Big Technology Podcast - The Yahoo Episode — With Jim Lanzone

Episode Date: March 27, 2024

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: [e-mail]

The Yahoo episode is here, long awaited, anticipated, asked for, and now delivered. Yes, the CEO of Yahoo is here with us. It's a deep dive into the state of the company. The Yahoo episode on Big Technology Podcast is coming up right after this. 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 and Alex. And welcome Ron John. Ron John, 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 your excitement. We had so many people right 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 to Jim. But set us up here. Like talk a little.

little bit about your passion for Yahoo and why you thought this was an episode we had to do. 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 stills per traffic, number two in sports, number two in email, number one in finance, eight out of ten Americans visit a Yahoo property every month. Like the numbers, when I've heard them are astounding, yet we, you know, spend time on the minutia of tiny media startups or tiny tech startups. So the fact that Yahoo, you know, 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 media and tech story around right now. And I'm excited to learn more along with our listeners. Media, oh, media and tech. Okay, so now we're really saying. I'm bigger than AI. Come on. Okay. So let's bring Jim. I'm sure there's going to be some AI in it. So Jim, when you hear that, do you think, what do you think? Because obviously you're coming in, you were like pretty, 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 going to work hard to revitalize the business. So like, it's interesting to hear the contrast, right? Like Brunton 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? I do think 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, if you were to take the name off of it I've said before, with this many users, this much revenue, this much profit, um, you know, what would that be

worth? How would you think about that company? Um, at the same time, it's, it's been through the rare, you know, over the, over the years, right? Um, a lot of time, uh, as a struggling public company eventually sold a Verizon, spent five or six years there. And so, you know, in a lot of ways, both things are true. And 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, why we're humble about it at the same time. 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, 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

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 but just from the fundamental level like can you still make money on the web and what is traffic worth these days well it's all a matter of perspective you know there's a difference between the trillion-dollar-plus companies and what they make. And you can be a very healthy, thriving business at a different-sized company. And, you know, search is, I used to work in search for one time and I'm back in it now. 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 five. One of the big things that we have going for us 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. 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 on-house. natural 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. There are cousins. They're related. 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 right sizing that has to go, you know, to get the company from where 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 at the top of the funnel, and then there's other ways that we, you know, monetize them as we move them through. Can you walk through what does verticalization look like across different properties, whether it's finance or sports? I think that's very interesting, had the general manager strategy versus is 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? 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 LastFM.

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. 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. And what you want to do is let them hire people who are talented. an entrepreneurial and let them run running their business. And our job and federal at the central 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 as a GM, has a head of product, has a head of technology, usually as 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. 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, bet MGM, so rare. He is the GM and president of the Iowa Sports. Top and Pot, who way bad. was Jeff Wiener's number two at Yahoo back in the day, but he was the CEO of NerdWallet. And so he's the head of Yahoo Finance. And then hired another person from the, you know,

fintech industry is the head of product. Kat Downs Mulder is the, is the GM of Yahoo News and home. And she was the chief product officer and managing director of the Washington Post. And so down the line, you get the, I brought in some of my search guys 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 dentists on their plans and some of their processes in people. But, you know, otherwise, like, I'm on there to let them rent.

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? 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, 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

you high tick, what makes all these people who use the product so are so loyal to it, trusted so much over the years. But at a certain point, you did, you know, you do step back and say, you know, if the average public company, I think I heard the other day is only around 10 and a half years. We've been here 29 in various formations. You know, what is our, what is, what is the mission today? What is our reason to exist today? And, and why have people been so loyal to it over time, including the fact that, you know, they, they miss search, which is kind of something you can't undo, right? And we 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. 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 bigger, small when they come to Iowa and not to be judgmental about that. It could be the weather or it could be trying to make a million dollars or you'd 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. 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. 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,

or 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. Well, I don't even think of them as content. We have content. Yes, I want to actually talk to you about that. Yeah. Go ahead.

