On with Kara Swisher - Can Yahoo Bring Back the "Good Internet"?

Episode Date: April 15, 2024

Yahoo, the one-time "oracle of the internet", has had many iterations in its 30 year history - and private equity is betting that Yahoo CEO and digital media veteran Jim Lanzone can bring back its relevance. Kara has been covering Yahoo since its inception and has known Lanzone - who has had leadership stints at Ask.com, CBS and Tinder - almost as long. They discuss Jim's vision for the new Yahoo, what’s going on with search, how he’s integrating AI, and whether there could be another Yahoo merger or IPO on the horizon. Questions? Comments? Email us at [e-mail] or find us on social media. We’re on Instagram/Threads as @karaswisher Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Hi, everyone, from New York Magazine and the Vox Media Podcast Network. This is On with Kara Swisher, and I'm Kara Swisher. Today, I'm excited to talk to Jim Lanzone, CEO of Yahoo. Do you Yahoo? Yahoo! In case you don't remember this, back in the 1990s and early aughts, Do You Yahoo? was basically, let me Google that for you. I've been covering the company for 30 years,

from when it was founded by Jerry Yang and David Filo in 1994. And despite many iterations, including losing the search war to Google, Yahoo is still around and doing better than you might think. Jim Lanzone joined Yahoo in 2021, shortly after the private equity firm Apollo bought it from Verizon for $5 billion. the private equity firm Apollo, bought it from Verizon for $5 billion. I remember the $45 billion offer from Microsoft in 2008 because I spent an awful lot of time covering it. I've known Jim almost as long as I've been covering Yahoo. Much like Yahoo, he started out in search in the late 1990s and has reinvented himself more than once. As CEO of Ask, he revamped Ask Jeeves. He founded a TV startup, which was bought by CBS and then became CEO of CBS Interactive, where he launched their streaming services. He even hooked up with Tinder for a hot minute. In short, like me,

he's a digital media veteran. I've been watching with great interest what Jim's doing at Yahoo, which includes a lot of new acquisitions to revamp not just the site, but also the ad biz, where Google and Facebook are still dominating. Quick veterans note, Yahoo tried to buy both Google and Facebook when they were small babies. That didn't work, obviously. So I want to get his thoughts on the current media landscape, and we have two expert questions today. his thoughts on the current media landscape, and we have two expert questions today. One from former Yahoo president Sue Decker, founder of the social networking site Rafter, and one from the founder himself, Jerry Yang. That's coming up after the break. Fox Creative. This is advertiser content from Zelle.

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hey jim great to see you kerry great to be here so people don't know we have known each other forever gotta be over 20 years we've both had so many jobs. We've had so many jobs. We've been around too long. Where do we meet? What was it? What is Ass Jeeves? Was it?

Probably Ass Jeeves. Was it? The butler. People don't know there was a butler involved in Ass Jeeves. There was. Who was going to get you stuff. Was it Ass Jeeves? Where did you work before that?

That had to be. I had a startup like in the 90s, you know, that we sold Ask Jeeves. Okay. What was it called? It's called eTour. It was basically, do you remember StumbleUpon that Garrett did? Yes. We did that in the nineties before social. He did it with social. We did it with editors. Yeah. That's always the story, isn't it? Yeah. Yeah. That's always the story. We did it before, you know. Well, we did it before, but not as well. All right, well, let's start about doing something before. I haven't interviewed you since you became CEO of Yahoo, which is remiss on my part. But at the time, that was 2021.

And you said every product had seen better days and needed to be modernized. Well, that's interesting. That's a tough statement. Explain to me why. When I heard it, I was like, I called Quincy Smith, who's a friend of both of ours. I'm like, why did he take that job? And are you a turnaround or a tarnished jewel? Tell me the thinking behind this. Yeah. I mean, I guess there's two things. There's what the Yahoo version and then why did I run towards the fire, you know, on it? It's not even a fire. It's a low

burning ember, but go ahead. It's, I mean, it's complicated because as a business, it was still even then in a really good spot. Like a lot of revenue, a lot of profit, a large user base. But it had been through a lot, right? It had been a standalone public company from 1996 until 2017. And then it spent four years inside of Verizon. So, you know, a very long time. And it's true, it had gone through difficult times as a standalone public company.

By the way, we also own AOL. Right, that's right. Going back for you as well. Right. Tim had this whole grand vision of a giant social network, essentially, I think. I don't even remember what his vision was, but it was nutty.

Well, and then a new management team took over at Verizon. So, it didn't fit the new strategy for Hans. And so, they spun it out. And Apollo was looking to buy it and called me with a lot of people and asked our opinion. And I thought, how many times do you get a chance to get a... If you took the brand name Yahoo off of it, which is what it was spun out as. Before that, it was Verizon Media. Before that, it was Oath. And before that... Yeah, Oath. Remember Oath.

So they spun it back out as Yahoo. If you took the brand name off of it to get that many users, that much traffic, that good of a business for only $5 billion, which is what it was bought for, to me, that was an incredible opportunity. And I've done turnarounds before. I kind of like doing them and feel like we had a good blueprint for how to do it. So I jumped at it. It's not unlike AOL, right? AOL is still big.

