The Yahoo Episode — With Jim Lanzone

Jim Lanzone is the CEO of Yahoo. He joins Big Technology Podcast for the long awaited Yahoo Episode, a deep dive into a company that remains one of the most visited and influential property on the web. Tune in as Lanzone describes how Yahoo's verticals operate, how the company thinks about generative AI for its search bar, and whether it's still possible to build a solid business on the web. Ranjan Roy joins us as well for a rare Wednesday appearance on the podcast. Tune in for a deep, engaging conversation with a CEO at the helm of a crucial internet cornerstone. --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. Want a discount for Big Technology Premium? Here’s 40% off for the first year: https://tinyurl.com/bigtechnology Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Alex Kantrowitz?

  The Yahoo episode is here, long awaited, anticipated, asked for, and now delivered. Yes, the CEO of Yahoo is here with us to deep dive into the state of the company. Yahoo episode on Big Technology Podcast is coming up right after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya Financial, to go inside a large scale agentic CX transformation, including the business decisions, trade offs,

• 0:46Alex Kantrowitz?

  and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:19Alex Kantrowitz?

  Welcome to Big Technology Podcast, a show for cool headed, nuanced conversation of the tech world and beyond. We're here, we're in it. It's the Yahoo episode. We have Jim Lanzone, he's the CEO of Yahoo, and also Ranjan Roy is here with us, a rare appearance on a Wednesday show. I want to welcome both of you. First of all, welcome Jim, great to see you. Good to see you, Alex. And welcome Ranjan. Ranjan, you kind of kicked this off. I think that we were talking about this on a Friday show, and you mentioned something like Yahoo is the most underappreciated company in the entire tech world. And you expressed your excitement, we had so many people write in talking about how they were interested in the Yahoo episode as well. So I'm curious to hear, just to start off, and then I'll let you ask the first question

• 2:01Alex Kantrowitz?

  to Jim, but set us up here, like talk a little bit about your passion for Yahoo and why you thought this was an episode we had to do.

• 2:09Speaker 01

  Yeah, for me, whether it's media, whether it's technology, whether it's news, there's so many stories that we all obsess over day to day and week to week. Meanwhile, Yahoo is the number one news site in the country still per traffic, number two in sports, number two in email, number one in finance. Eight out of 10 Americans visit a Yahoo property every month. Like, the numbers, when I've heard them, are astounding. Yet, we spend time on the minutia of tiny media startups or tiny tech startups. So, the fact that Yahoo was taken private, is being worked on and a different strategy are being implemented, which I'm excited to learn more about, I think is the most important

• 2:53Speaker 01

  media and tech story around right now. And I'm excited to learn more, along with our listeners.

• 2:59Alex Kantrowitz?

  Media and tech, okay, so now we're really bigger than AI?

• 3:02Speaker 01

  Come on, come on.

• 3:04Alex Kantrowitz?

  So, let's bring Jim in.

• 3:05Speaker 01

  I'm sure there's gonna be some AI in it.

• 3:07Alex Kantrowitz?

  So, Jim, when you hear that, do you think, what do you think? Because, obviously, you're coming in, you were like, pretty humble getting started, talking about, basically, I think there's a quote from you saying that every single product needs work in Yahoo, and you're gonna work hard to revitalize the business. So, like, it's interesting to hear the contrast, right? Like, Ron John and I here are talking about, like, reading the stats and saying this is, you know, huge and underappreciated, and you're like, this is a turnaround story. So, can those both be true?

• 3:36Speaker 02

  I do think that they're actually both true. I've said that before, when, you know, asked about coming here and what was in the decision. Look, it does have a lot of the trappings of a big turnaround. Otherwise, you know, given all the things Ron John said, it wouldn't have been spun out of Verizon at the price it was, which was around $5 billion. You know, for something that's still a top-five property, probably has been top-five every month, as long as the internet has existed. And if you had, if you, if you were to take the name off of it, I've said before, with this many users, this much revenue, this much profit, you know, what would that be worth? How would you think about that company?

• 4:19Speaker 02

  At the same time, it's, it's been through the rayer, you know, over the, over the years, right? Um, a lot of time as a struggling public company, eventually sold to Verizon, spent five or six years there. Uh, and, um, and so, but you know, in, in a lot of ways, both things are true. Um, and that's, that's part of what I love about it and that's part of the challenge of it. But that's also why we're, we're, why we're humble about it at the same time.

• 4:45Alex Kantrowitz?

  You know, in some ways it kind of mirrors the story of the web. I mean, you know, I was thinking about like, why do we care about Yahoo? And then, you know, in many ways like Yahoo was maybe the original way. At least it was for me where people started accessing the web pre-Google, right? And the company still has all this size, uh, yet I guess financially it can be tough to, to make money on the web. So you have all the traffic, um, you've had ad tech, right? To help make money off of that and that's gone through a transformation. Uh, but just from the fundamental level, like, can you still make money on the web? And what is traffic worth these days?

• 5:21Speaker 02

  Well, I think it's all a matter of perspective, you know, there's a difference between the trillion dollar plus companies and what they make. Um, and you can be a very healthy, thriving business at a different size company. And, uh, and you know, searches, I, I used to work in search for a long time and, and back in it now. That, that's one way of making money from a large amount of traffic. Ads are obviously another subscription, lead gen, e-commerce. Some of those are probably the main, the main five. Um, one of the big things that we have going for us uh, is not only size, but also, you know, the majority of our impressions and our, you know, are from logged in users. So we have a huge amount of first party data.