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. For some reason, the media loved asking that question, which is, I think, silly. because it's not it's hard to be pure one or the other go ahead well the real answers were 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 um we you know so the real underpinning of yahoo are unique data sets superior aggregation

and then uh and then having content anchors that provide context uh for everything that you're doing And so those are really the three underpinnings of every vertebral 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 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 aren't. Obviously, mail and search are not media and content, the traditional set. So I think we deploy media to help people be successful, but I don't, I don't think that's all we do. 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. And then with Yahoo Sports, 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 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. So yield one up, actually. So there's a logic to that. Right. So, but I guess like to me is that, is that sort of your answer of like 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. Yeah, and again, we're lucky to be in verticals and own products where we're not chasing traffic. You know, 86% of the US internet users hit Yahoo every month. I think it's 36.5 billion minutes per month just in the U.S. So 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? I think those are the union economics of the user side. We talked about the financial ones. And that really is making sure that you're at the top of your game in serving their user needs. And that sounds like, you know, cliche, but that's absolutely the job. And over time, though, that changes always. So you're never done. And 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. There's so many things that we could do. And I think that the name of the game would be the same in every one of those.

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? Well, step one is to lean into the individual brand. So you have to nail that first, given or we're, 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 that we're building behind that. 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 port. 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 and 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 so I got here is that maybe this goes to some of the retro vintage flavor 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 one really small example is we just dipped our toe in the water at Southby. 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.

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

Yahoo's vintage and retro now. I like it. Modern vintage is what I would call it. 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 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 inside the company and then for consumers. So, you know, going back a year, 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 deep. You know, it's deep. deeply embedded into fantasy sports, believe it or not, to help you set your lineup 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 the games on Sundays,

summarizing that week's games, make you fun of people for 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 one of these verticals has it. Obviously, we have search too. And so we have our Microsoft relationship. You know, that goes back a number of years and we'll go a number of years into the future.

But, you know, bringing that into search is obviously happening, is a no-brainer. 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. I definitely want to talk about that search bar, right, in 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. Hey, everyone. Let me tell you about the Hustle Daily Show, a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now they have a daily podcast called The Hustle Daily Show where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So search for The Hustle Daily Show and your favorite podcast app like the one you're using right now.

And we're back here on Big Technology Podcast with Jim Lanzone, CEO of Yahoo. Great to have you back, Jim. Good to be here. Ron John Roy is here with us as well. The Yahoo episode, we're doing it. The Yahoo episode. Make me stuff for my giant Yahoo! Coffee mug. And a Yahoo football helmet in the background that's, uh, that's vibing pretty strongly

as well. Jim got the memo. BYU vibe to it. But, uh, yeah. 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 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 in 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. Because I was like looking at it and saying, what are you talking about? Like Bing hasn't made Google Budge at all. But their idea is basically like big platforms, whether 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 project. So what are you going to do? 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. I think it's a little more simple for us, and it's funny, I definitely did a deep dive after you all had that discussion and I read everything about it. And I mean, I believe they were saying it's based on decisions Apple was going to make in 26. And they're projecting a lot with that. Yes.

A lot of extrapolation. A lot of extrapolation. I spent my first 10 years in search, including Ask Jeeves, where we were part of the turnaround team there. So natural language and all those things are near and dear to me, direct answers, all that. Yeah, look, for our search, 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, there will. with us and think, yeah, I may as well

just search a Yahoo. We reward that. That's actually a really proven way to grow search. I've done that in the past. So, in order to do that, obviously, AI answers are going to be a big part of it. Number one, because I do believe

it's growing the category. I don't think it's a one-for-one replacement for every type of search that's happening. I think that what we used to call smart answers, what Google calls one box, is I 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 people who are attacking Google and Bing or acknowledging.

I think you kind of can do both in the search UI. And, you know, we're going to do this. We obviously need to do the same thing. And this goes way back for me because our team had asked in that 2003 to 2007 period, we really led the way on direct answers and getting beyond 10 blueprints. That's 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. We actually, ours was pulling from structured databases to bring, you know, weather or, you know, lyrics or whatever's going to be right into the page. And that really is a great way to use AI generate answers right now. I mean, you know, including if you type in, how does perplexity AI work into Google? Google with Gemini lit up and into perplexity. It's very interesting. Who gets the answer right?