It actually still has dial-up customers, right? Is that correct? And it has a big brand across the world, as does Yahoo. But it continued to have a resonance, right? If you can't do something with this well-known internet brand. And at the same time, a lot of internet brands have died along the way. You know, there's graveyards of them, such as MySpace. And I mean, I don't even remember what I don't remember, including some of your companies that you've run. Was that nerve-wracking to you? And what was the greatest challenge you thought you were facing and the company was facing? I felt like it was pretty similar to things I'd seen before. The challenge for these businesses is always growth, especially if a company is 29 years old. So that was always going to be the goal.

And so to me, that always goes back to great products for an internet company. You know, there's two ways of doing that. There's chasing growth for the sake of it and having clickbait and going for engagement. Which Yahoo tried at one point, by the way. Instead of actually being useful and understand the job that you're there to do. And to do that, you know, a lot of guts work had to happen. I had to restructure the company.

Literally, the entire way it was run to put people in charge of every one of the standalone businesses, many of which are still extremely healthy, right? We're number one in finance, number two in sports, number one in news from total traffic, number two in personal email, and we're still number three in search.

I mean, these are still big businesses that needed people who are experts to run them. Right. And then restructuring the company around letting them run after that and their vertical and letting that happen. them. And then restructuring the company around letting them run after that and their vertical and letting that happen. So really that whole restructuring. And then there was the, there's transformational work you had to do. And that's from pure gut stuff, like moving to the cloud that had never, that had never happened or spinning off things that we

had no business operating. Like we owned a content delivery network. We owned a supply side platform, a native advertising business. We just had a lot of things that weren't in the wheelhouse for Yahoo. So we sold a lot of things off. We partnered with some so we could focus just on the businesses that make sense for us. For Yahoo, for what, sort of getting back to original Yahoo in a weird way. But over the years, it has been a bit of a turducken, right? It's like, what is it? What's happening here? Let me, because like you mentioned search really briefly. Yahoo wasn't initially in search. It was a directory. They were not in search and missed that turn rather significantly, as I recall. But how did you decide what was useful? I mean, obviously,

Yahoo Finance has been a massive player. Well, I'd say two things. If you go back to the founding of Yahoo, we took a lot of inspiration from that one. We had our off-sites and we tried to figure out what the strategy should be going forward. If you go back to the original Yahoo, like 1995 Yahoo, it said, Yahoo, a guide to the World Wide Web. And that's really what it was for those first several years, including Search, where they didn't operate their own search engine. I actually have a lot of empathy for why they gave Search to Google, which happened in June of 2000. And that kind of set off a chain reaction. It did.

For the company of really trying to figure out what it was after that. They never operated Search themselves. And so at that point in time, as you remember, there was a market crash. There was no business model in search yet. They partnered with the best search engine. And I'm pretty sure to save money. They bought one, too. Well, that was after.

They bought Ink to Me and AltaVista after that and Overture. But at that time, they outsourced it to Google with a link to Google and their logo on the Yahoo search page. And that was kind of it. Google was off to the races. But everything else that they did, all the way through to today, they're still extremely successful at and being the guide to that category.

So that's the job to be done. And back in 1997, that was helping you find a website. Whereas today, what I'd argue is, especially with AI coming in, it's how are we helping you achieve the thing you're trying to achieve? And that could be making more money in Yahoo Finance or saving money. It could be finding out the weather. It could be managing your fantasy sports team. Whatever that

job is, is what we have to do with the products now. Right. And for people who don't know, Yahoo stands for yet another hierarchical, officious oracle. Right. It was a joke by, Ophiuchus Oracle. Oracle, right. It was a joke by, I think, David Filo, I believe. And it was very ahead in branding with the purple and everything and the exclamation point and things like that. But it was definitely a company that showed you how to find the web. And I did actually have a section in my recent book

about how they gave away search to Google, which was, of course, the real important business, as it turned out. But let me get to that point. Every week, we get a question from an outside expert. Now, today we have two. You're going to be surprised. The first one, we called one of your predecessors, current CEO of Rafter and former Yahoo president, Sue Decker. Have a listen. Jim, so happy to get the opportunity to say that all of us Yahoo alum are cheering you on in your quest to restore greatness to Yahoo. With that said, having personally spent nine years in various leadership positions at Yahoo, the challenge none of us were able to solve is that our beloved Yahoo was jack of all trades, but master of none.

We tried to attract a very broad audience chasing every rabbit, only to be outrun by specialized players in search, in shopping, in personals, in travel, in games, the list goes on. So my question is around solving Yahoo's identity crisis. What is Yahoo's core identity today? And where are you trying to move it? And what's the big move that can leapfrog it to delivering that promise uniquely to users? All right, good question from someone who knows. So what is Yahoo now and what do you want it to be? Well, I actually think the way Sue just described it also incorporates where they went off track. But again, I have a lot of, I think I understand how it happened, which is in losing search and being probably the most valuable company on the internet at that point. probably the most valuable company on the internet at that point, they were trying to preserve search that whole time and have it go down as slowly as possible,

or at that point, still trying to beat Google. They had a great team to do it, but they also kind of veered over towards media as a way to try to solve it. And entertainment and a lot of Hollywood people came in. And if you list through the categories that Sue just listed, again, I go back to the original Yahoo. The reason it was founded as I go back to the original Yahoo.

