The Yahoo Episode — With Jim Lanzone

0:00The Yahoo episode is here, long awaited, anticipated, asked for and now delivered. Yes, the CEO of Yahoo is here with us to deep dive into the state of the company. Yahoo episode on Big Technology Podcast is coming up right after this. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. We're here. We're in it. It's the Yahoo episode. We have Jim Lanzone. He's the CEO of Yahoo. And also Ranjan Roy is here with us, a rare appearance on a Wednesday show. I want to welcome both of you. First of all, welcome, Jim. Great to see you. Good to see you, Alex.

0:34And welcome, Ranjan. Ranjan, you kind of kicked this off. I think that we were talking about this on a Friday show, and you mentioned something like Yahoo is the most underappreciated company in the entire tech world. And you expressed your excitement. We had so many people write in talking about how they were interested in the Yahoo episode as well. So I'm curious to hear just to start off, and then I'll let you ask the first question to Jim. But set us up here. Talk a little bit about your passion for Yahoo and why you thought this was an episode. 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.

1:15Meanwhile, Yahoo is the number one news site in the country still per traffic, number two in sports, number two in email, number one in finance. Eight out of 10 Americans visit a Yahoo property every month. The numbers, when I've heard them, are astounding, yet we spend time on the minutia of tiny media startups or tiny tech startups. So the fact that Yahoo was taken private, is being worked on, and different strategies 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.

1:56Media and tech. Okay, so now we're really saying I'm bigger than AI? Come on, come on. Okay, so let's bring Jim in. 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, Ranjan 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.

2:30So can those both be true? I do think that they're actually both true. I've said that before when, you know, asked about coming here and what was in the decision. Look, it does have a lot of the trappings of a big turnaround. Otherwise, you know, given all the things Ranjan 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 were to take the name off of it, I've said before, with this many users, this much revenue, this much profit, you know, what would that be worth?

3:12How would you think about that company? At the same time, it's been through the ringer, you know, over the years, right? A lot of time, as a struggling public company, eventually sold to Verizon, spent five or six years there. And so, 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 humble about it at the same time. You know, in some ways, it kind of mirrors the story of the web. I mean, 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?

3:56And the company still has all this size, yet, I guess, financially, it can be tough to make money on the web. So you have all the traffic. 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, I think it's all a matter of perspective. 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 size company. and uh and you know searches i used to work in search for a long time and and back at it now that that's one way of making money from a large amount of traffic ads are obviously another subscription lead gen e-commerce some of those are probably the main the main five um one of the big things that we have going for us uh is not only size but also you know the majority of our impressions and are from logged in users.

5:00So we have a huge amount of first-party data. People are coming direct to us. And so that's another big difference is that people choose Yahoo Finance. They choose Yahoo Sports. They choose Yahoo News and Mail. And so we're not thirsty for traffic and out there trying to get it in unnatural ways. We're lucky to have people coming directly to us. 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 should be trying to achieve at this point. Our strategy is much more to lean into our brands. And we've hired general managers to run each one of these brands as an independent business.

5:42They're our cousins, they're related. People do go from site to site and app to app. But they each have different ways to monetize and they're in their given verticals. They'd have different audiences. And the strength that the company is actually to lean into that, but not to compare ourselves to Facebook or Google or something much larger. 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 to get the company from where it was as a standalone company or part of Verizon to where we need to be as a new standalone company going forward, which is a lot of the work we're doing behind it.

6:23But 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 how the general manager strategy versus a kind of centralized approach that it sounds like things used to be operated under, but what does that look like in one vertical versus another? 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.

7:07And we had little ones like Last FM. 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 and entrepreneurial and let them run, running their business.

7:46And our job in 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 is 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 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.

