Yahoo Chief Addresses Hot Topics

Yang also faced tough questions from an audience seeking his views on online privacy and regulation, the America Online/Time Warner merger, the recent Microsoft antitrust case, and bottlenecks to the growth of technology.

"[Privacy] is one of the most important issues we deal with today," Yang said. Yahoo is currently the target of a Federal Trade Commission investigation to determine whether its consumer practices violate FTC consumer protection regulations.

He noted that the definition of privacy changes continually, making privacy protection difficult. Because consumers participate in varying degrees of information collection, it is hard to draw the line between what is and isn't private data, Yang said.

While Yang strongly supports privacy, he added that regulation won't work because it doesn't address the dynamic nature of the online industry. Yang suggested that industry effort should supercede privacy regulation.

"We primarily believe in self-regulation," agreed Rudy Nadilo, president and chief executive officer of Greenfield Online, an Internet marketing research company, when asked for his response to Yang's statement. But he added that a precedent needs to be set in the courts so there is a guideline for establishing privacy policies.

Perils of Microsoft Ruling

The federal judge's ruling that Microsoft violated antitrust laws worries Yang.

"The marketplace needs to keep its competitiveness," he said. Any rulings or regulations that detract from competition will hinder the Internet industry and slow it down. Yang says he supports a marketplace that is free from intense regulation.

Yang views the AOL and Time-Warner deal as a merger of one company with content and one company with distribution channels.

The ultimate question in the scenario is "who controls the eyeballs." Consumers will determine the success of the proposed merger, predicted Yang, because they ultimately have the final choice in what to view.

Yang said he believes bandwidth constraints and consumer devices could limit the explosive growth of technology. Yahoo would like to display richer data, such as streaming audio and video, but is limited by the lack of bandwidth available to many of its users. Likewise, only when consumer devices are available to a widespread user base that can handle higher-quality data will technology continue to advance, according to Yang.

Future Predictions

Yang predicts that the growth in electronic commerce will be astounding in the next few years. In 1999, $80 billion in e-commerce was recorded in the United States, but he sees it rising to $726 billion by 2003.

The Internet is a social phenomenon that is shaping society, Yang said. "It will transform the way we shop, we communicate, and we consume."

Yang added that the Internet will be used in devices that are just becoming available, such as wired cars and kitchen appliances, and others that have not even been designed.

"Everything that touches a customer ... needs to have an Internet connection," Yang said.

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