• 6:06Speaker 02

  People are coming direct to us. And so that's another, you know, big difference is that people Choose Yahoo Finance, they choose Yahoo Sports, they choose Yahoo News and Mail. And so, you know, we're not thirsty for traffic and out there trying to get it in unnatural ways. We're lucky to have people coming directly to us. You know, the days of when Yahoo was the one-stop portal is probably something to work your way back to if that were something that anybody, you know, should be trying to achieve at this point. You know, our strategy is much more to lean into our brands and, you know, we've hired general managers to run each one of these brands as an independent business. They're our cousins, they're related.

• 6:48Speaker 02

  People do go from site to site and app to app. But, you know, they each have different ways to monetize and they're in their given verticals. They'd have different audiences. And the strength of the company is actually to lean into that, but not to compare ourselves to Facebook or Google or something much larger. It's, I always say, we're here to compete against ourselves. It's our growth rate versus ourselves and where we are tomorrow versus yesterday. And there's a lot of rate sizing that has to go, you know, to get the company from where it was as a standalone company or part of Verizon to where we need to be as a new standalone company going forward, which is a lot of the work we're doing behind it. But yeah, I think there's, you know, we have the very healthy, thriving audience

• 7:31Speaker 02

  at the top of the funnel and then there's other ways that we, you know, monetize them as we move them through.

• 7:37Speaker 01

  Can you walk through what does verticalization look like across different properties, whether it's finance or sports? I think that's very interesting, how the general manager strategy versus a kind of centralized approach that it sounds like things used to be operated under. But what does that look like in one vertical versus another?

• 7:58Speaker 02

  Well, this is a lesson I learned 13 years ago when I became the CEO of CBS Interactive, which was, it was under CBS Corporation, but we had multiple companies in there, including former public companies like Sportsline and CNET. And we had little ones like Last of Them. And so the first year, my background's in product. So the first year I was like, let's go and tried to run every product myself or with the central team and realized very quickly that that was not going to scale. But the only way to do it was to develop what we eventually called the federal and state model, where every business, every brand has its own GM, governor, and they have their own economy, culture, location, a lot of times, you know, monetization.

• 8:42Speaker 02

  And what you want to do is let them hire people who are talented and entrepreneurial and let them run, running their business. And our job in federal at the central, you know, level of this portfolio is to provide expertise and leverage at the center, maybe provide services that are generic, that you don't want to do more than once. But every one of those businesses then has a GM, has a head of product, has a head of technology, usually has a head of content, a head of design, and you let them go. And I'll accept inefficiencies at the edges in order to let them own the relationship with their customer and be able to develop quickly and with the expertise developed, you know, for that.

• 9:24Speaker 02

  And so what you then wind up finding is you then have people joining you who love or join for the love of the game of that vertical. And so, you know, so Ryan Spoon, who came in, ran ESPN product for eight years, BetMGM, SoRare, he is the GM and president of Yahoo Sports. Toppin Bot, who way back was Jeff Weiner's number two at Yahoo back in the day, but he was the COO of NerdWallet. And so he's the head of Yahoo Finance. And then hired another person from the fintech industry as the head of product. Kat Downs-Moulder is the, is the GM of Yahoo News and Home. And she was the chief product officer and managing director of The Washington Post.

• 10:07Speaker 02

  And so down the line, you get the, I brought in some of my search guys for, for the search team. Et cetera. So you have dedicated experts who are the best at what they do. My job is to support them, maybe play dentist on their plans and some of their processes and people. But you know, otherwise like I'm there to let them run.

• 10:28Speaker 01

  How does the legacy Yahoo tech stack influence that verticalized federal state model? Like, does everyone, are they able to build whatever they want? Does that create a huge challenge or headache?

• 10:42Speaker 02

  There is a platform that everybody is built on. But it's very nimble, enabling them to really control their own destiny and to build what they want to build. And so we do have things like trying to be more consistent with fonts or with, you know, you know, certain ways that we render things. But otherwise, I actually like them to be independent and to let Yahoo Finance really super serve finance users who are really loyal to that product, who have certain needs. In fact, it's probably a good time to back up one more step, which is when we got here, you know, the first thing to do is to not overreact and to really understand what makes Yahoo tech,

• 11:23Speaker 02

  what makes all these people who use the product so are so loyal to it, trust it so much over the years.

• 11:31Speaker 02

  But at a certain point, you did, you know, you do sit back and say, you know, if the average public company, I think I heard the other day is why around 10 and a half years? We've been here 29 in various formations.

• 11:45Speaker 02

  You know, what is our, what is, what is the mission today? What is our reason to exist today? And why have people been so loyal to it over time? Including the fact that, you know, they miss search, which is kind of something you can't undo. Right? That, and we could talk about that, but the move to Google in June of 2000, you know, was its own thing that time was spent trying to undo. But at this point is not a realistic job. Like, we can still participate in search and make good money from search. But like, Google is Google at this point.