8:28And so, you know, so Ryan Spoon, who came in, ran ESPN product for eight years, BetMGM, so rare. He is the GM and president of Yahoo Sports. Toppin Pot, who way back was Jeff Wieners number two at Yahoo back in the day, but he was the COO of NerdWallet. And so he's the head of Yahoo Finance and then hired another person from the fintech industry as the head of product. Kat Downs Mulder 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 these people. I brought in some of my search guys for the search team, et cetera.

9:10So you have dedicated experts who are the best at what they do. My job is to support them, maybe play dentist on their plans and some of their process and people. But, you know, otherwise, like I'm there to let them run. 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.

9:58But 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 the eye 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 and we've been here 29 in various formations um you know what is our what is what is the mission today what is our reason to exist today and and and why have people been so loyal to it over time including the fact that they missed search, which is kind of something you can't undo.

10:55And we talked about that, but the move to Google in June of 2000 was its own thing that time was spent trying to undo, but at this point is not a realistic job. We can still participate in search and make good money from search, but 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.

11:35As we think about other categories that we could be in going forward, we would think about the same way, like where is that trusted guide needed to help people accomplish their goals, big or small, when they come to Yahoo. And not to be judgmental about that. It could be the weather or it could be trying to make a million dollars or it could be saying your March Madness brackets this week, which I was just doing before we got online here. 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.

12:06What 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're you would go to the portal to figure out like what the sports score was or who won, read the game story, find out how your stocks are doing. And then like your content businesses, I guess, are natural evolutions of that. So it seems like you're planning to think of new areas to expand into that you could play a similar role.

12:41Well, I don't I don't even think of them as content. We have content. I want to talk to you about that. Yeah. Yeah. 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. 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, so the real underpinning of Yahoo are unique data sets, superior aggregation, and then having content anchors that provide context for everything that you're doing.

13:30And so those are really the three underpinnings of every vertical that we have. But, you know, setting your fantasy lineup is not content. you know setting up your stock portfolio and checking it and making trades is not is not necessarily content and you kind of go down the line and just say of course news is although things like you know weather is is you know there are other parts of news that that aren't obviously mail and search are not media and content that's a traditional set so i think we deploy media to help people uh 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 seems like one of the key insights that you're bringing into the company is that, and maybe it was there before, but you're certainly seem to be enhancing it.

14:12It's like, we were looking at all of 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 a 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 you with Yahoo Sports, you, you bought the peer to peer gambling site wager. So it's like finance plus extra services, it's sports plus, you know, potentially some gambling, you know, you look, you look through it.

15:00Each one of these content verticals has something more. And it looks like you've also and 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 is that - Well, yield one up actually. So there's a logic to that. Right. So, but I guess like to me, is that sort of your answer of like what doing, what running a successful business on the web today really requires? It's like both that content hook, but then also some sort of deeper engagement with the audience that goes beyond just reading the story. Yeah. And again, we're lucky to be in verticals and own products where we're not chasing traffic.

15:44You know, 86 % of U.S. internet users hit Yahoo every month. I think it's 36 or 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 at a certain frequency, right? I think those are the unique 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 cliche, but that's absolutely the job.

16:24And over time, though, that changes always. So you're never done. It's like it's, you know, paying the Golden Gate Bridge, which is why I actually think Yahoo can be around another 29 years. It's like the need people's goals are not going away. And our first job is in the verticals that we already own to do an A plus job of delivering 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. If you look at the rankings, we're number one in beauty and fashion, even though we don't really have a really dedicated product to that.

17:02Things 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 had 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?

17:40Well, step one is to lean into the individual brands. So you have to nail that first, given where, 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 across every one of these verticals, it's already embedded into the product, so we're building behind that. But I do think that the notion that we could anticipate user needs and deliver what they want, you know, in the least amount of work possible is another way you could, you know, you may say it's like a portal, but you're kind of coming out for a different reason, but it kind of gets you back to the same place.

