>>Tim O'Reilly: And we're going to start with someone who, like me, remembers just the sheer
joy of the early World Wide Web, before it became commonplace and accepted, but he also
took that joy and he figured out what it took to build one of the net's great businesses.
Please welcome Jerry Yang, the founder and chief Yahoo -- cofounder, chief Yahoo.
[Applause] >>Jerry Yang: Thanks, Tim. Well, I have to
say, Tim, you're -- at one of the prep sessions, Tim reminded me that I'm probably one of the
dinosaurs of the Internet business, and I can't believe I'm one of the old guys, you
know. >>Tim O'Reilly: I know. It's friggin' weird,
isn't it? >>Jerry Yang: Well, thank God you're still
a little more senior than me, but... >>Tim O'Reilly: Yeah. Yeah.
>>Jerry Yang: But I have to say you're one of my heroes and you've been -- ever since
even when we started, we looked to O'Reilly, and every time we get together you're always
on that next edge, and I'm fascinated and obviously thank you for, you know, having
this conversation. But I just think it's so fabulous of you trying
to change our government. But I have to say I always feel like every
time I go into D.C., I feel like I have to come back west and feels like whatever it
is away from D.C. gets done faster, better, and --
>>Tim O'Reilly: Yeah. Well, I think in general one of the things that is true in our society
is that competition really does create innovation, and governments don't have much competition,
and we have to figure out, you know, how to route around them and how to actually create
some of the services -- >>Jerry Yang: Yeah.
>>Tim O'Reilly: -- that, you know, we used to think that government had to provide.
But I want to kind of -- >>Jerry Yang: And they probably don't have
much fun. [Laughter]
>>Tim O'Reilly: No. >>Jerry Yang: I'm sorry. I'm sure there are
-- >>Tim O'Reilly: But actually, I will say this:
People in government are incredibly passionate. By the way, I'm supposed to be interviewing
you, Jerry. [Laughter]
Although we agreed beforehand we would just have a conversation, and Jerry kind of took
me seriously on that. [Laughter]
>>Jerry Yang: I don't know what you're going to ask me so I'm going to take the offense.
>>Tim O'Reilly: Yeah. Well, take the offense here.
I want to start -- because Jerry and I really started in the same place. You know, we were
running, in some sense, competing services early on.
>>Jerry Yang: Right. >>Tim O'Reilly: I sold mine to AOL and that
was the end of that, and you went on to build a huge company.
So you clearly know something about taking a company from innovation to scale that I
don't know. So how did you do that? I mean, what was the
-- you know, how did you go from that "This is just so cool" stage to, you know, building
a multibillion dollar company? What was the turning point?
>>Jerry Yang: Well, I think that's probably the hardest thing, and certainly I think for
any company that has any scale, it's still the hardest thing is to take great ideas and
put them into the marketplace. But at least for Yahoo! and certainly in the
early days, the formula was sort of simple. We just tried to get things out as quickly
as possible and then tried to iterate. >>Tim O'Reilly: And that was the whole methodology
about that, the whole lean startup movement --
>>Jerry Yang: Right. >>Tim O'Reilly: -- trying to systematize that.
>>Jerry Yang: Right. And I actually think -- and one of the things
I do now is, I do see a lot of startups and I do talk to a lot of entrepreneurs and they
have it so easy now. >>Tim O'Reilly: Uh-huh.
>>Jerry Yang: You know, it's so easy to have that lean and mean --
>>Tim O'Reilly: We had so much to invent back then, it was like "What do you mean, advertising
on the Internet?" >>Jerry Yang: Exactly. But I also think, Tim,
one of the things that -- and I use this as sort of my measure of entrepreneurs and innovators
is, you know, David Filo and I started Yahoo!, Larry and Sergey started Google. There's a
lot of companies that started with a couple people.
Now if you look at startups, especially in the valley and especially doing -- you know,
leveraging all the infrastructure that's out there, what two people can do in a unit of
time -- six months, nine months, a year -- it blows you away.
>>Tim O'Reilly: Yeah. >>Jerry Yang: Versus what we had to go through,
or probably what Larry and Sergey had to go through.
So I just think the pace of enabling innovation -- and obviously I totally agree with your
notion of fun, but clearly having fun at the speed of what they can do now, it's -- it's
a lot more fun than 15 years ago. >>Tim O'Reilly: Yeah. Yeah. Yeah.
So I mean in terms of the technology that you think is most transformative in termination
of the speed of innovation, do you have any thoughts of...
>>Jerry Yang: Well, you know, you and I talk about this platform ecosystem, open and closed,
a lot, and I probably learn more from you than you realize, but I certainly think that
the -- what's happening with cloud and what's happening with infrastructure being completely,
you know, on-demand is -- is revolutionizing not only corporate businesses and governments
and everything else, but what is really making the impact is, I think, the very small- to
medium-size developers, and that's obviously creating a whole new set of tools.