• 12:17Speaker 02

  And so if you go back, the original Yahoo was the guide to the world wide web. And Alex, to your point, what happened was, you know, the internet was created and then Mosaic and Netscape was created to let you access it, but nobody knew how to get to anything. And so that's what Yahoo was for. In our best versions of ourselves, we are still that trusted guide to every one of these vertical categories. As we think about other categories that we could be in going forward, we would think about the same way, like where is that trusted guide needed to help people accomplish their goals, big or small, when they come to Yahoo? And not to be judgmental about that. It could be the weather, or it could be trying to make a million dollars, or it could be saying your March Madness brackets this week, which I was just doing before we got online here. You know, it could be any of those things.

• 13:02Speaker 02

  Our job is to compress the time it takes for you to accomplish those goals. And that is very different, vertical by vertical. You know, what you're trying to accomplish in Yahoo Finance is different than news, is different than sports, is different in search or mail. And that's the framework that we've built out to attack everything that we're doing.

• 13:22Alex Kantrowitz?

  Yeah, kind of, it does build on that original portal mission, right? Like, if you would go to the portal to figure out like what the sports score was, or who won, read the game story, find out how your stocks are doing, and then like your content businesses, I guess, are natural evolutions of that. So it seems like you're planning to think of new areas to expand into that you could play a similar role.

• 13:44Speaker 02

  Well, I don't even think of them as content. We have content.

• 13:48Alex Kantrowitz?

  Yes, I want to actually talk to you about that, yeah.

• 13:50Speaker 02

  Yeah.

• 13:51Alex Kantrowitz?

  Go ahead.

• 13:52Speaker 02

  Well, as I say, if you think about what we do, and again, Yahoo CEOs used to be beat up about whether they're a media company or a technology company.

• 14:00Alex Kantrowitz?

  Yeah, for some reason, the media loved asking that question, which is, I think, silly. It's hard to be pure one or the other. Go ahead.

• 14:08Speaker 02

  Well, the real answer is we're a product company. And we deploy media to help people accomplish their goals, and we use technology to deliver all of it. But, you know, so the real underpinning of Yahoo are unique data sets, superior aggregation, and then having content anchors that provide context.

• 14:32Speaker 02

  For everything that you're doing. And so those are really the three underpinnings of every vertical that we that we have. But, you know, setting your fantasy lineup is not content. You know, setting up your stock portfolio and checking it and making trades is not is not necessarily content. And you can kind of go down the line and just say, of course, news is, although things like, you know, weather is, you know, there are other parts of news that that aren't. Obviously, mail and search are not media and content in the traditional sense. So I think we deploy media to help people be successful, but I don't I don't think that's all we do.

• 15:07Alex Kantrowitz?

  Right. And this is sort of like one of the, it seems like one of the key insights that you're bringing into the company is that, and maybe it was there before, but you certainly seem to be enhancing it. It's like we're looking at all these struggles in the content industry or content, journalism, news, media, you know, pick your, pick your noun, right? And a lot of them seem to have been betting entirely on just the stories. And I look through like every vertical that you guys have, and it seems like it's more. For instance, in finance, you have Yahoo Finance Plus, which has data and research tools and 2 million monthly users. And I read that it's growing double-digit percentages year over year.

• 15:48Alex Kantrowitz?

  And then you, with Yahoo Sports, you you bought the peer-to-peer gambling site, wager. So it's like finance plus extra services. It's sports plus, you know, potentially some gambling. You know, you look, you look through it. Each one of these content verticals has something more. And it looks like you've also, in Yahoo Finance, scaled back advertising 40%, which like, if you think about a traditional quote-unquote content play, no one would ever do that.

• 16:17Speaker 02

  Well, yield, yield went up, actually. So there's a logic to that.

• 16:21Alex Kantrowitz?

  Right. So, but I guess like, to me, is that, is that sort of your answer of like, what it, what doing, what, running a successful business on the web today really requires? It's like both that content hook, but then also some sort of deeper engagement with the audience that goes beyond just reading the story.

• 16:42Speaker 02

  Yeah, and again, we're lucky to be in verticals and own products where we're not chasing traffic. You know, 86% of US internet users hit Yahoo every month. I think it's 36 or 36.5 billion minutes per month just in the US. So there, I do think that that's common of every major consumer property, that there's a top of the funnel that you have to nourish. You know, you have to have users that to be deeply engaged. You have to have them coming in a certain frequency, right? And I think those are the union economics of the user side. We talked about the financial ones. And that really is, is making sure that you're, you know, you're at the top of your game in, in serving their user needs. And that, that

• 17:24Speaker 02

  sounds like, you know, cliche, but that's, that's absolutely the job. And over time, though, that changes always. So you're never done. It's like, it's, you know, paying the Golden Gate Bridge, which is why I actually think Yahoo can be around another 29 years. It's like the need, people's goals are not going away. And our first job is in the verticals that we already own, to do an A plus job of delivery against that in the most modern, effective way possible. And that's all the work, you know, I think that we're doing now. We also could, could very easily play in new verticals, or go more seriously into them. Like, if you look at the rankings, we're number one in beauty and fashion, even though we don't really have, I mean, a really dedicated product to that. You know, things like health, travel, these are all places that I think we have a right to play, local.

• 18:09Speaker 02

  There's so many things that we could do. And I think that the, the name of the game would, would be the same in, in every one of those.

