>> from our studios in new york city, this is "charlie rose." charlie: c.e.o. and president of yahoo! since 2012. prior to becoming c.e.o., she was at google where she was one of the first 20 employees. on taking the challenge to run yahoo!, she inherited a legendary iconic company in internet history. people want the company to succeed and they want her to succeed. she does not do many interviews and here pleased to have her here to talk about the future and the past. we begin with the future. as many know, yahoo! became because of founder, they own 40% of the chinese companyal abaseballa -- companyally

baseballa. there was consideration of a spendoff, then the board decided on a reverse spinoff which meant considering a sale of core operative businesses. marissa has announced a plan to return this iconic company to greatness and that's what we ant to talk about. welcome. it's good to have you here. marissa: i'm very excised -- excited to be here. charlie: tell me how you see ya hood today and what you want to do -- yahoo! and today and what you want to do to return this iconic company to greatness. what's the plan? marissa: yahoo! was the original internet i con. it's a huge part of people's daily lives. about half of your viewers today, more than half, will use a yahoo! product at some time. it's an amazing opportunity to say, how can we take something that was such a huge part of

people's daily lives in 1995, 2000, even today, and transition it as we're seeing such huge shifts in the technology industry. with mobile, with video, with whereables. there's so many great opportunities in terms of how do we guide people? yahoo! started out as a guide to the worldwide web. how can we be that modern version of that? we've come so far. i'm really proud of our progress but there's a lot more to do. on the other side we have tremendous assets. we have a large stake in yahoo! japan. our joint venture. we also have the alibaba steak. there's quite a lot to do. overall. there's the operating business of how do we provide the service to a billion users every month. everything from mail to our home page and news, search, sports, finance. and how do we manage these large assets that we have in china and japan. charlie: so the board has decided to do what?

to have conversations about selling the core assets? marissa: yes. well, obviously as you can imagine, the alibaba asset has grown to be really large. inside of yahoo!. and one of the things we're looking at is how do we create the most value for shareholders? and one of the elements of that is really around how do we get alibaba into an entity by itself. because by doing that we unlock all kinds of opportunities in terms of tax efficiency, in terms of greater valuations, etc. and so one of the things we endeavored to do in 2015 was a forward spin. taking our alibaba stake and turning it into its own separate company. we decided to pause that plan. now we're looking at, can we do a reverse spin or could we do a strategic alternative with the operating business. could be a sale, could be a merger. to ultimately, basically get both the operating business of alibaba d the stake in

into separate entities. we've become a lot more efficient overall. our services today still see terrific traffic. they generate great advertising revenues. but when we look at where we want to put our energy we really want to have fewer arrows, strategic pushes, with more people on them. we've really tried to say, what is the focus of yahoo? d we've done so many different things, from autos to personals. today our focus is search, mail and tumbler. those are three global platforms we run. in terms of verticals, news, sports, finance and lifestyles. charlie: what will this do for you? and how will you make this successful? marissa: i think the big thing that i'm really focused on is our end users. in term of how do we make sure we provide them with the best possible service, the best possible mail, the best possible news? and then there's also the shareholders.

that we want to generate the most possible value for. and there's a lot of great opportunities in this asset base. to really unlock a lot more value. charlie: there are big five company and yahoo! used to be one of them but is not in that ranking now. apple, google, amazon, facebook and microsoft. where does amazon fit? because if you think of search, which you listed as one, google is a huge, huge factor. where do you find the place in search? marissa: when i look at the future, search today, web search, is what a lot of people think about. and web search is excellent. i'm really proud of how far the search industry has come. when you look at how should search work on a mobile phone, i think it should be something very different than what we see today. it should understand a lot more about you as a person. the classic example i'll use is if i type in j.f.k. into web search, i'm probably looking for the john f. kennedy wikipedia page. if i type in j.f.k. and you can tell from my phone that i'm racing down the freeway heading

toward an airport and you know from my email that i have a receipt to be on a flight later that day, chances are i'm trying to find out when my flight to j.f.k. is, what gate it's leaving from, is it on time, ette. and so there's a new form of search that's really emerging in mobile. which ri refer to as personal assistance. you see some of this with google now. srii. we think that given our heritage in search, there's a lot we can do for our users, using some of the preferences, using email. obviously with their permission. but to really rethink how search can and should work. charlie: what percentage of search will that be? marissa: today our market share is somewhere around 10% overall. but i think when you look at the broader world of search, the majority of searches are going to be done from mobile phones. and the other thing we know, we have an analytics platform for mobile, the thing we know from that 8% of time is spent