The reason it was founded as the guide, trusted guide to the internet. Right. Which is what it called itself. Right. And trying to be, you know, have, hey, well, I did this too, you know, get into video for the sake of it, get into some of these categories where you're not really trying to be the trusted guide. If you'd leaned into that and taken search out of it and just tried to do a great job at travel and helping people get from A to B, maybe do it in both surprising and unsurprising ways. But if they'd gone back to the beginning and thought about those categories,

to me, that's where we have a right to play. And the luxury that we have, we're not a trillion dollar company trying to do everything on the internet the way those companies are. We can focus on the categories that we are that trusted guide, still number one in finance, or number one and two in these categories. You could then think of other categories that we would have a right to play in, travel, to me being one of them. And that's the focus of the company.

And from top down, we talk about that all the time. So the whole company does understand that identity now as the trusted guide. So trusted guide is core identity. That's what you're saying. 100%. And we also took inspiration from that original version because to the right of that, where it first said Jerry and David's Guide to the World Wide Web, then it said Yahoo Guide, it said always under construction. And to me, these first 29 years, you know, you went from finding websites, you know, all the way along. If we thought out another 30 years, there's so much that's evolving in every one of these categories that our roadmaps can be filled with things that we have to do to do a good job at that, right? To being the number one news

aggregator, to being, you know, to being the tool that helps you make or save money in finance. Just in email alone and task completion, the things that you're trying to do there. And we have new versions of every one of these products coming out in the next four to six months that are all inspired by that mission. Yeah, but let's talk about search. Here's something from you and I from 2009 when we were much younger, Jim. Where do you think search is right now in terms of where things are going? Search 3.0.

Yeah, tell me. Well, I mean, search in some ways is a lot more mature than a lot of people realize. It's 15 years old. It's still the number one activity on the web outside of, you know, communications tools. And yet it still kind of looks the same as it did 15 years ago. It does. It's lack of innovation. Is that the problem? Well, in the past year, led by, I think, Ask, I think it's started to move away from just

that 10 blue links, and that's really the biggest trend right now. We called it Ask 3D. People call it universal search, which is what Google has termed it. And what it basically means is bringing content in that's most appropriate for the query all into one results page so that the user doesn't have to go, you know, fishing for it themselves. You'll see video, you'll see, you know,

content on the actual page, a map with the results on it, as opposed to just links. This is really interesting because this is just after you, I know you're prescient. We were babies. We were babies, but you're prescient. We were babies. We were babies, but we're the same.

We're not exactly the same. But this was just after you left, wasn't that weird to listen to? Yes, thank you. After you left ASK during the Microsoft Yahoo tussle, as I called it. Microsoft tried to buy Yahoo to try to get ahead. And one of the things you were signaling was what Google did, actually, of all pieces. And you said mobile search would grow in that interview, by the way, which was right on. And I thought we would laugh

at the 10 blue links in 50 years. So the same question, where do you think search is right now? And where's it going? And how does it play into Yahoo? Because Yahoo likes to tout its third in search, which is factually accurate. But in January, Google had 82% of market share. Bing had 10%, a little bit over 10. And Yahoo had 2.6. So how important is search to Yahoo's bottom line? And where is it? Make another prediction, Jim.

Probably going to be the hardest category for us to, you know, we don't own that category the way we do others, right? No, to say the least. And the way that we today in 2024 forward get most of our traffic in that category is from people who are already with us. And every month we touch 86% of all internet users in the U.S. where, you know, they're coming to one of our properties. And I think our first job, and this was how we grew it at Ask, where we actually did grow market share, was by not complaining about who we weren't, but actually just doing a great job with the queries that we did have.

And then if you did that, you would see it in the math. You would just see, you would grow retention and frequency of searchers. And that's our job. So I always loved innovating in search. And some of my proudest moments actually were Walt's reviews. Walt Mossberg, yeah. I remember thinking, oh, wow, we have it made now because he loved it. I also remember him throwing me out of his office the first time because it wasn't good enough yet. Well, one of the things was that Ask was very innovative, but it's like the planes are covered

with the bodies of pioneers. I think I remember it being quite innovative. For sure. Especially in the Beyond 10 Blue Lanes. Yeah, right, right. So what's the plan in Search? It's going to take some creativity, but you have to do it by meeting the needs of the user. And in our case, I heard someone say the other day,

their margin is our opportunity. Because we're so small, there is a little bit less at risk, and especially in the 10 blue links. And we can do more, especially with AI, in munging together all the different databases and all the different sources of information in the page. That is always what I love doing and what we did in that era.

And I think with large language models and us being able to use, you know, to kind of pick and choose what we would bring in, that definitely to me is where search is headed. So explain how that would look. Because I am even questioning whether search is going to be relevant in a couple of years. Like, because, you know, you see Yahoo doing search, excuse me, Amazon doing search. Search is everywhere now. And with AI, it takes the internet and vomits it up in a totally different way. And I use the term vomit loosely, but you know what I'm saying. It reaches into the blue links and delivers you a product, actually. So is that an opportunity to grow, or is this the ceiling? No, I think that it grows the category. And you know from your own search behavior which searches you can just totally trust ChatGPT or Gemini or anybody to answer. And then there's ones where they don't know the answer, especially because they're based on information from a year and a half ago, where they say, hold on, I'm going to a search engine to find that, right?

And even, you know, Perplexity or others will deliver back to you citations, and we'll see over time whether that's enough for content providers to go off of, of where they're getting the information with links off. And that's already the ad model that they're bringing forward. So I think it's all of it together.