Who gets it right? Who gets it right? Google, and they pull it from perplexity. Perplexity is pulling it from Reddit and some other places. Oh, my God. That's fascinating. It's so broad, search is so broad. And I definitely think it is incrementally added to the category.

You're now asking things you wouldn't have asked a search engine. and it is creating answers the search engine was not able to do, right, by predicting the next word, et cetera, from its database. And so, look, for Yahoo, we're definitely incorporating it in everything we do, including search. And I think it's as much an opportunity as a threat to the search category. They're both true. Wait, can you walk through?

You said your experience that Ask Jeeves was a turnaround. What was the turnaround experience? And I guess were there any valuable lessons that you're bringing to the Yahoo story now? 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 9-11

as joining as the head of product. And our stock was under a dollar. It had been crashed. And then the company had gone, And, you know, I think had to 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 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 and retention and frequency. And search, that's linear. In 2002, we switched to Google AdWords. I think we're the first

one to do that, which helped us become profitable and set our stock on a, I mean, I think we've 50X, thing from there. And then we sold IAC in February of 2005. And so that lesson of, you know, huge audience with all these things that could be improved is like the core basis for a turnaround is something I took to CBS Interactive where we had that problem across the number of our properties. If you do that, you then make your own fuel to invest. And at ask that, that was definitely into investment even deeper into search. At CBS, it was, we actually launched CBSL Access, which became Paramount Plus years later. The first plan we introduced 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 have been part of the turnaround. So, yeah, I mean, that was part of 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 doing a lot of revenue, it's already very profitable. But getting it to the growth, trajectory that would make you a sustainable company for the future is really the trick here and announce the work we're doing now. But based on a lot of the lessons I had in the past.

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'd be the thing 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. in with all the money and that's the end of the company. What do you think about that? I mean, I think that's, how's that? How's that? How's a different here? Yeah. Because I have friends and 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, and, you know, my own, my only personal experience, 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 we've been on the same page about the thesis the entire time. 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 C, 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,

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 cost have been nationally 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 of, you know, doing more what we should be doing and less of, you know, of the thing, everything that we inherited. So maybe this is a one-off in terms of that experience. But Reed Raymond, who's the chairman, and then David Sambor, Lee Solomon, Efei Wang, or the other three main Apollo people involved, have just been great with us. We involved 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. So I don't have a, I don't have a dramatic. No, that's good answer. Yeah. No, it's, I mean, I don't know if we screw it up, it would be different, but things would be going pretty well so far. 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, still growing at least in the way that you wanted to, what does that, what to success on the turnaround look like then? What's the bigger two to three year vision or whenever an IPO would be. I mean, how does this get pitched to the markets?

Well, look, the only pitch you can make, I always say, you know, as you know, companies are bought and out sold, right? And so the thing that we have to do no matter what the outcome is here and whether that's all of Yahoo is acquired, parts of Yahoo are acquired by different people, we have an IPO, like whatever those are, that the task for mindset 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 again, it's weird because I've founded two companies, but I've spent the majority of my career now in public companies. And clearly what you need is sustainable growth over time, right? Companies can go public too early. They can be in a position where they're struggling to make quarters. Like that's not the right place for anybody.

So I think we're, you know, this is the first time Yago has been private since 1995, and we're taking advantage of that to build this out the right way. We 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, you know, 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. do 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. I think you'll continue to see that. And, and so we're, you know, we're building this transformer here to to be a healthy fighting machine in the future. 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 ideal combination? Is that, is there some

high level goal you have? around that or inside? Again, I think it's just different. If you're, if you are a premium content brand, then you can't, 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 a, 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 in your monetizing that audience in certain ways. Down funnel, you earn the right to convert them into premium products and just, you know, subscriptions could be one.

Sport, you know, maybe, you know, betting is another way you might think about that, but you convert them down, down that pathway. That's really how you run these kinds of properties, or at least the majority. of them, right? Things like search are different. 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. So we are actively thinking about that and every one of these verticals and building behind it. So it's a look, it's not done overnight. This is always going to be something that took a little while to get everything right.

