You may never be able to monetize user-generated video, because of all the issues that you have with the person who created it. Do they get any revenue from that? Or, once they've uploaded it, it's now public domain, and will that change when people start making money on it? It's not about how you make money on user-generated video, it's how do you make money on audience in total? That's just one component of it.
Do you think that we're going to see a lot of revenue sharing between content creators and the technology-advertising companies like Microsoft?
Berkowitz: Mm-hmm. I come from the book business, so I believe in that it takes writers like you and other people to make the content more valuable. I think that user-generated is great, but trust is so important, and that there's a real value and cost in creating that content.
It's kind of one of the reasons why I like MSN as a strategy, and Live as a strategy, is because we're not going to be in the content business, but we're actually offering content providers the ability to aggregate. We aggregate audience and share with them that audience for them to go forward. We're taking "best of breed" partners and bringing that content to people, whether it be through Live, or in a different experience, or through MSN. You'll see us absolutely partner with content providers, because there's a huge value to that.
(If) they help create stickiness to the audience in general, they earn the right to have a significant portion of the revenue that comes from that content they create.
Where do you see Yahoo in all of this?
Berkowitz: I think of Yahoo (after) having run a small public company. Now, Yahoo is not a small public company, but because it doesn't have the resources and it doesn't have a diversified revenue stream, it has a challenge. So the challenge for them is: How do they manage their margins at the same time (as they) compete with Google (which has money to invest)? It's going to be a challenge for them to balance the need for investment.
What do you make of your old company, Ask.com? Where do they fit in?
Berkowitz: I like what they do. I think that they have been very innovative. But it's a challenge. I think that the benefit that Ask has today is being part of (Barry) Diller's network of sites. It actually can become the audience, kind of the "mortar" to the "brick" that Barry has built. So I see it as a real strategy and a real positive for Barry.
I think they'll continue to fight for share, battle in search, but I think the long-term benefits to the company are going to be that it will unlock the value of IAC (InterActiveCorp, Barry Diller-backed owner of Ask.com) in a lot more ways than IAC could have unlocked the value before. They may gain share, they may not gain share, and they'll do great things. It's hard to compete just at the level of investment that's going on in the technology space. But at the end of the day, Barry has a good company. There's a lot of things they can do.
Are there areas that people are pushing that overestimate what advertising can do?
Berkowitz: I think search will hit a ceiling at some point.
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