in browsers. the other 9 % of the time is spent in applications. and today web search really remains confined to the browser. we want to look at how can we really unlock the information, data and capabilities that all those -- of all those different apps to help make people's phones more effective for them. charlie: that's something people have been talking about for a while. that search will move to apps. do you see that happening? with how much velocity? marissa: i do. i think it will happen. people always overestimate the short term and underestimate the long term in these things. i think when you start to see some of the big advances we've had in voice search and image recognition, a lot of the big, hard computer science problems have been solved in recent years. when i look at the app ecosystem, the fact that we now have apps on our phone that can help you get an uber or book a restaurant, get a flight. if i know when your preferences are in terms of what services you like to do each of those things, i can help -- a search assistant can help pull all that together and make your life a lot more seamless. charlie: when you came to yahoo!, there was high expectation. because of where you had come

from and the role you had played at google. do you think the expectation for you was too high? you had great ideas that you wanted to in a sense take the google experience and you looked atiyyahhood, you knew what the future was going to be in terms of mobile, you saw that coming, you understood the possibilities of mobile ads, yahoo! had been a company that generated revenue because of ads. marissa: i think that the hopes were high because there's a terrific team at yahoo!. there's just great people behind the products. i think you can feel it when you use yahoo!'s website. there's great personality. there's great opportunity and i think that people love to cheer fauriahood. -- for yahoo!. charlie: bass the -- wags the expectation for you enormously high? marissa: the expectations were high. i think because of the team and the product. i think that it's a strategy that makes sense. i think it still is a strategy that makes sense. mobile is yahoo!'s future. you look at what we've been

strong in, mail, search, news, sports, finance, those are all the things that people like to do on their phones. there's a great opportunity for us. and we've made a lot of progress over the past few years. we went from basically having no users on mobile to today having 600 million users on mobile. having almost no revenue in terms of mobile advertising, last year between mobile, video and data and social, we had $1.6 billion of advertising. that's a business that we've grown in less than three years. charlie: why is there so much criticism of yahoo!? then? they look at what you've done since 2012 and they say, she came in and there was a flurry of acquisitions, including tumbler. and most of them didn't work. she spent some $2 billion and most of them have not worked and they have been written off. marissa: i would say that we -- i think they did work. i think that it really was a matter of, we needed to rebuild some of the talent base. we had about 50 engineers in a cop of -- in a company of

14,000. working on mobile. today we have more than 500 engineers working on mobile. we have one of the biggest app development shops in the world. i'm really proud of that. but we had to build that somehow. we built that through talent acquisitions. we saw the benefits of those acquisitions in the form of our mobile. because of various accounting rules, yes, we did see a writedown. but in my view that's not because acquisitions weren't successful. charlie: goes back to tumbler. marissa: yes. tumbler, we are slightly behind where we hoped to be in terms of our plans but i'm still very optimistic about it. it's a great platform. especially for millennials. we see the time spent there being really high. i think the a great opportunity to take things like native advertising and mobile and tumbler's growing really nicely overall in terms of mobile daily active users. it's a creativive, expressive platform. charlie: look at the years since june, july of 2012, since you've been there. here we are in march of 2016, when you look at what has

happened, what did you do wrong? marissa: i think that, well, one, i don't think the story has yet played out. i think when we look at this, we've rolled out a new strategic plan for the company. and we can see the turn-around. a lot of tech turn-arounds do take five, six, seven years. charlie: it doesn't happen. it's rare once they're able to turn a tech company around. apple being one. marissa: i can see our strategic plan, we can see how it's really working. 600 million mobile users, $1.6 billion of revenue. those -- that's the future we built ourselves. i came to yahoo! in 2012, i came because i really wanted to work hard. i thought it was a great challenge. when i met with all the different business leaders and reviewed the different business lines, every single one was in decline. no one had any ideaed how to turn it around. i was the seventh c.e.o. in 61 months.