And we're, you know, look, we also, we have the kind of team that are two types of people. There are people who are like, they see this possibility of turning Yahoo around and where this could get to and the brand. And they run towards the fire and they want to be a part of that. And 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 Rorschat test between the two types of people as we're recruiting people in here. But our team is super energized behind all that and working like crazy to do it. 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 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 i love it it's um it's funny i always used to say Because, you know, that whatever, 15, 20 years ago, there was only search.

I mean, it was such the heart of the game, pre-social media, pre-mobile. Remember when I got to CBS Air 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 a blink of a second, or to give you the right resources or to give you related searches

to iterate in your query, like all these things. So I automatically just in my product nerd side just go to that. It depends on the query. And that's going to unleash a different tree structure for what you might present and what you might do that as you follow that thing down, it just continues to evolve.

And again, I, you know, The fact that someone would spend 21 minutes on perplexity versus just trying to get to a navigational query is one example or a quick answer, what time it is, what's the weather, how does perplexity work as another sports scores as being one or the history of something as another or it's just, it is all different. And I just look at generative AI as another tool to deploy. is this clearly whether it's Bing or ChatTDPT standalone or perplexity standalone with 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. How difficult of a product problem is that to be like

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 a product problem is that? And have you made any progress on solving it? It gets easier the more queries you have. And so we actually on the patent of that back in the day, an ask of user behavior algorithms. 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,

and if you know the user, you know, it gets easier as well. So I do think scale really does matter for that. Do you anticipate this is going to be the way that all search engines handle this? Because it sounds like a pretty novel solution. Go ahead. I think the challenge is cost. That's one.

These are very extensive answers to generate. How much more does it cost to generate a generative AI answer versus a normal search answer? you all know the answer it's 20x I don't know what the real answer it's out there somewhere I know it's a lot more so

so yeah I mean I clearly look it's already happening everybody's already decided it and to your point and Brad Gersner's point I've seen to make a lot 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 in that situation and one of the things for me is focus and I can just focus on what I can control here where deploying those things and service of the user is a no-brainer.

Are you definitely going to do this with Microsoft or are you thinking about building something on your own? I think it depends 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. Cool. Yeah. Ron John. 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 as South by Southwest party, 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 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 uh maybe anticipated ways and unanticipated ways to help you do it 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 Teesby for saying we're being humble about it, but it's enough to be this size, top five internet property with, you know, this level user base, with being number one or number two in these categories that we get and 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, 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 favored fantasy platform. And we're definitely the, you know, the Bloomberg for the retail investor, essentially, right? And so, I mean, the number of, and so that hits every age group. 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're up to get to. I think for listeners who were not around during the time, Ask Jeeves, which we've been talking about, I, 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 to introduce it to the next generation. We actually moved on from Jeeves in 2006. Oh, the butler was no more? He was. It became just asked. After I.C. Live, it became, he went away. Although he came back in the UK later. And we threw a party 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. It was pretty funny. 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 Web 1.0 boom. And we were the only ones to make it through that wasn't Google, you know, Microsoft or Yahoo. Rest in peace, Lycos. A lot of things. A lot of like us, Altivista, yeah? Yeah, well, it's funny because we now own that. So brands that are under that were inherited, that were, you know,

Netscape, Alta Vista, ink to me, I mean, you'd be surprised the number of brands that are actually buried somewhere inside this company from that era. All right. Roger, you got anything else? Sorry, I just add to us once more.

The butler, the butler was in carbonite and walked out by Darth Vader and the stormtroopers. Did I have that correct? Because that was, you know, you could always unfreeze him. 2000s. 2000s internet. Most 2000s. 2006.

Yes. I'm sad I missed that. It sounds like a good party. Yeah. 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. Okay. See later. Thank you. all right everybody thank you so much for listening this week on friday ronjohn's going to be in france he's actually there now so uh but reid albergotti is coming on to co-host the friday show so stand by for that semiforte technology editor reid albergotti will be breaking down all the week's news and we will see you next time on big technology podcast