In a chat with Aravind Gowda, Filo - who was in India recently - said rapidly evolving, technically superior mobile devices, including phones, will drive the Internet worldwide, especially in emerging markets.

Excerpts:

Where do you see the Internet heading towards globally?

There are two areas of growth for the Internet. The first being the phenomenal increase in technically superior mobile devices that enable Internet connectivity.

The second area of growth is the social networking and community (user generated content).

When I say mobile devices, it could be the new superior mobile phones such as i-phone and devices which have great capabilities in terms of browser and interaction.  Mobile devices are getting more powerful, networks are becoming faster and we can see a lot more interesting services on them. This will be a global phenomenon. In some countries, getting high end mobile devices and networks may take longer. But it will catch up.

There is a gradual shift in the trend also. The idea that people use mobile devices only for voice calls will change. Though text messages and voice calls will continue to drive the business, complex services and applications will arrive on the mobile devices. In the coming years, we can see people shifting from mere voice services to data services and other applications. They will be spending more on these new services.

The second area, which will drive the Internet, is the community and social space. User generated content is bringing a lot of people together. This momentum will gain strength in the coming days.

Take the same idea and apply to "answers". If a person looks for an answer to a particular question on the Internet, the web will provide the answer.

But we want the person to connect with some other human from a different part of the world, who has a ready answer for the question. It is about collaborating with people worldwide to build a knowledge base.

There should be a lot more interaction and community-based activity in a typical websearch. Websearch has been around for some time. Marrying it with the social aspect will create new products and services. This trend will be witnessed across many products. We are working on such initiatives.

What is the idea behind Mash - Yahoo's new social networking application?

Mash is a new product for us. We are starting to experiment with new ideas of tapping into the social space and community network. We had made a similar attempt in the past. Yahoo! 360 was one such attempt, but with a different approach. We do not know where exactly Mash is heading. Of course, we have a lot of exciting plans for Mash.

As we start to go public about Mash, the plans will be unveiled. At present, Yahoo! Mash can be used only through invitation.

How is Yahoo! countering competition on the Internet?

We are clear about our focus on emerging markets for growth. We have reached about half a billion people and the opportunities are growing. There are still 5 billion people who will be eventually connected to the Internet. We took 13 years to reach the first half a billion people.

The next half billion will come much faster. But they will be from a different space, most of them through mobile devices, probably phones.

The first half billion was the lot of English-speaking people and from other major languages like Japanese and Chinese. But in order to reach the next half a billion people, we have to localise the content.

Most of the English world is disproportionately connected. The remainder is going to be non-English speaking languages. We will continue to support these non-English languages. Our next audience will be lot more from the non-English speaking areas.

It will be fair to say that as we seek these people on the Internet, there will be lot more localisation of the content. The process is already on.

There is an opinion among a section of analysts that Yahoo! should break up its services.

At present, we are at an important milestone. We have done well in the last 13 years. We are strong in certain regions. Yahoo! Japan is one such example. Yahoo! has a lot of great assets.

Right now, our focus is on what more can we do. We have a very strong base of researchers and scientists. We are planning on how do we get the most from what we have.

What is Yahoo! doing about Internet advertising?

We are focusing on three segments - consumers, advertisers and publishers. We are working on a system that will make these three segments to come together to leverage the ecosystem.

We are evolving tools for advertisers in the process. We are also looking at bringing more transparency in buying and selling advertisements on the Internet. There could be an open exchange for advertisements. We are the leaders is display advertisements. We will help traditional display advertising and search advertising to become more effective in the process.

On Yahoo! operations in India

We have a fairly large operation here - right from research to evolution of products for the global market is taking place in Bangalore. We have people working for the US from Bangalore.

We also have people building services for the local Indian market. We also have professionals working for other emerging markets like Vietnam, the Middle East, The Philippines. We want Bangalore to be the centre of excellence for emerging markets.