I think you probably, from your own experience, know that there are queries you're now doing that you never would have done on a search engine before. There's ones where now you'll trust a large language model, but not for the specificity. So if you want to know the general market share of Slack versus Microsoft Teams, you'll generally ask it.

You don't care to know the specifics. But if you had to know the actual number, you're probably not going to trust it. You're going to want to go to the source. I think it's all of it. Why not just sell Yahoo Search finally to like Bing, which has, you know, has the big investment in chat GPT and sort of get on their gang?

Because, you know, obviously, well, explain that, and then I have a follow-up for that. I mean, we just got here. You know, I think there's a lot we want to do before we think about selling anything. Let's cut to the chase. Yeah, I mean, I think we want to create some value. But I'd also say on this AI side,

there is another step here to search that kind of goes back to what we do in these verticals, which is you will have these autonomous agents going and performing tasks for you to get done what you're trying to achieve that day. And it could take two steps or 10 steps on your behalf. And that certainly is where this is all collapsing on itself. And a lot of where we're focused back in our verticals, where we are at the top of the market. And so in a way, you know, it is all becoming one thing, and that is where we are focused. Right.

Well, there have been complaints. Speaking of opportunity and their margins, there's been complaints about Google Search getting worse. On Reddit, even a limited study out of Germany, Charlie Wurzel of Atlantic said it's buckling under its own weight. I would agree. What do you think about that? Is that the opportunity for Yahoo?

Is that remaking it? Because search is just, it's kind of a, it's like library books on the floor. It feels like that. Like you have to sort of search in the search. I think search has actually gotten a lot better. It's kind of like UIs. If you go back 10 years ago to what you thought was good

and you look at it now, I think if you go back 10 years and search and compare it to what the average search results page is now, it's incredibly better. AI will make it even better. And so, no, I don't think it's dying. I think it's actually about to have a huge rebirth. And with all of these, creatively, creatively. What about Google being the dominator here? Is that an opportunity? Because they're obviously under pressure from the Justice Department. There's not a lot of moves they can make to get bigger. And I mean, 82% is pretty big. Is there an opportunity there for you from a competitive point of view? If they're under that pressure, they can't do a lot.

They've already gone quite far enough with putting their own products out front. Give me one example of what that would look like from your perspective with one of your products. First thing, we don't do search. Starting in the late 2000s, Yahoo outsourced that to Bing. And that's a deal that we inherited that we still have. So index search, Yahoo doesn't do. We also are too small to operate a large language model and be buying chips and doing all that. So that's not our place in the world. And now what we need to do to

make the company long-term successful, we just have to focus. The easiest way to grow is by starting with a large base that you already have and doing a better job than you did yesterday with the products that you already have. I really believe that it's been a long time since Yahoo had its best foot forward from a product perspective on everything that we're doing. I mean, think in Yahoo Mail, the things that we're working on behind the scenes right now are just incredibly better than the product that we have out there now. That's the first punch for us that we need to throw is doing a much better job with the products that we already

are relied upon. And then we'll see what happens from there. But the thing that gets me excited is that innovation today in our category. So you've been testing, as you said, AI functionalities in email and sports fans have been raving about the fantasy football trash talking chat GPT. Tell me about these and how you're thinking about AI integration as part of your content. Is it content strategy or product strategy? I guess it's both. Definitely product strategy. I mean, most of what we do, I would argue, are products, not content. We also do content. And we have some great content. But that's really to add context to the aggregation that we do or the core products that we do. So when this all exploded in November of 22, and I don't think a lot of people, you know, the month before everybody was still talking about the blockchain and Web3 and everything.

I mean, for us, it set off, you know, the opportunity to take these things and just make the core products better. Because again, we're not competing with ChatGPT or Claude or, you know, we don't do that. So the first thing we did was launch AI in email to help you write the email, edit the email, make it longer, shorter, funnier. Same thing in sports. So it does help you. It doesn't just trash talk. It helps you set your lineup or do analysis, you know, for what you should do. In finance, it can help you with stock pick analysis or understand the market or doing research. If you go down the list of every category that we have, and then that obviously led to our artifact announcement that we did to try to leapfrog ahead in just core news. Yahoo, as you noticed, has been both an aggregator of information and a content creator. And for people who don't know, Yahoo actually had a news service down in one of its basements

where they had people actually creating and delivering news. And they had to wear Banana Republic clothes, which I knew was a problem from the beginning. But they had a real news... I don't even remember, Jim. I don't care. But I remember being there and being like, Banana Republic clothes is the focus here? Okay, fine. I think it might have been under Terry Sem Jim. I don't care. But I remember being there and being like, Banana Republic Clothes is the focus here? Okay, fine. I think it might have been under Terry Semble.

I'm not sure. But you have Yahoo News. You have tech sites like Engadget and TechCrunch, which makes you a content creator. I don't want to talk about Artifact in a second, but do you see yourself as a media site? And what's your media strategy? I want you to talk about the content creation part because Yahoo has a long history of that. They absolutely do. but proprietary data sets. So that core information, the data sets, not the content. Number two would be being a great aggregator.