• 18:17Speaker 01

  So where does the Yahoo brand fit in here? You'd mentioned bringing on a new CMO, head of comms. But you'd also said at the beginning that any one of these brands, almost if you remove the Yahoo brand, also stands on its own in terms of the numbers, in terms of users and revenue as a pretty significant business. So how do you see the Yahoo brand evolving? Or what are you trying to do with it right now to unify everything?

• 18:43Speaker 02

  Well, step one is to lean into the individual brand. So you have to nail that first, given where, you know, again, the days of a one-stop portal were a long time ago. I mean, for the internet in general, that's not how it's used at this point. But I do think the notion that if you really understand your users and you really personalize Yahoo, the way it could be personalized, if you do deploy AI, which we're already doing, you know, across every one of these verticals, it's already embedded into the products we're building behind that.

• 19:15Speaker 02

  I do think that the notion that we could anticipate user needs and deliver what they want, you know, in the least amount of work possible is another way you could, you know, you may say it's like a portal, but you're kind of coming out for a different reason, but it kind of gets you back to the same place. And we do need the Yahoo brand to be really strong in support of those brands. And then eventually, if you do it right, then the Yahoo brand itself can have its own place. And I think coming back at that in a, you know, in a slowly but surely over time. One of the things I've found since I got here is that, and maybe this goes to some of the retro vintage flavor

• 19:59Speaker 02

  that's really in society right now, there's a lot of latent love for the brand. I think people are rooting for it deep down. They would love to see us be able to, you know, kind of get it back to a good spot. And, you know, we have to reward that faith with great products. But I think if we do, I think that there's an opportunity for that. By the way, one really small example is we just dipped our toe in the water at South by. I don't know if you guys know what Pool Suite is? No, what is it? It's this hipster retro brand. It's almost impossible to describe. It's like a lifestyle brand that this guy Marty in the UK developed. I mean, it's, you might have pictures of people drinking martinis and jaguars.

• 20:42Speaker 02

  You might have pink flamingos floating in pools. He's selling a sunscreen and does like... Huge amount of revenue selling vacation sunscreen that he developed. It's a vibe, this brand, and and he reached out. And we did a collab party at South by Southwest rooftop. 12 hours, 12 to 12. And it was, it was the highest sum of RSVPs they've ever had for anything. And and I think that there's that that how there is a little latent love there for the brand if we reward it the right way.

• 21:15Speaker 01

  Yahoo's vintage and retro now. I like it.

• 21:19Speaker 02

  Modern vintage is what I would call it.

• 21:21Speaker 01

  We made it 25 minutes in when AI has finally been brought up. I was curious, I mean, are you saying the vision is that the next kind of iteration of the Yahoo? Promise and brand is some kind of AI driven personalized experience, given the stronger each individual vertical gets? Is that the larger vision or?

• 21:43Speaker 02

  That's definitely part of it. I think that's a destination though for it. In the meantime, you guys have talked a lot about this, that, you know, the in the in the near future, the most common way for AI to be deployed, if you're not talking chat GPT or some of the, you know, some of the companies that have taken off, is going to be, you know, for core services and how is it supporting that? Both in inside the company and then for consumers. So, you know, going back a year, we we launched AI into mail to help you write the mail, you know, write your email, edit it, search for it, summarize it. We, you know, it's deeply embedded into fantasy sports, believe it or not, to help you set your lineup.

• 22:27Speaker 02

  Without you actually doing any work, you got to pay a subscription tier for that product. Even things like smack talking emails that go out on Mondays after after the games on Sundays, summarizing that week's games, making fun of people for the the name of their team that was all happening through AI. There's a lot more happening with that. Finance, obviously, helping you, you know, invest more smartly. So every every one of these verticals has it. Obviously, we have search too. And and so we have our Microsoft relationship. You know, that's that goes back a number of years and will go a number of years into the future, but. Bringing that into search is obviously happening is a no brainer.

• 23:09Speaker 02

  So what I'd say is it's deployed across everything we're doing. And then inside the company as well, like ways to make us more efficient. You know, whether it's customer service through to engineering.

• 23:22Alex Kantrowitz?

  I definitely want to talk about that search bar, right? And that partnership with Microsoft. So why don't we take a quick break? And after the break, we're going to talk about, I'm looking at Yahoo right now. The top bar right there is search, and that's an important piece of real estate for you guys. And I guess for Microsoft as well. So let's take a break and talk about what's going to happen with that thing right after this. This episode is brought to you by App Point. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what App Point does. For 25 years, they've been the trusted layer beneath the world's most demanding data,

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• 25:37Alex Kantrowitz?

  in the show notes. And we're back here on Big Technology Podcast with Jim Lanzon, CEO of Yahoo. Great to have you back, Jim. Good to be here. Ranjan Roy is here with us as well. The Yahoo episode, we're doing it.

• 25:51Speaker 01

  The Yahoo episode.

• 25:53Alex Kantrowitz?

  I can use it for my giant Yahoo coffee mug.

• 25:55Speaker 01

  And a Yahoo football helmet in the background that's vibing pretty strongly as well.

• 26:03Alex Kantrowitz?

  Jim got the memo. BYU vibe to it, but yeah.

• 26:07Alex Kantrowitz?