all of those business plans were in decline. i came in, i thought, wow, this is even harder than we thought it would be. i said, we have a problem. if we want to do a turn-around, we have to get these business lines growing again. no one knows hued to do that. y -- how to do that. banner ads are popular and effective but mobile's where the action is. we had to build ourselves a new future. and we had to build it quickly enough and to a scale that matters to yahoo! today. our mobile video, native revenue is material overall to the company. we're really proud of that. we had to take it from a few million dollars to today, you know, $1 billion, one of the fastest growing business lines i've ever seen in my career. so i'm very, very proud of what we did. but we needed to decide in our turn-around how do we stabilize that declining revenue? there was a lot of it. four to five -- $4 billion, $5

billion a year that's in decline, and then be able to grow fast enough to offset that and show the type of growth you expect in a consumer internet industry. charlie: one point is the expectation level and the difficulty of the challenge you faced. there were declining revenues. but here you see yourself in a situation in which you have activist stockholders, shareholders making certain demanledses. and the board deciding to say, yes, we'll consider selling these core assets and you on the other hand are trying to develop plan to make these core assets function. including eliminating some businesses you had found unsuccessful. marissa: they're completely complimentary. for us, at least for the shareholders, the biggest way to unlock value is to separate the alibaba stake. there's two ways to do that. one is through a spin. spinning it separately into another public entity. charlie: why didn't you -- marissa: we didn't do the forward spin because overall the market was concerned about various tax liabilities and outcomes there. now we're looking at the reverse spin.

we're doing work on that. but at the same time we're also looking at a sale of the core. in effect, those two processes, looking at either a sale or a merger or a different alternative in terms of the overall strategic outcomes for the core, are the same as a reverse spin. the only difference is you end up with a public entity at the end because you spun into a public entity or ultimately a privately held company. i think that either of those outcomes would be really good fauriahood. because i can see outcomes there where we can -- we can become stronger in our strategic execution. either because we get more mobile distribution or because of some of the things we need that are difficult in the public markets. ultimately could be done more privately or in the context of a larger company. overall, i can see an outcome here where we can achieve the outcome of the alibaba stake, which is critical for unlocking value. while we also get a boost to the core operating business. fauria hood. charlie: when you sold one half of your stake, what happened to those revenues? marissa: the proceeds from the

sale were returned to shareholders. so today we spent just over $2 billion on acquisitions, it's true. but we've returned almost $10 billion to shareholders. for every $1 that we spent on acquisition, we've returned more than $4 to shareholders. we've done a significant number of buybacks and returned a lot of the value to you the shareholders which we think -- to the shareholders which we think is appropriate. charlie: if there's a sale, do you go with the company? marissa: the biggest piece for me is how do we take this company and get to the right place? charlie: apart from the alibaba investment. marissa: that question for me is, the primary issue is yahoo!, our technology, the employees, the services, the end users. how do we get that to the best possible place fauria hood and find it the best -- for yahoo! and find it the best possible future. i'm secondary to that. charlie: you put all this time in sort of the care of these assets and redesigning these assets. aassume you'd like to go where these assets are.

marissa: i love running yahoo! and i think the people there are terrific. i love the user base and the products we get to work on. it's really exciting. i'd love to see it through. but obviously we also have our duties to find the most value and so i certainly hope that a strategic alternative has a place for me. that said, we'll obviously honor our commitments to our shareholders. ♪

charlie: there was a story about one of the other firms. i assume it may be true for you. a talent flight. in circumstances like this you have to increase the premium you pay for key employees at a time like this. true? marissa: i think that that's certainly true. i think that one of the things that people need, no one does their best work when they're afraid, so you have to remove uncertainty. what we have done is make sure that people understand that they're part of our future, they're a key part of our future. right now talent is a very hot issue at every company. especially for us. certainly we have had to take some steps in terms of compensation to make sure that people understand how we value their efforts. charlie: how difficult was it for you in the years since 2012 in a sense to get a firm position in terms of mobile ads? because your predecessors had not left you in a firm position,

so you had to play catchup? marissa: that's right. when i came to yahoo!, my thesis was around mobile. how do you take all the great services and bring them to mobile? i spent the first few weeks or so every time around lunch hanging out in the cafeteria. just talking to people. talking to anyone who would talk to me. charlie: what did you learn? marissa: i ran into a mobile engineer named tony. and i said, what are you doing? he said, i'm a mobile engineer. i said, great, how big is our mobile team? and he said, about 30 people. i was like -- i don't have a great poker face so he could tell like right away that i was taken aback. that it was only 30 people. and so he said, well, don't worry, there are more of us. i said, how many more? he said, there's more of us imbedded in the teams. maybe twice that. i said, 60? then i said, how many engineers do we have who work on mobile? they said, well, like 100. i said an actual 100 or 60 rounded up to 100? and they were like, well, like 60 roubleded up to 100.