And again, in news, it's thousands of sources. Same thing in sports finance. And then third would be content anchors. So in sports, we hired Kendall Baker from Axios. He does an amazing job at providing context on sports every day. So that is us having our own journalism in the space. And we definitely do that in finance. And then,

TechCrunch and Gadget are smaller, but hired Connie to be the editor-in-chief of TechCrunch. So we do it in tech. So we definitely do first-party content. We do our own journalism, but it's smaller compared to the majority of what we do, I would say, is being an aggregator. Aggregation. But you just purchased AI News Platform Artifacts, and that's founded by Kevin Systrom and Mike, who were the Instagram founders. How are you planning to use that? Yeah, so Artifact was the next product created by the founders of Instagram. It was a news aggregation and personalization app that did have some social components to it. But I think what struck a chord in Silicon Valley

when it launched, and I was included in this, is it was amazing at delivering back to me an amazing news feed aggregated from a huge number of sources. On the backend, to me, they had the best algorithms figuring out what I personally wanted and then tuning that over time in an amazing way with great summarization features and AI tools

that came into it to make it even more easier to sift through the news and understand what was happening. So if you compare that with Yahoo News over time and our products had, it really seemed to me to be a step ahead. And then so when I saw the news that they were shutting it down, and they did that because, you know, they just realized at this point getting to a hugely scaled product was going to just take a long time and they have a lot that they want to do.

And they're tired of using their own money, their Instagram money. And so I called, and I wasn't the only one to say, you know, what are you going to do with it? I'd love to acquire it if that was possible. And, you know, it took a little while, but that's exactly what we did. What did you pay for it? What did you pay for it? We didn't say. Can you say now?

No. It was the traditional undisclosed sum. Was it small, large, big as a turkey? It's small in the big picture, especially compared to other deals. But it really is buying the product and the technology because the team isn't coming with it other than Kevin and Mike as advisors to help us integrate it and understand it and tune it to our sources. So are you going to use the vertical? Are you going to revamp your news vertical with AI-generated articles? Do you think that's something media companies should be doing or thinking about?

Not AI-generated articles, but AI-guided ranking and then understanding. And a lot of the feature set that was in there. So I think whether it's our website or the Yahoo News app, a lot of what Artifact was is going to come forward in the front-end product for our users as soon as it launches. So that will be not that far in the near future. Artifact will live on as a big part of Yahoo News. Right. So we just did a panel on disinformation this week.

You also bought the Factual in 2022. The company uses algorithms to rate credibility and bias of news articles. The plan was to integrate those ratings into Yahoo News. Why do you want to do that? And where does that stand? Yeah, I think for us, we have a real adverse reaction to things like clickbait

and outrage generators and attention vampires, you know, these things that online content has become. Ooh, attention vampires. And especially for core news, especially with the election coming up, you know, we just think, and again, these are products that we are building and are going to launch in a few months. But yeah, the factual was the first step in that. It gives you an accuracy score, it gives you political bias score,

and especially in that one category because people aren't having this issue as much with food, journalism, sports, travel, health. It really is politics and current events. But that was also a very small acquisition, but some people who had some, you know, some really innovative ways to help us identify content. And then we'll see what the actual features say. It's a differentiator. It is certainly a differentiator because, I mean, instead of just dealing with it, Facebook has

just decided not to do it. Like, we're just not getting into that business. We're running screaming from the room. And it's actually a controversy brewing right now about that. Obviously, there are a lot of calls for more content moderation, including lawmakers. We're seeing, as I said, less of it's in social media companies who, you know, touch the flame too often and did it badly, just stuck their hands right in there and then did a bad job of it. You have Yahoo Community Guidelines. How much content moderation are you doing, especially ahead of the election? How do you look at content moderation? A ton. And back to the very beginning when I said we hired experts to come in and run these groups.

So we hired Kat Downs Mulder. She was the head of product for The Washington Post. So she is now the head of Yahoo News and homepage. the head of Yahoo News and homepage. And so, yeah, between that group doing both automated moderation and then physical as well, if it gets flagged, all the way through to categorizing sources and making sure that we're hitting the most authoritative sources. So I like to come at this top down.

We used to do that in search too. For certain categories that are more in the head than the tail, you can have a gold list and understand what the most authoritative sources are to make sure that you steer around from just the people who are trying to get traffic. Let me be more, it's not just trying to get traffic, it's people who don't care. I have a recollection. I'm in the house. I have been in San Francisco for many, many years, and I have this recollection of a discussion I had with Larry Page here in my kitchen. He was talking about doing Google News at the time. And I said, you seem to rank things just equally no matter what they are. And that's ridiculous. And he's like, what's the difference between the New York Times and some hunk, you

know, some hunk of junk news aggregator? And I was like, I looked at him, I said, what is wrong with you? Like, are you kidding me? But he, that was his attitude. And I was like, I looked at him, I said, what is wrong with you? Like, are you kidding me? But that was his attitude. And he's like, that's not very nice. And I said, what you're doing is going to turn out to be not very nice, you know, in the time period. I think we can do both. And it's hard, right?

Because people, you want to make these products better. And I know you can relate to this, but a lot of times you put a better product out there and people react negatively to it because they're used to what you were doing. Right. But we have found that the algorithm has been hard to, it's been hard to untangle in a lot of the ways where if I use it, it will just overdo it with certain topics and react too quickly. And that's part of what we're trying to get right. And then a lot of the site, especially the homepage, it's funny, you go back to the 2005-06 homepage. There's a lot to be inspired there, too. Yeah, the personalized one.