  So before the break, we were talking about search and obviously like you guys will have decisions to make on that search bar. We just, we talked about this a couple of weeks ago, but Gartner had this number out that said traditional search was going to decline 25% in a year and a half, or a year and three quarters by 2026. And I interviewed the Gartner folks and we talked about it and their big thought there was like, it's going to take basically big platforms with a lot of search real estate to say, we don't want traditional search anymore. We're going to implement generative AI to make this move happen. Cause I was like looking at it and saying, what are you talking about? Like Bing hasn't made Google budget at all. But their idea is basically like big platforms, whether

• 26:51Alex Kantrowitz?

  that's Apple or somebody else, you know, might say, well, we much prefer to serve generative AI answers to our audience or our users versus like the traditional link, link project. So what are you going to do? And, and what are the considerations that go into a decision like that? Because I imagine you're evaluating it and you have the right partner in Microsoft. So walk us through a little bit about what's going to happen there.

• 27:18Speaker 02

  I think it's a little more simple for us, for us, and it's funny, I definitely did a deep dive after you, you all had that, had that discussion and I read everything about it and, and, um, I mean, I believe they were saying it's, it's based on, uh, on, on, on decisions Apple was gonna make in 2026 and they're, they're projecting a lot with that. Yes, a lot of, a lot of things have to go right.

• 27:45Speaker 01

  A lot of extrapolation.

• 27:47Speaker 02

  My first 10 years in search, including Ask Jeeves, where we were part of the turnaround team there. Um, so natural language and all those things are near and dear to me. Um, direct answers, all of that. Um, yeah, look, for, for our search, the, the, I mean, there are people who start their search experiences with Yahoo. A huge number of people are searching because they're there for all the other services that we have. Our job is to be awesome so that the next time they're with us and think, yeah, may as well just search Yahoo, um, we reward that. That's actually a really proven way, uh, to grow search. Um, I've done that in the past. So in order to do that, obviously AI answers are, are gonna be a big part of

• 28:32Speaker 02

  it. Number one, because I, I do believe it's growing the category. Um, I don't think it's a one for one replacement for every type of search that's happening. I think that, um, what we used to call smart answers, what Google calls one boxes are already bringing that directly into the page. So you're getting both types of search. I actually, I think that's way more common than, than people who are attacking, uh, Google and, and Bing are, are acknowledging. I, I think you, you kind of can do both in, in the search UI. Um, and, you know, we're gonna do this. We, we obviously need to do the same thing. And this goes way back for me because my, our team at Ask, in that 2003 to 2007 period, we, we really led the way on direct answers and getting beyond template links. That's

• 29:16Speaker 02

  kind of what we were known for. Right. And, yeah, but that was, well, that was very different than the original Ask, which was natural language that really couldn't really answer anything because it was just so early. It was just too early. Um, we actually, ours is pulling from structured databases to, to bring, you know, weather or, you know, lyrics or whatever's going to be right into the page. And that, that really is a great way to use AI-generated answers right now. I mean, you know, including if you type in, how does perplexity AI work into, into Google with Gemini lit up and into perplexity is very interesting. Uh, who gets the answer right?

• 29:53Speaker 01

  Who gets it right?

• 29:54Speaker 02

  They pull it from perplexity. Uh, Lexi's looking, is pulling it from Reddit and some other places.

• 30:01Speaker 01

  Oh my God. That's fascinating.

• 30:03Speaker 02

  It's, uh, it's, it's so broad. Search is so broad. And I definitely think it is incrementally, um, added to the category. You're now asking things you wouldn't have asked a search engine.

• 30:15Speaker 02

  It is creating answers the search engine was not able to do, right? Um, by predicting the next word, et cetera, from, from its, its database. Um, and so, uh, so look for, for Yahoo, we're definitely incorporating it, uh, in everything we do, including search. And, um, and I think it's, it's as much an opportunity as a threat to the search category. They're both true.

• 30:37Speaker 01

  Wait, can you walk through, you said your experience at Ask Jeeves was a turnaround? What was the, what, what was the turnaround experience? And I guess, were there any valuable lessons that you're bringing to the Yahoo story now?

• 30:54Speaker 02

  Oh yeah. I mean, so we, our new team got there at the end of 2001 after the market had crashed. I think I was announced on nine 11 as joining as the head of product and, um, and our stock was under a dollar. Uh, it had been crushed and then the company had gone, you know, I think had, uh, had to, uh, remove 75% of its employees. It was definitely a turnaround. It wasn't profitable. And so, and was doing too many things. There were eight different things from enterprise search to consumer search that was trying to do, including a bunch of other things. And so it was our first lesson, my first lesson in focus, in doing what you're really

• 31:35Speaker 02

  great at. And the fact that if you have a large user base, that's product has seen better days, where the, you know, the team could probably be improved, where the brand had seen better days. If you just focus on crushing it for your, for your users, for the users you already have, that that actually will pay off over time in improvements in retention and frequency. And search, that's linear. In 2002, we switched to Google AdWords. I think we were the first ones to do that, which helped us become profitable and set our stock on a, I mean, I think we 50x that thing from there. And then we sold IC in

• 32:13Speaker 02

  February of 2005. And so that, that lesson of, you know, huge audience with, with all these things that could be improved is like the, the core basis for a turnaround is something I took to CBS Interactive where we had that problem across a number of our properties. If you do that, you then make your own fuel to invest. And at Ask, that was definitely into investment, even deeper into search innovation. At CBS, it was, we actually launched CBS All Access, which became Paramount Plus years later. The first plan we introduced

• 32:52Speaker 02

  for that was November of 2011. It launched in October of 2014, not as a, how do you save, you know, the streaming future? You know, it was much more as a freemium product to introduce a subscription layer on top of our free layer. And we funded that ourselves from within CBS Interactive, based on the performance of the other brands that had been part of the turnaround. So, yeah, I mean, that, that was part of when, when I started talking to Apollo about Yahoo, before they bought it, you know, that was my thesis. I was like, if you, for the right price, I think it's the mother of all turnarounds. Even though, again, to our earlier conversation, it's already, you know, doing a lot of revenue.