we needed to build can hesies there really quickly. we -- competencies really quickly. now it's if you rewind to 2012 there's discussions about which platforms mattered. decision, weategic thought native apps were right thing to do. then we paused. we decided that android and i.o.s. were really the two platforms that would ultimately end up becoming dominant and we were right on that bet. today it's obvious. but in 2012 it wasn't obvious at all. by placing those bets, we also -- there was a terrific leader and manager in the company, his name is adam, who became our senior vice president of mobile. did he a brilliant job recruiting great mobile engineers. really putting people into a place where they could do terrific work. we were really proud. we won the apple design award for best application two years in a row.

one for yahoo! weather, one's for yahoo! news digest. we really came a long way, especially considering where we came from. of course there's still more to do. we always would love to have even more engagement on mobile. and that's something that we're working on. charlie: a tall mountain to climb. marissa: yes. and we started obviously very low. marissa: that's my -- charlie: that's my point. and the dominance of these huge five companies. marissa: 600 million mobile monthly users puts us in the top five audiences globally. and the mobile advertising business that we have of more an $1 billion is puts us easily in the top mobile advertising companies in the world. part of the issue with growth at yahoo! is that we were so big to begin with. there's only three u.s.-based companies that have more than $1 billion -- a billion users every month. there's only three u.s.-based companies that have had more than $4 billion of digital advertising in a year. basically us, google and

facebook. we came from a very large tradition. much larger than some of our other peers and competitors. that makes it really hard to generate growth. 10 million new users is a rounding error on a billion. 10 million dollars of dimble revenue on $4 blt -- $10 million additional revenue on $4 billion -- charlie: you've had those users for a long time. marissa: no. we got that mark in 2014. we've been growing our users and it's continued to grow. charlie: why do you think people come to yahoo!? marissa: our business is around informing, connecting and entertaining users. for me that's search, mail and digital content. it really is a digital network. because the three really work together. there's some people who come for mail. then they stay and do a search and they read a news article. there are some people who came for sport. and then they might do a search or read some email. search is really around helping people do discovery and in terms of the business need, the a

really lucrative form of digital advertising. on mail, it's around frequency. people come and check their mail. doeses -- dozens of times a day. for us, our news is our voice and our difference. it allows us to differentiate with our voice. charlie: some of the things you download include magazines. the number of people you've brought in to provide a kind of news base for the company. and they also raise this question, which is fundamental. they say, you look at these core assets. if you take the alibaba stake outside of it, their value is very limited. very small. marissa: i don't think their value is small. i think the way the market is valuing them today. charlie: fair enough. marissa: we definitely think they're very undervalued. charlie: the market is saying those core businesses are not worth much. marissa: this is part of why we're considering strategic alternatives. we think there's more value

there that can be realized. considering strategic alternatives is one way to unlock that value. charlie: do you think you'll be running yahoo! a year from now? i ask that because people ask that. marissa: i think that, again, i would love to. i would love to be running yahoo!. we have a three-year strategic plan. i can see how it will work and how we can get to a successful turn-around of yahoo!. but i think that it's about our users. and it's about our employees. what's happening all of them. i certainly hope that our services are here a year from now and they run even better than they do today. i can see that should easily be the outcome. and we have a terrific team atiyyahhood. rill hope that they're allowed to continue on to do the good work. we're going to look at all possible strategic alternatives and i'm confident that we'll find the right one. charlie: i'm told, i assume this is true, that you really have reached out to a lot of people to ask for, you know, look at the position we're in, and

what's the best way to go? you're seeking advice from a cross section of people in silicon valley and the financial community to say, this is the challenge we have and this is my plan. what do you think? marissa: yes. we've sought a lot of advice, both formally and informally. our situation is complicated. so the going to take a complicated solution. charlie: explain to me what you mean by complicated. marissa: i think when you look at our business, with search, mail and digital content, it's complicated in and of itself. when you also look at the stake in alibaba, the joint venture with yahoo! japan, we have a joint venture in australia. overall when you look at all the different elements of our business, it's a complicated space. when you look at how can we maximize the value that's recognized by all of those different pieces, it's complicated. charlie: in order to sell off a -- spin off, who would have to sign on to do that?