18:30And we do need the Yahoo brand to be really strong in support of those brands. And then eventually, if you do it right, then the Yahoo brand itself can have its own place. And I think coming back at that in a, you know, in a slowly but surely over time, one of the things I found since I got here is that, and 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 way one really small example is we just dipped our toe in the water at South By I don't know if you guys know what Pool Suite is no what is it?

19:27it'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, 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 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 is a little latent love there for the brand if we were awarded the right way.

20:11Yahoo is 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, in the near future, the most common way for AI to be deployed, if you're not talking ChatGPT or some of the, you know, some of the companies that have taken off, is going to be, you know, for core services.

21:02And 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 your email, edit it, search for it, summarize it. You know, it's 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 on mondays after uh after the games on sundays summarizing that week's games um making fun of people for the name of their team that was all happening through ai there's a lot more happening with that um finance obviously helping you you know um invest more smartly so every every one of these verticals has it obviously we have search too and so we have our Microsoft relationship.

21:57That goes back a number of years and will go a number of years into the future, but bringing that into search is obviously happening, is a no-brainer. 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, 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.

22:32And 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. Did you know your credit card points and miles can lose value to inflation? Credit card companies often reduce the redemption value of your points and miles. Now imagine a credit card with rewards that can grow in value. With the Gemini credit card, you can earn Bitcoin or one of over 50 other cryptos instantly with no annual fee. Every swipe at the store or gas pump earns you instant rewards deposited straight to your account. Plus, sign up now for a$200 Bitcoin bonus to kickstart your rewards.

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23:42What the hell is going on right now? And why is it happening like this? At Wired, we're obsessed with getting to the bottom of those questions on a daily basis. And maybe you are too. I'm Katie Drummond, the Global Editorial Director of Wired. And I'm hosting our new podcast series, The Big Interview. Each week, I'll sit down with some of the most interesting, provocative, and influential people who are shaping our right now. Big interview conversations are fun. I want a shark that... That eats the internet. That turns it all off. Unfiltered and unafraid. So in a lot of ways, I try to be an antidote to the unimaginable faucet of reactionary content that you see online, to the best of my ability.

24:24Every week, we're going to offer you the ultimate luxury of our times, meaning and context. True or false, you, Brian Johnson, the man sitting across from me, one day, at some point, as of yet undefined in the future, you will die. False. Tell me more. Listen to The Big Interview right now in the same place you find Wired's Uncanny Valley podcast. Subscribe or follow wherever you get your podcasts. And we're back here on Big Technology Podcast with Jim Lenzone, CEO of Yahoo. Great to have you back, Jim. Good to be here. Ronjan Roy is here with us as well. The Yahoo episode, we're doing it. The Yahoo episode.

25:04Thank you, sir, for my giant Yahoo coffee mug. And a Yahoo football helmet in the background that's vibing pretty strongly as well. Jim got the memo. A little bit of BYU vibe to it, but yeah. So before the break, we were talking about search. And obviously, you guys will have decisions to make on that search bar. We talked about this a couple of weeks ago, but Gartner had this number out that said traditional search was going to decline 25 % in a year and a half or a year and three quarters by 2026. And I interviewed the Gartner folks and we talked about it and their big thought there was like, it's going to take basically big platforms with a lot of search real estate to say, we don't want traditional search anymore.

25:50We'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.

26:29I 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 2026. And they're projecting a lot with that. yes a lot of a lot of extrapolation a lot of extrapolation my first 10 years in search including ask jeeves where we were part of the turnaround team there um so natural language and all those things are near and dear to me um direct answers all that um yeah look for for our search the the i mean there are people who start their search experiences with yahoo a huge number of people are searching because they're there for all the other services that we have.

27:24Our job is to be awesome so that the next time they're with us and think, yeah, I may as well just search 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 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.

28:08I 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 my art team had asked in that 2003 to 2007 period we really led the way on direct answers and getting beyond 10 blanks 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 um we actually ours is pulling from structured databases to to bring you know weather or, you know, lyrics or whatever is going to be right into the page.