Something to Yahoo! About: an internet winner.

• Author: Heffes, Ellen M.
• Position: Susan Decker - Interview - Cover Story

Susan Decker is the antithesis of complacent; she takes nothing for granted. CFO and Executive Vice President, Finance and Administration of the number one Internet services company, Yahoo! Inc., Decker quotes a friend who was training for the Olympics: "To be number one, you have to train like you are number two." She never forgets that.

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Yahoo is a true survivor, a rarity from the early-Internet era. Thousands of companies that sprouted during the mid-to-late 1990s dot-com heyday are but a memory--often a bad one in many portfolios--having folded or radically changed their original concept to survive. Yahoo has not only maintained its original concept: it's expanded, stretched and grown--vertically, horizontally, organically and just about every which-way.

Yahoo, a whimsical acronym for "Yet Another Hierarchical Officious Oracle," is cited by many as the company that defined the way people use the Web. It offers an array of services for Web users around the globe, both consumers and businesses, as it continually enhances the breadth and depth of its franchise. The Sunnyvale, Calif.-based company's services now reach over 263 million users each month in 13 languages in 25 countries.

Founded as a hobby in 1994 by then-Stanford Ph.D. students David Filo and Jerry Yang, it was incorporated in 1995 and went public shortly thereafter--on April 12, 1996, opening at $13 per share, and closing at $33 per share. An investor buying 200 shares ($2,600) on that first day now owns 2,400 shares (it's split four times) valued at approximately $116,328 ($48.47 per share) by March 31, 2004.

Not that it's been all gravy. Even an innovative company like Yahoo has much to grapple with--from the beginning of the rush to the Web, when new Internet companies flush with money raised from Wall Street and eager to get their names out spent big on advertising; to the dot-com bubble, when the easy Wall Street money dried up, as did much of its advertising revenue; to the uncertain global economic environment; and its new strategy to charge consumers for enhanced services.

A member of FEI's Silicon Valley Chapter, and CFO since 2000, Decker spoke with Financial Executive's Managing Editor Ellen M. Heffes about the company's growth and how it's relying on innovation to expand its core strategies and perpetuate its success.

Why do you believe Yahoo has been so successful? What does it do right?

Decker: We start with some great assets. Yahoo has a global user base, and we now have a globally recognized brand. We have made it a priority over the last few years to both build and buy some of the best products and services on the Web to serve and continually build that base.

Particular areas of focus on the product side have been: search, mail, sports, finance, you name it; we've been upgrading and building the product side. That's important because it is self-reinforcing; it keeps people coming back to our network, and staying longer.

From that kind of chemistry, we have a growing number of consumers that find so much value from what we offer, so not only are they using the free products, but they are increasingly paying for various deeper usage of our products and services. Keeping people longer and [providing] deeper access has the benefit of being very attractive to our advertiser base--big auto, packaged goods and entertainment companies--that are attracted by the breadth of the distribution network.

Also, others, like e-commerce companies and small and medium-sized businesses, see low-cost ways to acquire new customers through our model.

Since Yahoo started in 1994, top leadership has changed several times. When current Chairman, Terry Semel, the former Co-CEO of Warner Bros. was hired, it was said to be an indicator of the company's direction. What do you believe he's brought?

Decker: Terry has brought a number of things to the table. He has drawn on his past experience, which was very relevant to Yahoo, and where it was in its development [when he joined]. The most important things that he has brought include his leadership and managerial experience; he's built great consumer franchises before, so he brought that management maturity to a very young company with a lot of...