marissa: that's what we attempted to do last year. but one of the things is our basis in alibaba, basically the price we bought that stake for, is relatively low. it was high at the time. we bought it for $1 billion but that stake went on to really multiply to a tremendous return. given that, that there's a large tax liability on that stake, so there's various ways to address it. obviously it's also tied very closely to the value of alibaba overall. now that the a publicly traded company. but basically the thought is there's more tax liability introduced by spinning out alibaba than there is on the reverse spin. where the company we built to operate yahoo! is in theory higher and there's a tax liability. charlie: do you feel pressure from stockholder activists? marissa: we see their criticisms and challenges. my view is that i think that having lots of different view points on the issue is helpful.

we take all that input seriously. we engage with them. we engage with all of our shareholders and we integrate that to the best of our ability. to ultimately find the right path forward. charlie: if you look back in the last 3 1/2 to four years, was there a big bet that you wish you had made that you didn't make? marissa: we made some pretty big bets. mobile was a big bet. we bought 40 different companies to populate the talent in that team. charlie: this is the $2 billion acquisition. what happened to those companies? marissa: they now work on mobile. they build yahoo! mail mobile, all those different mobile applications. and to me we've taken what was a really sort of scattered framework of mobile applications, i think we at one point had 81 different applications, none of which you heard of, today we have seven or theat are very, very strong. i think that the big bet on

tumbler, to me it hasn't -- it may not yet be material, it's a terrific asset. it's a terrific network. the team it there working at tumbler is exceptional. and we've got a great path forward. in terms of what we can do, how we can help to continue to grow that community of creators. while providing a great opportunity for brands and advertisers. charlie: why was it necessary to reduce them? to ride down some of the value of that? marissa: there's a whole set of accounting rules. that come into play here. part of it is that the composition of our market cap is in fact complicated, so when you're trying to find the market cap of our operating systems, it becomes subtractive. at some point there's only so much left. if your book value exceeds that market value, you have to do a writedown. which is ultimately what happened here. charlie: yahoo! is a company that everybody has a certain affection for and want to see succeed, as they do for you because you've been a significant part of the silicon valley community for a while.

but what have you learned not about specific things, but in the sense about coming into a circumstance like this? what do you wish you had known? what has been the learning experience for you? marissa: i think there's, again, what i think is great about it is i get to learn every day. i think that it's been amazing. i love design and getting to work with a team at yahoo! to design what our future should look like, to get to design how the wp works. the been an incredible experience and i think that probably if i could take one lesson away it would be that pacing and time is always really important. i think there's some things that we probably did too quickly. i think there are some things that we probably did too slowly. charlie: and not enough. marissa: and not enough. but i think that we learn from all of that and we're constantly and when i look at the strategic plan we rolled out, this is the combination of all of that learning credit one thing we should do is get away from declining revenue more quickly and get more focused on

areas of revenue and of the business that can grow really substantially to get us returns. and really, that is another key part, that yahoo!, there are some many things we work on, it is really important for us to be focused. focused on providing the best possible service to users, focused on the product line, and where we can do really excellent in each area. and really differentiated. i am feeling good about the strategic plan and how we can achieve that in all the areas. charlie: it had to do with real estate, offices, but it also had to do with people. people you had brought in, hoping that they could create something that would be a vital part of -- of all those, what was the hardest loss for you? for the yahoo! community? marissa: i think along the way,

there were all kinds of different things we tried. i am proud of those experiences. we tried to set up a community, digital magazines, i would say when you look at the successes we have had, and with native advertising, yahoo! gemini is one of the fastest forms of advertising growing on the web. overall, this -- i am proud of that. i would say that some things we learned around digital magazines and the original content, they just live on in a different form. because some of those types of media when they translate online, you need a lot more support in terms of the tools offered. why is yahoo! finance more successful than the magazine, because you have fully owes -- portfolio. where we successful in sports, because you can follow teams, put together your fantasy football lineup. so, i think that having told is

