Since Joining the Internet giant at the bottom of the dot-com bust in 2000, Susan Decker, 42, has taken Silicon Valley by storm. She is widely credited with leading Yahoo’s charge into the search arena, which today accounts for half the company’s revenues. A former financial analyst, she has earned Wall Street’s respect for her candid approach to reporting earnings.
What does it mean to be a strategic CFO?
[Laughs] It could mean that I have no experience in any of the normal CFO disciplines. The way we conceptualize the role here is as the lead on thinking about how to create value for the company over many, many years — not next year or next quarter.
Early on, Yahoo created a great brand, but it was a classic [Web] portal — the door that could get you where you were going, but not necessarily into the room you wanted to go to. With Terry [Semel, Yahoo's chief executive officer] at the helm, we agreed first that we wanted to build or buy key areas of Internet content. We already had E-mail and [instant messaging]. We also wanted to own search, music, careers, and personals — and we wanted to integrate community or personalization across the network.
Within this framework, I try to think: How are we going to create the most market value down the road? Each of the six verticals has a different business model. When we were thinking about getting into search, for example, we quantified that, at that time, no service would offer more market value to the company than search. Every point [of market-share increase in] search is worth several hundred million dollars in value to us.
How does Yahoo differentiate itself from the other big players — Google, AOL, Amazon, Microsoft, and eBay?
AOL, Google, and eBay started with a singular focus. Yahoo started broad, and now we’re building great areas of depth. Because we have many more fully built product categories than many of our peer companies, we think we can integrate them in a way that helps us build a moat.
How does your background as a financial analyst shape your perspective as a CFO?
As an analyst, I tended to be very focused on value and free cash flow. When I came in as CFO, I was probably less focused on the value implications of day-to-day accounting.
But I don’t want to say accounting isn’t critically important. I lean toward conservative choices. We’ve made choices that were dilutive to GAAP EPS, but were value creating. On Wall Street, you need to think about what the market already expects about a particular company. Here we ask, what is the market saying right now? For example, back in the days when the Internet sector was melting down, we were pretty proactive about making sure the market knew how much of our revenue might be exposed.