• 33:33Speaker 02

  It's already very profitable. But getting into the growth trajectory that would make you a sustainable company for the future is really the, the trick here. And that's the work we're doing now. But, but based on a lot of the lessons I had in the past.

• 33:49Alex Kantrowitz?

  Let me ask you about private equity, okay? Because like the public perception of private equity firms is not very, very, unless you're an investor in them, is not very positive. I think like most people think that a private equity firm is kind of like comes in and vultures out all the potential profit and then, you know, basically leaves the skeleton with all the money and that's the end of the company. What do you think about that?

• 34:14Speaker 02

  I think that's

• 34:15Alex Kantrowitz?

  How's that different here?

• 34:16Speaker 02

  Really broad strokes because I have friends in other private equity firms. Definitely, they all have their playbook and some of those playbooks involve what you're talking about. Some involve putting in their own people to drive their specific operational playbook. Forget just the reductions, but doing that. And, you know, my only personal experience with private equity has been my experience with Apollo, which has been great since day one, since my first conversation with them, through to them buying it and then turning around and recruiting me in to then the last two plus years working for them, has been great. I mean, again, we've been on the same page about the thesis the entire time.

• 34:59Speaker 02

  They've, you know, it's, I should say, one of the benefits for us has been that it's one of the fastest returning deals they ever had. So, you know, we did a number of deals to sell things that we owned. You know, we sold a, we had a CDN business that we then merged with another company to become a public company. We, you know, we've, you know, so we've returned a lot of cash to them that lets them invest in the upside here. So it's just been a different situation, I think. And then I think we probably have tripped them out a bit in our new team being proactive with making sure that we have the right sized company, the right platforms that we're supporting.

• 35:44Speaker 02

  And they haven't had, you know, whether they were or not going to come to us to say, let's reduce these costs. The costs have been naturally reduced here in a strategic way, not to save money because we didn't, you know, we've been making a lot of money. So we don't, it hasn't been for that reason. It's been to strategically position us for the future with more, you know, doing more what we should be doing and less of You know, everything that we inherited. So, um, so maybe this is a one-off in terms of that experience, but Reid Raymond, who's the chairman, and then David Samber, Lee Solomon, Yifei Wang, or the other three main Apollo people involved, have just been great with us. We involve them deeply on a, you know, daily and weekly basis to how we're doing things, not with a gun to our head, but because they're helpful.

• 36:29Speaker 02

  So I don't have a, I don't have, I don't have a dramatic.

• 36:33Alex Kantrowitz?

  No, that's a good answer. Yeah.

• 36:35Speaker 02

  No, I mean. I don't care if we screw it up, it'd be different, but things have been going pretty well so far.

• 36:41Speaker 01

  Well, what does success look like then? Because if you're saying, again, if each individual property can stand alone on its own, if as a company that's still profitable, you know, it's still growing, at least in the way that you want it to, what does that, what does success on the turnaround look like then? What's the bigger two to three year vision, or whenever an IPO would be coming? How does this get pitched to the markets?

• 37:10Speaker 02

  Well, look, the only, the only pitch you can make, uh, I always, you know, as you know, companies are bought, not sold, right? And so the thing that we have to do, no matter what the outcome is here, and whether that's, um, all of Yahoo's acquired, parts of Yahoo are acquired by different people, we have an IPO, like whatever those are, that the task for my team doesn't change, which is it's about growth, it's about growth on the user side, the revenue side, the EBITDA side, profit side, and, um, and, and make, you know, again, I've, it's weird because I've founded two companies, uh, but I've spent the majority of my career now in public companies and, and clearly what you need is sustainable growth over time, right? Um, companies can go public too early, they can

• 37:55Speaker 02

  be in a position where they're struggling to make quarters, like that, that's not the right place, uh, for anybody. So, um, so I think we're, you know, this is the first time Yahoo's been private since 1995.

• 38:07Speaker 02

  And we're taking advantage of that to build this out the right way. We've made a lot of changes. We're still digesting a lot of those changes with the puts and takes to get to the other side. We're investing in every product that we own in a major way with an awesome team. And that's the plan right now. I think you will see us continue to be aggressive in terms of trying to figure out what we can add to it, which would be in two ways. We could, it could be a major deal that adds a vertical or adds a major new product. It could also be, you know, we've done, Alex, as you point out, some of the smaller deals to enhance products that we're building, get us there faster. And again, we're not aqua hires, but actually like, you know, products that we think are important to what we're doing.

• 38:50Speaker 02

  I think you'll continue to see that. And, uh, and so we're, you know, we're building this transformer here to, uh,

• 38:59Speaker 02

  to, to, you know, to be a healthy fighting machine in the future.