-- tools is another key in succeeding. charlie: someone you know would say, what did you think of nfl's streaming? marissa: we were the first load -- global live stream of the nfl in october, the buffalo bills and the jacksonville jaguars. it started at about 4:30 a.m. i pulled into the parking lot and it was amazing, because there were literally 300 cars at 4:30 a.m. i took a picture of it. it was a great moment for the company. our goal was -- was to try and build a record number of viewers, we saw 33 million views on that stream. all on a sunday morning, which tends to be a sleepy time on the internet. and we did it was unbelievably high death quality -- def quality, very little re-buffering, compared to standards and other streaming providers. i think that we made a case for ourselves in terms of how we work with quality.

and obviously, because of our heritage in sports, this fit in with fantasy football and it was a really proud moment for the company to get to partner with the nfl. charlie: then your time said -- new york times said in december, it is a collection of news, entertainment, and communications, destinations supported by ads. it was hard to build something novel, but it appears like they are building a better yahoo!. what is a different company that marissa mayer could have built? one option, diving into television. she could have bought netflix. was that a possibility for you, did you think about that? because when terry was there, the idea of yahoo! as a powerhouse was given emphasis. marissa: yes, i think that

overall, there are opportunities. that the same time, we have a huge user base. we cannot stop running e-mails, searches, providing the news, so -- and we have $4 billion worth of advertising revenue and advertising messages that we needed to get out on behalf of advertisers. so, i do not think there was a world where we could have done a pivot and walked away from things. there are maybe some things we could have added, but that goes back to the point of focus and distraction and saying, we really want to go back -- i found i really wanted to find the core of yahoo! and figure out how to use them. charlie: and build on them. you said what you had done in a new plan is a bold action. that sum would look at what has taken place and to say this is not a bold action, she is simply doing this -- a comb this said that comments -- a columnist said, she is just changing

yahoo!. they said that the assets could be valued much better than they are today. did you consider that at the time, was that a choice that was decided not to make? marissa: we decided to buy tumbler. that was a big bold move. so we made it big bets. some of them have paid off. i really feel like we don't want to turn our backs on the users we already have. and we have had a lot of opportunity. now on mobile, people are doing something that is completely different than what they had done on desktop. yes, the tolls -- tools are a little different, but it is still about communication, information, how you entertain yourself and all the things we provided on desktop, they still have a lot of value and they are still the most frequent things people do on their phones. i did not feel like we needed to necessarily change who we work

and move into a new area, i felt like optimizing what we had and really making a more suitable for mobile, because we all knew how big mobile could be. it was really probably the better path for us. i felt like we should continue to make big bets in the areas we were already strong in. charlie: how long do you think you have to make this plan work? marissa: this is a multiyear plan, obviously with the reverse spin or the alternative, that will come to conclusion far before that. i hope that we are able to see that plan through, because i do think we can see how it will work and how it will affect the turnaround. charlie: you are not on the committee that is looking at new acquisitions, is there reason for that? marissa: this is the way it is typically done, for myself and david philo, the founder of yahoo!, we are considered not independent core numbers, we are employees and we are part of the operating system. charlie: you are employees. marissa: yes, there is a committee already formed, but we are working with them each day. charlie: let me go back to -- think out loud about how beyond building the plan, what you hope and believe yahoo! can become. marissa: i think it can become a vital piece of everybody's day on the phone. and i really think that we can add a lot of value, whimsy, and a lot of utility two things people do every day and trying to make lives easier and help them -- somebody wants said, i

turned to yahoo! for everything i need to know. and a few things i didn't know i wanted to know. there is an element of serendipity in it and i think that obviously, there is so many things you can do, but i really hope we can continue immobile to be that guide we have always been. to guide people to information they need and a few serendipitous pieces of information or things to do that maybe they would not have thought of. charlie: is your biggest challenge right now, you do not do many interviews, to condense not only your employees, who i assume are with you, but to convince the community and the people, that this is a plan that will work and will work and will have the power of reducing, of changing the attitude that the investment committee has about these assets?