It was much more tool-based and much less content-based. And over the years, and so, you know, the modern version of that is something that we're really thinking about and working on in the background. We actually have AB live and testing right now. It's in the wild. I've gotten some feedback from friends who have fallen into the new one, and they're like, this is a thousand times better. But we really have to get that right before we launch it. I have long thought there's a differentiator in giving people good information. I just, you know, but it's not as lucrative.

It's certainly not as lucrative in that regard. And last question about media. You were in digital media for eight years as chief digital officer and chief executive officer of CBS Interactive, a news organization. You launched their streaming service, which is now Paramount. And it's, of course, we'll see what happens to it. Any plans to grow Yahoo in that direction? One of your predecessors, former CEO Marissa Mayer, said she regretted buying Tumblr instead of Netflix or Hulu during her tenure. She certainly had the chance.

Do you think about it that way? I think Hulu would have been tough for anybody to acquire who wasn't one of the original partners, because I don't... Same reason it would have been hard for them to go public, I think, with that structure. You know, it's funny, in the history of streaming, and we were one of the first ones out of the gate in 2014,

it's funny, if you look at it, almost every one of those players got there in a very unique way. They had a unique advantage. Ours was the number one network, and we were streaming some of the shows for free. And so it was built as a freemium layer on the free one to say, if 10% of people paid us a subscription, I do think that leaning more into video

is something we do need to do over time, but we have to do it in a way that's delivering on what people need from us. I can't just throw a shingle out there as the 15th streaming service and just hope. Right, right. Well, remember what Tim Armstrong was trying to do at Yarmouth Oath was create that kind of thing,

was bring a media video strategy there. So it's not that's not been tried. Yeah, they're creating a lot of original content. We do that at Yahoo Finance. You know, it's a really good product in the CNBC and Bloomberg space. But I think if we were to go down that pathway, I think you'd have to look at it much more

from an aggregator standpoint and understand what people were coming to Yahoo for and deliver it back that way. So I do, I'll never, same thing with search. I'll never stop thinking about that category and what we can do, but it has to be right. We'll be back in a minute. Do you feel like your leads never lead anywhere? And you're making content that no one sees and it takes forever to build a campaign? Well, that's why we built HubSpot.

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So I want to talk about a couple more things in the ad space. You've couple more things in the ad space. You've been using AI in the ad space, as has Google and Meta. Talk a little bit about AI in the ad space. It's critically important. I think people are paying attention to it. Yeah. So for people who don't know, one of the other things that we inherited,

both AOL and Yahoo had bought upwards of 30 different ad tech companies. And so we have aggregated those down to one product. It's our DSP, our demand side platform. This is really wonky now. And so we're one of the largest in that space competing against Google and the trade desk and others. You know, our real differentiators is our algorithm. And again, from our own huge audience, understanding user behavior and being able to target really well, you know, without cookies, like which are going away in the back half of this year.

You know, we're in a great spot to be able to actually have ads be effective without one-to-one tracking, you know, an individual person, which is what's changing in the space, probably in a good way. And so AI is the next generation, this goes back to Artifact,

of having great algorithms that not just delivering the right content, but delivering the right ads. And, you know, again, there's so many players in that space. You see these charts, there's hundreds and hundreds of players. But what makes us stand out

is we're really good at delivering performance and actually delivering relevant ads and people who actually do purchase. Which has been a bane of the existence of advertisers. Yeah, you let buyers test the difference in their campaigns with ads without cookies too, correct? Yeah, we're letting them test. It's over 90% of what it was before already, which is amazing. But, you know, again, I think we're a trusted source for that too. And hopefully we'll be around another 30 years.

And I think getting our feet under us as a major player in the ad space has been another important part of what we're doing. So if you're doing AI, does it matter being in the Bay Area right now? It's seeing a big boom in AI. You know, Yahoo recently opened a new office in San Francisco. You had that Sunnyvale office forever. Are you still there? You don't want to go to Austin or Miami? Well, no, don't go to Miami.

But what do you think about this tech revival in the Bay Area, which is significant, I think, from what I can tell? It's great to see. I grew up there before it was Silicon Valley. So that part's always been weird to me. But yeah, we opened a new office last year in Mountain View. We took over some space from Facebook. And we just opened a brand new office

last week in San Francisco. So we are leaning into the Bay Area for sure. We also have big offices in, we still have Virginia. So we moved it to Reston, Virginia. The Dulles campus for AOL closed down. Yeah. And we still have a big office in New York, Dublin, Bangalore. So we're kind of LA. So we're kind of all over the place. You still have that LA office. We do.

And you were in the old AOL office. I went with them to pick that office, just so you know, when they were looking at it. The one in New York? The one in Dulles. The one in Dulles. With Jean Case. I went with her. And I'm like, I don't know. This seems big. Well, my office is still Tim's old office in New York? The one in Dulles. The one in Dulles with Jean Case. I went with her and I'm like, I don't know.

This seems big. Well, my office is still Tim's old office in New York, too. But the majority of our employees are in the Bay Area. And it's going to be that way. And you think that's important in the AI world now? Because this is where it's happening. It truly is. Oh, yeah, for sure.

