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Yahoo's Bartz on Microsoft, engineering, and ads

An appearance at a financial conference gives Yahoo CEO Carol Bartz a chance to hold forth on a wide range of issues surrounding the company, including its love for tchotchkes.

Yahoo CEO Carol Bartz kibitzed with a luncheon of Wall Street analysts Wednesday as part of a free-wheeling discussion of Yahoo's past sins and future opportunities.

Yahoo CEO Carol Bartz Yahoo

At the Bank of America Merrill Lynch U.S. Technology Conference, analyst Justin Post noted the "much more open policy" that Yahoo has implemented with regard to the financial world since Bartz's arrival at Yahoo, and that openness definitely applies to Bartz's willingness to candidly discuss Yahoo's situation regarding Google, Microsoft.

Bartz let fly with a few of her trademark zingers, but otherwise had little new to say about Yahoo that hadn't already been covered at events like last week's D: All Things Digital conference or Yahoo earnings calls. Nonetheless, here's a selection of Bartzisms that shed a little more light on Yahoo's efforts during her first six months on the job:

• "Yahoo is swimming in tchotchkes. If I see another T-shirt I'm going to throw up." Bartz came to Yahoo with a reputation as a slash-and-burn cost cutter from her days at Autodesk. She is indeed trying to tighten spending on what she called "discretionary" items such as yet another purple T-shirt, but said that Yahoo will continue to spend quite a bit of money on IT needed to keep its sites up and running.

• "Yahoo has way too much infrastructure. For everything you can do in three steps, Yahoo does it in 22." Along those lines, a lot of the cutting Bartz has tried to implement has more to do with processes and sites that had basically been "abandoned," she said. Some Yahoo properties that were launched during the previous regime stagnated, and therefore gave off a poor impression of Yahoo to a visitor that stumbled upon them. Cleaning up Yahoo's myriad properties--in a much faster way than currently possible--seems like a priority for Bartz.

• "We're not a search company." Bartz has previously said that search is an important part of Yahoo, but seems to think that the hoopla over Yahoo's search position between Google and Microsoft distracts from what Yahoo is all about. Ninety-eight percent of Yahoo's searches come from people who are already on the site, she said. That means Yahoo has to keep finding ways to bring in users to its content sites--such as sports, finance, and local news--and let searches conducted by those additional users drive its ad business rather than fighting the external search branding issue against Google, as Microsoft is trying to do with its new Bing search engine.

A revamped home page coming "later this fall" will help, Bartz said. One feature of that home page will involve getting Twitter messages right onto the page; "everything is flowing in, and we help you flow out."

• "An extroverted engineer looks at your shoes when they are talking to you." Bartz got her biggest laugh of the day with an old joke about engineers, and how she prefers spending time out making sales calls with Yahoo's sales force. This is a key area of differentiation for Yahoo: it says it wants to focus on "high-touch" sales, rather than the algorithmic model that prints money for Google.

The hope is that Yahoo can translate its strength in display advertising to lure revenue from chief marketing officers at big companies thinking about moving a chunk of their advertising spending from television to the Web. For those folks, "your brand is not defined by 20 keywords. You have to put a persona out there," she said, referring to the need for display and/or video advertising. In order to do win that business, however, Yahoo has to take a lot of "friction" out of the Internet ad sales process that just isn't there in the television business.

• "This is like me trying to buy Office from Steve. This is not a minor issue." Bartz handled the inevitable questions about Yahoo's on-again, off-again romance with Microsoft by recognizing that while there are some compelling opportunities if Yahoo and Microsoft were to enter into a search partnership, there are more than a few issues, as well.

"Do we trust them to do the technology right? Would we save money?" she wondered. Bartz thought offloading Yahoo's search business would save about $500 million--far less than analysts had estimated--including data-center and employee costs, but there would be lost revenue to factor in, of course.

Microsoft's motivation, however, is clear, at least as Bartz sees it. "They have Google envy, and they really have to stop that money machine because that money machine is coming back on desktop apps."