marissa: i think when the business really start to grow, that type of change in the investment community will happen. the biggest challenge we see is

around mobile engagement. we have 600 million users, how do we get them to monthly users and coming every day? how do we build products they need to have every day, so we are looking at that, how we invest in medications, that is the biggest driver, frequency of use. how many times you check e-mail on your phone or text, or message, so this is a great opportunity around communications. also, how do we make the applications of the best applications for news, for search, for sports, for finance and lifestyle. we are working hard on those areas because we think that by creating great tools that can be used on the phone and putting them together in a right way,

you can ultimately really build the user base that comes more frequently and find more utility and value in applications. we are already highly valued, but we want to increase frequency. charlie: and with the investment community. when you look at the companies you compete with today, users and the success of facebook in respect to yahoo! and advertising on mobile, do you see that leveling off? marissa: i think that mobile will continue to grow, mobile advertising will continue to grow. because i think, one of the things you see, search continues to be lucrative. charlie: but you -- marissa: there are so many new formats of advertising, there is native advertising, click to install ads, where people are quickly trying to get those installed on phones.

so many different models, these are the early days in my view of mobile advertising, what is the best way to put that message out and for the advertisers, what is the right parts -- right product? how do you format that product and how do you make sure that messages are received most effectively. charlie: it is clear to see where the cloud, the impact it would have when you took over. in 2016, what is clear in terms of your vision of the future? marissa: one of the interesting things we have seen is video. i think that now and when you look at what is happening with mobile video, this is actually a cross product, so we will be think about video antisocial, but video watching on phones is at an unbelievable level. last year, it was found that more people watch -- there is more video watch on mobile devices than on desktops. which is already in garbled. charlie: people watching wherever they are? marissa: i watched a television show last night at the gym. between phones, tablet, people are watching an incredible amount of video on those. we are excited to participate with that. nfl nicely ties together the video element, one of the biggest things we needed to do

for streaming that game was make sure it worked on every platform, ios, all the different formats. i think that mobile video will surprise everybody. i think it will get even bigger over the next years. we are working on how can we get really deep and use video as an engagement lever on key products like sports and finance. ♪

charlie: at the end of the day, what you are saying is the biggest asset that yahoo! as this -- is, is the users? marissa: the audience that comes to yahoo!, the following of the brand, the fact people, every day, this is a huge amount. a huge number of people who really rely on us and a huge amount of traffic that

ultimately gets distributed to the yahoo! you don't -- yahoo! homepage and through the mail service. the ability to direct that traffic and attention to the stories that matter, the key information, that is a huge opportunity. charlie: you have had a successful career at google, a wonderful family and you have had all of the money you need for the rest of your life and other lives, but somehow, because this has been such a challenge, with expectations you

had maybe not the filled early on -- fulfilled early on, your own determination to do this has magnified today because of the challenges that have presented themselves. marissa: absolutely. i feel like now, i can see it, i can see how yahoo! can win and how we can get there and it makes me even more determined. charlie: why do you think other people have not seen it as clearly as you have? they are questioning yahoo! at this moment? marissa: i get a print row seat. our situation is, could. -- is complicated. there is a lot of work left to do, but i can see how much progress we have made. charlie: will i have others not seen it? marissa: i can see us in the future. there is a big dichotomy at yahoo!, are you looking at the operating business, are you looking at the asian assets, which are tens of billions of dollars. how do you balance those? i definitely see in our shareholder base, we have people who own yahoo! because of the

core business, those who own yahoo! because of the assets and how they are valued. charlie: how would you break that down in terms of people who see yahoo! and see that it is asian investments, versus those who see the core business? marissa: so yes, certainly the value is evaluated on asian assets. maybe you own the stocks because of the future. where do you really think is going to be the biggest catalyst? charlie: you firmly believe that the value of the core asset can be -- marissa: i think it could be higher than today. charlie: of course. having believed that, you believe the value of assets can match the value of the assets of the japanese investment? marissa: i think that, overall, i think we would need it to achieve growth. growing revenue, we know that, because of declining legacy revenue, we have been weighted down in that. but now that we are moving away from some of the legacy revenue, which is largely from premium banner ads, now we are moving toward global and video and we can see a path that will have

growth in it. and is valued more by the market. charlie: with the growth be easier if you had inherited a better situation and you come our focus on it at the beginning? marissa: i think that overall, we have focused the proper amount. you need to make an immediate decision when you come, you try to build the revenue back up, but that was impossible for us. you try to offset the declining revenue, or do you take that out? i would argue that our revenue base were large enough, the services were large enough, that we cannot walk away. we needed to stabilize the core business while we added new businesses. and we needed to get those growing really fast and get them to a skill that matters on a $5 billion base of revenue. and we have come so far in that. our mobile video, the revenue being about a third of the total revenue, essentially from zero.