And what a lot of them are doing, to your point of, you know, putting back into the
system as much as you're taking out, or less than you're -- you know, more than -- putting
more back into the system than you're taking out, a lot of them are putting back tools
and infrastructure back into the system to enable the next ones.
>>Tim O'Reilly: Right. >>Jerry Yang: The pace of applications being
written on cloud now, I think, is quickly growing, whether it's for the web or for the
social web or for mobile devices, but it's incredible the speed and the level of creativity
that's happening over a bit of a cloud infrastructure. So I'm probably not saying anything that's
new here, but having witnessed it firsthand, it's truly amazing.
>>Tim O'Reilly: So one of the things that I've been obsessed with for years is the idea
that on the web you get data at scale as the next source of lock-in, and, you know, effectively
we're building an Internet operating system where the subsystems are data.
And, you know, Yahoo! obviously has huge collections of all kinds of data, but you also have made
some efforts to make sure that the tools for managing large amounts of data are open. You've
done a lot with open APIs, but you've also, for example, been a big supporter of Hadoop
for, you know, processing at scale in the cloud.
Can you talk to us a little bit about how you think about that?
>>Jerry Yang: Well, I think a lot of people say, "Well, how's cloud different from any
previous versions of client server or, you know, services or whatever?" And I think the
biggest service is that in the cloud, there is a new business model being developed around
leveraging the data and the analytics that's available and the compute power that's available
in the cloud and using that as a way to drive new business models. Whether that's driving
targeting, driving intent, driving commerce, or driving advertising --
>>Tim O'Reilly: Or driving relevance in mobile. I mean, when you pull out your mobile phone
and, you know, it knows where you are and you're able to do various local relevance,
you forget that's not happening on your phone. >>Jerry Yang: Right.
>>Tim O'Reilly: You know? >>Jerry Yang: Well, and I think that's -- it
boils down to sort of the notion of relevance, and I think, you know, if you look at Yahoo!,
we have to be as relevant as possible to our users and if we can achieve that, you know,
it doesn't matter -- and the same thing for all the --
I think anybody out there today that's leveraging this cloud, if you're just using it for compute
or storage, then you're not really leveraging the entire capability.
>>Tim O'Reilly: Yeah. >>Jerry Yang: And before, the cloud was not
-- the client server was not very knowledgeable. You knew what you had on the client server
and that was it. Now, I think you have this complete paradigm
shift in, okay, how do you have analytic tools, how do you have things like Hadoop that you
can push out computing and allow optimization to be done at a level that nobody before couldn't
do. I mean, this is the stuff when I was at school
and tried to learn how to do computer science, machine learning was this fantasy and now
it's, I think, a core part of business innovation. >>Tim O'Reilly: I think that's a really important
point. You know, machine learning is -- >>Jerry Yang: Right.
>>Tim O'Reilly: -- the new HTML -- [Laughter]
>>Tim O'Reilly: -- in some ways. >>Jerry Yang: Well, and we're not cranking
as many Ph.D.s as we need in our school systems for this stuff, so you have this shortage
in demand and supply, but -- >>Tim O'Reilly: So that's a good segue.
You know, you're on the board of Alibaba. You spend a lot of time in China.
>>Jerry Yang: Right. >>Tim O'Reilly: You know, we're always beating
ourselves up about that we're not producing enough Ph.D.s over here. What's your take
on the innovation gap, the education gap, the sort of science and engineering gap?
>>Jerry Yang: Well, I'm also on the board of Stanford University, and where I -- what
I see there is the best of the world still comes to the United States to get educated,
and there we have -- >>Tim O'Reilly: Then we send them home.
>>Jerry Yang: Well, there we have an advantage. And we won't get into politics here, but to
me, by and large, most of them want to stay here.
>>Tim O'Reilly: What do you think of the startup visa proposal? Are you for that?
>>Jerry Yang: Well, I think it's -- well, I don't know exactly --
>>Tim O'Reilly: The idea is that -- >>Jerry Yang: Any idea of generating jobs,
we should keep -- if they're generating jobs --
>>Tim O'Reilly: John Doerr said give every Ph.D., a green card.
But the startup visa guys are literally saying "We need a visa that says if somebody comes
here with a startup idea and is able to get it funded, you give them a visa."
>>Jerry Yang: Yeah. And, you know, it doesn't matter if they're Canadian or Paraguayan or
whatever. To me, it's a really fascinating thing.
But to your point, I do think that there is -- I'm an optimist for America. I'm an American.
What I do is not possible without being in America. But I also think that the systems
are developing in different parts of the world, whether it's India or China or whatever, you
know, China being an interesting example. But I would say that when America's firing
on all cylinders -- and I think our collective challenge as a society in America is to fire
on all cylinders, but if a we're firing on all cylinders, to use your analogy, we're
really hard to catch. >>Tim O'Reilly: Yeah.