• 39:03Speaker 01

  Wait, is there for that kind of vision of sustainable growth? Is there some magic formula you would think of around kind of advertising revenue versus premium subscription revenue? Or, because obviously every media company is always asking itself that. What's the, what's the ideal combination? Is that, is there some high level goal you have around that or insight?

• 39:26Speaker 02

  Again, I think it's just different. If you're, if you are a premium content brand, then you can, you have a right to have a percentage of your, your users convert to subscription. If you're super premium, maybe your only subscription. And there may be, maybe perhaps a limit, depends if you're Spotify or Netflix versus The Economist or, you know, The Atlantic or The New Yorker. What your, you know, what your scale can be for that. For a company like ours, we're monetizing in all five of the ways I mentioned earlier, right? And it's always a funnel. Top of the funnel is the broadest. It's the most free and you're monetizing that audience in certain ways.

• 40:08Speaker 02

  Down funnel, you earn the right to convert them into premium products and just, you know, subscriptions could be one. Sport, you know, maybe betting is, uh, is another way you might think about that. But you, you convert them down, down that pathway. That's really how you run these kinds of properties, um, or at least the majority of them, right? Things like search are different. Um, we do have a subscription layer for every product that we offer. I think investing more in that and understanding what super fans of our products really want and need is part of what we talk about every day, you know? I have a board meeting Thursday. It's a part of our deck.

• 40:44Speaker 02

  So we are actively thinking about that in every one of these verticals and building behind it. So it's a look, it's not, it's not done overnight. This is always going to be something that took a little while to, to get everything right. And we're, you know, look, we also, we have the kind of team that there are two types of people. There's people who are like, they see this possibility of turning Yahoo around and where this could get to and, and the brand, and they run towards the fire and they want to be a part of that and they, they would be proud to be part of that outcome. And there's people who are more conservative and don't, it's not for them. It really is a Rorschach test between the two types of people as, as we're recruiting people in here. But our team is super energized behind all that and, um, and working like crazy to, to do it.

• 41:30Alex Kantrowitz?

  So as we've been talking, I've been thinking about something that you said like, I don't know, 15 minutes ago, and I can't get it out of my mind, which is that when you apply AI in search, you can have like normal search results and AI generated search results. So I'm just kind of curious to hear from your perspective because, you know, you also mentioned that you're private, like you can, you have some leeway to try some things and, and, you know, potentially even say, all right, we're going to lose some money in the short term to try to make a better product. Whereas like something like a Google doesn't have that leeway, right? That's been like the innovator's dilemma for them. How do you choose when to do generative AI versus traditional search? And in which, which use cases do you, is it sort of dynamic? Is it a percent you roll out? Like, talk us through that decision.

• 42:15Speaker 02

  I love it. It's, um, it's funny. I always used to say, because you know, back, whatever, 15, 20 years ago, there was only search. I mean, it was such the, the heart of the game, pre-social media, pre-mobile. Remember when I got to CBS or Active in 2011? Only 6% of our traffic was mobile. It was just so early for so many of these things. And so everybody had an opinion on search and I would always think it's so easy on your side of the search box. If you think about what we're dealing with on this side and all the different things we have to do to get your answer right in the blink of a second, um, or to give you the right resources or to give you related searches to, you know, uh, uh, to iterate on your query, like all these

• 42:54Speaker 02

  things. So I, I, I automatically just in my product nerd side, just go to that. It's, it depends on the query and that's going to unleash a different tree structure for, for what you might present, what you might do that as you follow that thing down, your, it's just continues to evolve. And, um, and again, I, you know, the, the, the fact that someone would spend 21 minutes on perplexity versus just trying to get to a, a navigational query is one example, or a quick answer, what time it is, what's the weather, how does perplexity work? Um, as another sports scores is being one, or, you know, the history of something is another, or, or it's just, it is all different. And I just

• 43:36Speaker 02

  look at generative AI as another tool to deploy. This is clearly whether it's Bing or ChatGPT standalone, or perplexity standalone, hitting all the databases they're hitting, or now Apple and Google and how they're going to do it. They're all going to be doing that the same way. And so for some queries, it is just generative AI and for some it is just a link in every version in between.

• 43:59Alex Kantrowitz?

  How difficult of a product problem is that to be like, we, basically you're guessing the intent of the user. You're like, this user probably wants a generative AI answer versus this user wants 10 blue links. How difficult of a product problem is that? And have you made any progress on solving it?

• 44:14Speaker 02

  It gets easier the more queries you have. Um, and so we, we actually own the patent to that, uh, back in the day, an ask of, uh, uh, you know, user behavior algorithms. Um, and, uh, and so that was a deep part of our search results at the time and how we decided what to present to you. And so it always gets easier. If you can relate this query to that query, especially in that if you know the user, you know, it gets easier as well. So I do think scale really does matter, um, for that.

• 44:47Alex Kantrowitz?

  Do you anticipate this is going to be the way that, that all search engines handle this? Cause it sounds like a pretty novel solution. Go ahead.

• 44:55Speaker 02

  I think the challenge is cost. That's one. These are very expensive. Answers to generate.

• 45:01Alex Kantrowitz?

  How much more does it cost to generate a generative AI answer versus a normal search answer?

• 45:06Speaker 02

  You all know the answer is 20x and I don't know what the real answer is. It's out there somewhere. I know it's a lot more. So, yeah, I mean, clearly, look, it's already happening. Everybody's already decided it. And to your point and Brad Gerson's point, I've seen it make a lot.

