Terry Semel, chairman & CEO of Yahoo!

This is a partial transcript from Your World with Neil Cavuto, October 11, 2001.

NEIL CAVUTO, HOST: Investors were buying up shares of Yahoo! as the Internet media giant cut costs, and apparently cut them way down. Yahoo! announcing a series of cutbacks as it released its fourth quarter of back- to-back losses.

Earlier, I asked Yahoo's chairman and CEO, Terry Semel, if he is pleased with these results.


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TERRY SEMEL, CHAIRMAN & CEO, YAHOO!: In a really tough time — tough economy, tough advertising marketplace, and all of the events of the world — I'm really proud of the fact that we were able, in terms of our revenues, firstly, to come in on our guidance and within the areas that we expected to come in, and in terms of EBIDTA, our cash, profits, we actually came in the high side of that number with $ million.

So I'm pleased. This is not the first quarter, now for several quarters, we've come in within our guidance, we've come in within our range. And I think in these kinds of troubled times that's really, and particularly good for a company that's so dependent on advertising revenues.

CAVUTO: Yeah, but you want to try to lessen that dependence. You want to get into some other areas, transition to paid services. That at least has been a bit of a crapshoot. How can you assure Wall Street that it won't be?

SEMEL: Well, you know, we've been getting there gradually. We had a lot of work to do.

If you consider the fact that probably a year ago it was 100 percent advertising, the end of last year it was 90 percent advertising revenues, now we're saying 80 percent advertising revenues, that number is going to continue to move.

So it also required a lot of work to get there. The fact that some would like to see it happen overnight is just not practical. It's like moving a big ship. We had to accomplish a number of things, and I'd say we're well on our way in accomplishing many of them.

Some of them were infrastructure, some of them were staffing. We had to refocus our entire sales force.

CAVUTO: But you know Wall Street better than probably most in the media world. It's very impatient. And I guess the reading that I'm getting from some folks — they're not necessarily Einsteins, but some of them are saying that maybe you're there to set up for a sale with a Disney or a Vivendi Universal, someone like that, to ultimately buy you out. Do you see that as your purpose?

SEMEL: No, that's not the reason I came to Yahoo!, not at all. I came to Yahoo! to help rebuild, and to help take what is today, if you think about it — there are only three worldwide portals of this size. And Yahoo! clearly has the largest audience of those three. We have a great future.

You know, I constantly say we are the partner of choice. Many companies who have assets that we don't have are starting to get together with us in many areas.

CAVUTO: But beyond just partnerships, though, I mean, the talk had been prior to your coming on board maybe linking up with my company, parent company, News Corp. There had been, as I mentioned, the Disney rumors, the Vivendi rumors. Are you ruling those out right now or they're just not in the cards right now?

SEMEL: I think our focus right now is to make our company bigger, better, more diversified. We have a great future. We have a great opportunity. And we're going to build this company. We're going to do it — I think we have a great opportunity to build it and do a really good job of doing that.

CAVUTO: Do you think you would have done better had you not had to face September 11th, that that invariably changed everything and postponed whatever progress you're going to make for several quarters?

SEMEL: Well, let's go back even a few months before September 11th. The economy has been in a really difficult place, and the way the economy goes often is the way the advertising market goes. So the advertising market, for all mediums, whether it be for your broadcast companies or big Internet portals, such as Yahoo!, the advertising market has really been difficult. It became even more difficult as of September 11th.

But for companies like yours, like mine that depend very much on advertising revenues, as well as other businesses that were all in, these have been a really difficult quarter.

So for us to make massive change within a lot of our restructuring and a lot of our personnel and a lot of our focusing, for us to be able to be consistent enough to stay within our ranges in that difficult a period, we probably, without question, shouldn't be judged on this period.


CAVUTO: All right. Terry Semel. Yahoo!'s stock was up 157 today, to 12.50. Keep in mind, it used to be an $88 stock.

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