>>Jerry Yang: Because this notion of innovation and entrepreneurism -- and I'll take Silicon
Valley as my sort of little microcosm -- it's infectious. The incubator -- you know, Y Combinator
is a popular one, but there's tons of these where now entrepreneurs, innovators are completely
sharing best practices. And so again, to the point of the two entrepreneurs
who've got a year under the belt, not only do they have infrastructures and advisors,
but their ability to know mistakes that, you know, people like me made over the years,
it's incredible how fast that knowledge is accruing and building.
And I would say a typical one-year entrepreneur who has never done it before -- I mean, Dennis,
maybe you can talk about this when you come up, but, you know, it's clear that their knowledge
-- now whether they can actually have the guts and courage and everything else it takes
to build a business is a separate thing, but --
>>Tim O'Reilly: Yeah. People always see the winners and they forget the losers.
It takes guts to do it because, you know, you have that opportunity of losing at any
point. >>Jerry Yang: Right. But to your point, I'm
an optimist around the system that exists in the U.S.
I do think, you know, this rapid innovation around data and the cloud, you're seeing,
you know, China -- Chinese companies and Chinese government trying to build their own cloud.
I -- you know, it's a question of how open they're going to get it in terms of consumption
of that data, but they have a tremendous amount of talent, they have people who are passionate,
and they can certainly turn around things pretty quickly. So it's an interesting place
to watch. >>Tim O'Reilly: Yeah. So changing to another
topic, you know, Yahoo! grew up as a business around free ad-supported content on the net.
>>Jerry Yang: Right. >>Tim O'Reilly: Now, we've seen with, you
know, the iPhone, the iPad, everybody is going "Wow, we're going back to paid content. How
cool." You know, all the media people. What do you think about the -- you know, have
we really seen the end of "free," or is it just we're getting more arrows in the quiver?
>>Jerry Yang: I certainly think it's that free is not going away. I do think -- and
especially as you look at the value system around the content creation, you always are
going to have sort of the top of the pyramid in the premium content, whether it's the storytelling
or the high-production-value stuff, but the tail is becoming bigger rather than smaller.
Content is getting more fragmented. And in fact, I think one of the notions of
innovation -- you know, we started with, you know, 15 to 20 years ago where people who
had the knowledge of creating a computer site or a computer platform had the ability to
create content or create interesting software. Now that capability of creating interesting
content, interesting software is down not only to the individual, but any individual
with a device, and so -- because so much of that content is in the cloud.
>>Tim O'Reilly: Right. >>Jerry Yang: So I think all those people
who are producing reasonably good content that might be interesting to somebody either
socially around them or by location or however you define it, people are willing to give
that away for free. >>Tim O'Reilly: Yeah.
>>Jerry Yang: So it's sort of people like Yahoo!'s job or other's job to sort of create
the relevance of that content and -- >>Tim O'Reilly: It's kind of interesting.
This is a little bit of history between us, and it relates to this paid content thing.
We had the thesis, as a publisher, when we did GNN, the Global Network Navigator, which
was this first web portal, that selection really mattered.
>>Tim O'Reilly: Right. >>Tim O'Reilly: And Yahoo! listed everything.
>>Jerry Yang: Yeah. >>Tim O'Reilly: And it's pretty clear that
you guys won, apart from the fact that we sold to AOL.
[Laughter] But, you know, it really did matter that people
wanted access to everything and not just the curated set, and the long tail really was
the winning strategy in more and more of that user-generated content.
>>Jerry Yang: And I think the long tail is going to its next phase through social, through
crowdsourcing, through all the -- all the phenomena where the tools of creating this
stuff and leveraging what's in the cloud is actually being passed to the last individual,
rather than to companies or to small companies that have the know-how.
I mean everybody who has a phone, who have these powerful computing devices can create
content, can generate content, can socialize around content. And so --
>>Tim O'Reilly: And not just content. They create intelligence.
>>Jerry Yang: Yes. >>Tim O'Reilly: I think that's a really important
point. Because we're all contributing metadata as well as content.
>>Jerry Yang: That's right. And that's the key.
>>Tim O'Reilly: And the service -- the machine learning actually makes our services smarter,
if we're doing it right. >>Jerry Yang: And, you know, we keep thinking
that's got to be the end, right? But probably not. Probably something else will come along.
But certainly I think to the point of free or not free, I think, you know -- and certainly
from my perspective, as long as the amount of free content is getting more, more pervasive,
more local, more interesting, more real-time, I think free will have a good -- you know,
sort of good path. I do think there is a -- a huge amount of
content -- and the next panel will talk about this, I'm sure -- that does require a different
business model, and I think that paid is a great -- also a great way.
I mean, if you're a developer and you can develop an app and get paid for it --
>>Tim O'Reilly: Yeah. >>Jerry Yang: -- that's great.
>>Tim O'Reilly: I mean, the fact is that the more business models, the better.