so you know, the issue is, our legacy businesses have been declining quickly, despite our best stabilization. if we do not try to stabilize them, it could have been worse. we have been moving about a half $1 billion a year, in terms of legacy revenue. a lot of people said -- i have talked about this like tectonic plate shifting, because if you look at revenue, it has been flat and a stable, but the composition of the revenue is different. you have huge amount of legacy revenue falling away and new revenue coming in in terms of mobile, in particular. charlie: i hear you saying at the end of the day, you talk about plans, how it is going to work, but i hear you say that in

terms of your tenure there as ceo, i have done what i had to do because of the legacy business, and needed to stabilize them. it is not like i'm either on decisions, i made -- the wrong decisions, and had to make the decisions because of the company state it was in. marissa: i think a lot of this comes down to timing and expectations. certainly, the path of success is never linear. i do think that overall, we have done what we needed to do. we have done really well and some things better than we could do. if you look at the mobile growth, that is way faster than i expected. absolutely. things have gotten better. but we are still at that point, and transformation, we have not made turned -- we have not made or turned yahoo! around and got not revenue form -- from it. we have gotten an increase in users and revenue does follow users, but coming from those large revenue assets, they were a benefit because they were so large, but they are -- it is hard to get that growth quickly.

charlie: are you confident that the shareholders will give you the amount of time to make these assets grow? marissa: a lot of this has to do with, how do we find this for the shareholders? the reverse spin, the other alternatives, those are important overall for the company and being able to find the strategic moves that would come from either of those and the value that could come from those, is something that can be beneficial. i will make the sacrifice. i will often say, you cannot have everything you want, but you can have the things that matter. i can have my family, yahoo!, and do a good job at both. admittedly, there may not be time for anything else, but this is how i have approached it. there are some women who want to work, some women who do not want to work. those are both valuable choices. you need to make the choice that will work for you and your family and situation and circumstance.

charlie: he made the choices that were right for me. marissa: yes. everybody at yahoo! took at least a month off, in fact, most took four months off that we offer as part of our maternity leave policy. and many asked, was i setting a bad example, by taking a short leave? i needed to take a short leave. i may have cut off time with my daughter and son, by encouraging people to take their time off. charlie: did they say that you are crazy? marissa: probably. again, everybody does it in their own way. i came back to work really quickly, but i also made a lot of time to spend with my children, you know, in the same context of being back at work.

so, you can have a lot of time with the children, while you also find down time, nap times, different moments in the day. yes. charlie: finally, there is a question in silicon valley, you have often cited as one of the most prominent examples, among others out there, including at companies like google -- is it going to get better? marissa: i think it will get better. technology, especially the internet, and computer science, they are really new. charlie: that is what they loved about you, look, she is it an engineer -- she ends and -- she is an engineer. marissa: yes. charlie: do you still code? marissa: on various side projects. but over all, i think that we need to make, i think we need to make technology and computer science really tangible.

it shows that the issues, in terms of having enough women in technology, they need to start early, middle school, high school. i think as technology becomes more accessible, people are asking, how can i work on that, how can i do that? i am hopeful that that will drive more women into computer science. charlie: a long way to go. finally, i do not talk much about this, but encryption. or you supportive of that -- are you supportive of apple? marissa: we are to we do not have -- we are. we do not support terrorism, but with apple's stands revolves around the fact that what they are being asked to do, it could be abused. there is a very gray area in terms of, if that technology, if a backdoor exists, how will it be used and how will we government -- govern it?

charlie: and encryption has gotten better. marissa: yes, and the stance is really on point and it is something that we would support for our users. charlie: it is good to have you. marissa: thank you. ♪

mark: let's begin with a check of the first word news. a state from an official says the number of refugees it except including syrians. assistant secretary of state victoria nuland says the u.s. will "continue to be a welcoming place for refugees echoed no word on how many the u.s. plans to take in. wdr says newly obtained files have references to men who carried out the paris attacks. analysts say the files could provide clues into islamic state global recruiting networks. nato's north american council approved the nomination of u.s. army general [indiscernible] he is ha