There's also great talent internationally in AI, too. So a lot of the people I talk to are in London or Paris. There's other places. And in the ad market itself, it's been volatile, obviously, and Google and Meta dominate. Of course, Google is slated to generate over $190 billion in digital ad sales this year. Meta is nearing $150 billion. Even Elon Musk is finally buying digital ads he needs to. Is that an area where you do have space given the domination? The stock of meta has gone up rather significantly. Google's lagging a little bit. Where do you play in that

with those dominating characters? I look at that as we're much smaller than them, but we're much bigger than everybody else. So, I think we are pretty humble about both the challenge and what we're trying to achieve here. We're not going to be dethroning Google or Facebook. That's not what our aspirations should be. I think it should be, we have hundreds of millions of users coming every month. We have to do a way better job at delivering for them. If we do that, whether it's ads, subscriptions,

e-commerce or lead gen or search, there are always going to be great ways to monetize that, but it has to start with users and user growth and products. And, you know, it's a classic way to look at it, but it's the only way I know how to fix a company or get things going. And I promise you internally, that's all of our dialogue internally is how do we just do a way better job. So when we spoke to Reddit CEO Steve Huffman recently, he said, now you have all these content verticals, email, sports, news, finance. He said his pitch to advertisers is that Reddit can easily target specific user groups in the subreddits. Does that resonate with you, this changing idea of contextual versus behavioral, which has been a long-running debate? Yeah, for sure. But the one thing is, and Reddit is at scale for this too, but we also

have a huge network of people who go across our different properties that we own today. I really think that we could be adding new ones going forward. We have to be pragmatic about that. But we have hundreds of millions of people a month who use a bunch of our different properties. So we can see that, but also contextual within finance. Yeah. So we actually have dedicated, not only do we have dedicated user teams for those verticals, but we also have dedicated sales teams on the ad side. Right, right.

Because you're right, people want to deep dive in the finance category. We can deliver that. You know, speaking of buying things, that would be a company you should buy. As a stock goes down, I don't know. I just feel like, I don't know. That would have to be a merger at this point. Yeah, well, I don't know. I just feel like, I don't know. That would have to be a merger at this point, but yeah. Well, I don't know.

It would be interesting. You'd certainly have much more heft in that you're sort of adjacent. Well, they're also way more on the community side. We have it. We have community

within our properties, but that's what they primarily do, whereas I think we're more of a tool side, you know, in most of our categories. They're adjacent.

They're certainly adjacent. So, we have two more questions. A second question from an outside expert because you're so special. Just for you. Let's play it. I'm a long-time Yahoo user and probably the first employee. It's Jerry Yang here.

But my question for Jim would be everybody that comes up to me these days saying they have a Yahoo mail account are older than me. What are you doing for getting the younger people and getting Yahoo hip again? Okay, Jerry Yang is obviously a super user, but his question, engaged users are important for ad sales. How are you bringing in people who don't know the old Do You Yahoo? And then even older, you have AOL.

I always say in tech, the young eats its old. How do you Yahoo, and then even older, you have AOL. You know, I always say in tech, the young eats its old. How do you do that? And what role do your new social acquisitions like Wagger and Common Stock play? First of all, Jerry has been amazing since I started doing this. He's also a small investor in our new version of Yahoo. So he's definitely a believer. I think there's two things in what he just said there. One is a product thing. One is a brand thing. So it's very interesting that a lot of our products are very balanced between Gen Z, millennial, Gen X, boomer. AOL is not one of them. That's definitely an older audience. Yeah. And we've actually been trying to lean into what that looks like because that's a huge part of life

and there's, I think, a lot more we can do there on that side. The majority of our products are very balanced between generations because people, even younger people, like Yahoo Sports is a big brand in sports and Yahoo Finance is like one of the main, especially free places to go versus a Bloomberg terminal or other option. So we do have that.

Cherry, it's cooler than you think. No, I'm kidding. It's not. By the way, Cherry, Cherry, if you're listening, Yahoo was never cool. Google was cool. But go ahead, move along. That's probably true. It is true, though, that Gen Z loves vintage. Yeah, yeah. Oh, you're vintage. We could be a cool retro brand in that way. Vintage. But actually, from a product perspective, we've brought in a whole different group of people

to go after these things. So believe it or not, the people running Mail now have come from Tinder. Where you worked. And from Paramount Plus and CBS Interactive. So who have never done the category. And the things we have going now there, I cannot wait for them to launch.

Yeah. They definitely advance Mail down from where it's been. And I think they are going to make people take a different look at the category. All right. You're not going to be hip, but you could be useful. Yeah. But I'll tell you, one of the interesting things is that the people who already use Yahoo, like let's say Yahoo Sports, are 30% more likely to think Yahoo is a cool brand. Okay. Same thing for finance, same thing for mail.

So we have to start there. Yeah, I'm going to sell all my vintage Yahoo t-shirts. I have so many of them. So you mentioned subscriptions. Facebook is going to offer an ad-free subscription in Europe, for example. They might have to because of the rules there. We talked to Steve Huffman about this at Reddit. Do you see a subscription service working at Yahoo?