• 45:28Speaker 02

  You know, their margin is someone else's opportunity and I'm sure it's going to be a part of the dynamics of the category. I think, you know, we're not, we're not in that situation. And one of the things for me is focus and I can just focus on what I can control here.

• 45:45Speaker 02

  Where deploying those things in service of the user is a no brainer.

• 45:49Alex Kantrowitz?

  Are you definitely going to do this with Microsoft or are you thinking about building something on your own?

• 45:53Speaker 02

  I think it depends on, on what category you're talking about. So we're talking to everybody and considering all options. We have a very deep partnership with Microsoft, so there's a lot we will do with them as well.

• 46:05Alex Kantrowitz?

  Cool.

• 46:06Speaker 02

  Yeah.

• 46:07Speaker 01

  Rajan? I have to, I have to ask, Gen Z, the next generation, how do you pitch the Yahoo brand experience to, you know, the next, whether it's a pool suite.net South by Southwest party. But, but I think at a higher level, like especially because that idea of a destination or a portal is so foreign unless it is, you know, an endless scrolling feed or social network and type app. Like what's the Yahoo pitch to the next generation?

• 46:41Speaker 02

  Again, I don't think you start with portal. And I'm not even sure it gets back to that. I'm not even sure that's the right exact way to phrase what the end goals should be. I think it should be, you know, how can we help you achieve your goals with as much value added as possible in both maybe anticipated ways and unanticipated ways to help you do as fast as possible to make you effective. That will transform into, you know, including using AI into all kinds of ways that we'll deliver that. Where we're starting from, this is where, you know, Alex teased me for saying we're being humble about it, but it's enough to be this size, top five internet property with, you know,

• 47:22Speaker 02

  this level user base with, with being number one or number two in these categories that we get a nail or otherwise people will be coming after us in those categories too. If you do a great job at that, I think it always opens up other doors for where you go. And to the point on Gen Z, I definitely, you know, it's interesting. It's, um, we're not as well known to them for sure, but that depends on the category. You'd be surprised how balanced the user base of Yahoo Finance and Yahoo Sports are, right? Because we're, you know, a lot of people's favorite fantasy platform and we're definitely the, uh, you know, the Bloomberg for the retail investor, essentially, right? And so, uh, I mean, the number of, and so that hits every age group.

• 48:06Speaker 02

  So, you know, we're starting from a better spot than you would think with that, but clearly, you know, that's part of the roadmap ahead for where we have to get to.

• 48:14Speaker 01

  I think, uh, for listeners who were not around during the time Ask Jeeves, which we've been talking about, I had to look it up just to remember it. The logo was a butler, like an old timey British butler who will think his hand up serving you the answer. I think that's what's needed to bring back, uh, to introduce it to the next generation.

• 48:34Speaker 02

  We actually moved on from Jeeves in 2006 and

• 48:38Speaker 01

  Oh, the butler was no more?

• 48:40Speaker 02

  He was. It became just Ask.

• 48:42Speaker 01

  Ask.com.

• 48:43Speaker 02

  It became, he went away. Well, they came back in the UK later. Um, and we threw a party at this, at this big search engine conference they used to throw where we froze him in carbonite, like Han Solo had Darth Vader walk him in with stormtroopers.

• 49:01Speaker 02

  It was pretty funny, but um, but yeah, I mean, that was very, you know, that was founded in 1996 and it was early days. But again, there were probably 10 public companies that were search engines in the, in the web 1.0 boom. And we were the only ones to make it through that wasn't Google, you know, Microsoft or Yahoo.

• 49:18Alex Kantrowitz?

  Rest in peace, Lycos.

• 49:20Speaker 02

  A lot of things, right?

• 49:22Speaker 01

  AltaVista, yeah.

• 49:23Speaker 02

  Yeah, well, it's funny because we now own that. So the brands that are under, that were inherited, that were, you know, Netscape, AltaVista, uh, uh, Inc., you know, Inc. to me, I mean, you'd be surprised the number of brands that are actually buried somewhere inside this company from that era.

• 49:44Alex Kantrowitz?

  All right, Ron, you got anything else, anything else?

• 49:46Speaker 01

  Sorry, I just had to ask once more, the butler, the butler was in Carbonite and walked out by Darth Vader and the Stormtroopers. Did I have that correct?

• 49:56Speaker 02

  Because that was, you know, you could always unfreeze him.

• 50:00Speaker 01

  Yeah. The 2000s, 2000s internet, wild times, 2006.

• 50:07Speaker 02

  2006, yes.

• 50:08Alex Kantrowitz?

  I'm sad I missed that. It sounds like a good party.

• 50:11Speaker 02

  Yeah.

• 50:12Alex Kantrowitz?

  All right, Jim, so great having you. Thank you for swinging by. Thanks for all the insight and hope to speak with you again soon.

• 50:19Speaker 02

  Okay. See you later.

• 50:20Speaker 01

  Thank you.

• 50:21Alex Kantrowitz?

  All right, everybody. Thank you so much for listening. This week on Friday, Ron John's going to be in France. He's actually there now, so. Uh, but Reed Albergati is coming on to co-host the Friday show, so stand by for that. Semaphore Technology Editor Reed Albergati will be breaking down all the week's news and we will see you next time on Big Technology Podcast.

• 50:44Speaker 03

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