is right. The time is now. The Internet is still young, the opportunities ahead are tremendous, and I’m ready to rally our nearly 12,000 Yahoos around the world to help seize them.

Go Yahoo!

Jerry Yang
CEO and Chief Yahoo