I don't recall if they ever tried it. I mean, they've done so many things. Yeah. Do you see a subscription service working at Yahoo? I don't recall if they ever tried it. I mean, they've done so many things. But do you see it? I always think about subscriptions as something you have to earn. You have to have a huge free audience first, and then it's a layer for your super fans. And you have to get something for it. So we definitely have subscription products coming in finance. We already have it in sports. So there are categories where we have it. News hasn't been one of them. Mail has it. And so, yeah, so I think subscriptions are an important part of the balanced breakfast for a company like ours, but not the only way. My idea is the web fucking sucks. Why don't you give them a nice place like AOL? That was what AOL was in the first place, a safe place to do

your business. And not only that, I also think about the original internet, right? Why it was founded and the aspirations that the founders of the internet had and compared to what it became over time. And I do think Yahoo can represent a lot of what the original intent was. Personalization, usefulness. I would love that. Yeah, the good internet. Like, let's lean into the good, you know.

The good internet. Yeah, let's go back to that. So speaking of which, one of the ways you have to do that is make money and also generate money for your investors. Apollo bought Yahoo from Verizon for $5 billion in 2021. Yahoo founder Jerry Young famously turned down that $45 billion offer from Microsoft in 2008. And I remember covering it every single turn of that. If that offer came today, would Apollo let you take it? Yes. And you've also then, yes, yes, yes, $45 billion, yes. 100%, yes. You're not getting $45 billion, I'm just here to tell

you. Not yet. But you've talked about taking the company public again. At what point, what scenario is more likely in the five years, Yahoo going public or being acquired by Microsoft Meta or Amazon? These guys are sitting on a lot of cash at the moment. I think it's too early to say it. I do think that, I think you'd agree with this, I'm not dodging it, that I think we have to do the exact same thing either way, right? We have to get user growth at a certain rate. We have to get revenue and profit growth at a certain rate. The one thing I will say is we're very profitable. That isn't true for every major internet company, including public ones. We do hire top line in a lot of big public companies already. And we have a way bigger audience. So I think that it's pretty nice to be private after all this time. I think it was really

challenging for both Yahoo and AOL to have to make changes in the public eye for 17 years and then got some air cover within Verizon. But they had goals too within that company that didn't exactly align with what we need to be doing now. So I'm going to take this time while we're private to build. And I think what we build will be valuable to other companies. But if we get to that point, I definitely think we'll have other options too. An IPO. So one of the things, last question, you've started a lot of companies, you've sold companies, you've had successful companies, you've helped companies around. You're also part of a long panoply of Yahoo CEOs. There's

a huge Yahoo CEO graveyard, by the way, you know, of people who've been there. What have you liked most about this? And what would you want to do if you weren't doing this? I'll start backwards. This is the thing I want to be doing. You know, I look around the room sometimes at conferences and I don't want a different job. Like, I don't mind the turnaround scenario and I love rebuilding. So, the best part of this is the team. And then when you can see it in action and you're surprising yourself, like again, what we can see on our side right now are all the amazing new products that we're building

that aren't in market yet. And that to me, whether I'm starting a company from scratch and I only have 20 people or 40 people or I have thousands of people now, that's the best part. I would like the company to get to the point when people leave who have

been here a long time, I swear to God, the opening paragraph is almost always the same. I've been here for X number of CEOs. I don't know how they're marking time. So have I, Jim. I've been there for X number of CEOs. Like Shawshank Redemption. Yeah, I know them all. I don't want to make it about the trials and tribulations of having done. I want to make it about kicking ass and all the great things that we're going to do. And, you know, we're in the, this is always going to take

a little while and we're in the early days of that still, but I think it's going to happen. I can already see it happening. And the bar is lower for us, but that's, you know, I could see it happening. Yeah, no, low expectations is sometimes a good thing. I remember one of the CEOs was Carol Bartz and she was, you know, yelling at me for whatever I had scooped or whatever. And I said, you know, I will outlast you. It doesn't, you'll be gone. Like, I'll be here. You'll be gone. And I, in fact, told her she was being fired at the time she was fired, but she didn't believe me and she cursed me out. And then she was fired that afternoon. Good book material. Yeah. Well, I'm hoping you don't have that fate. I hope you don't have that. It worked out well in the book.

Anyway, I really appreciate it, Jim. I really enjoyed this conversation. It's not memory lane. There are a lot of possibilities here. I know it sounds crazy. I hope so. But there's a moment in the internet where everyone's damn sick of everything. I've noticed this a lot.

And there was a lot to like about the early internet that is still you can bring back in a lot of ways. And it's not retro. It's actually smart. Anyway, I really appreciate it. Awesome. All right. Thanks for having me. On with Kara Swisher is produced by Naini Maraza, Christian Castro-Russell, Kateri Yochum, and Megan Burney.

Special thanks to Mary Mathis, Kate Gallagher, and Andrea Lopez-Cruzado. Our engineers are Fernando Arruda and Rick Kwan. And our theme music is by Trackademics. If you're already following the show, you get a vintage Yahoo sweatshirt. I have a ton of them. If not, take a tour of the Yahoo CEO graveyard, and I have killed at least two of them there.

Go wherever you listen to podcasts, search for On with Kara Swisher, and hit follow. Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network and us. You can subscribe to the magazine at nymag.com slash pod. And we'll be back on Thursday with more. Thank you. That's L-A-V-I-Y-O dot com slash B-F-C-M. your company, and your workers is vital. In comes Huntress. Huntress is where fully managed cybersecurity meets human expertise. They offer a revolutionary approach to managed security that isn't all about tech. It's about real people providing real defense. When threats arise or issues occur, their team of seasoned cyber experts is ready 24 hours a day, 365 days a year for support.

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