50亿美元收购案5年后：Apollo的雅虎打法

Apollo has been one of the most prolific deal makers of 2021.

Private equity powerhouse.

Apollo would be acquiring Yahoo from Verizon for $5 billion.

Yahoo is one of the most iconic brands in internet history.

This is a legacy brand.

The original sin of Yahoo was giving search away to Google in June 2000. There’s this myth on the internet that they were defeated by Google because they took their eye off the ball or whatever. It was worse than that. They outsourced it. Yahoo hadn’t had its own search engine in 17 years.

So where does most of the audience come from?

Yahoo Sports has over 100 million users a month. Yahoo Finance has over 100 million users a month. Yahoo Mail—one-third of all Americans have a Yahoo Mail account. All those things fit together and add up to 700 million users a month. There are companies valued more than us that have less than 0.1% of our user base.

I really believe that the best days of Yahoo can be ahead of it. I think now we’re in a comeback phase.

Jim Lanzone, welcome to Sorcery.

Awesome to be here, Molly.

Well, I know you’re traveling all around the world.

Totally.

So, thanks—

Yeah.

—for making the stopover here in L.A.

I know. We made it work.

So you’re here for the Snap board meeting?

Yep, that was why I was in town for this. I came straight from Aspen at the Forbes CMO conference, and I’m on my way to Amsterdam next week for HumanX. This is just that time of year.

Oh my gosh.

Back out of the summer, right into it.

I understand.

Yeah.

It’s like back to school.

Yep, 100%.

Well, I’m so excited to talk today about everything Yahoo and the legend behind Jim Lanzone.

Oh, jeez.

Because there’s a lot. There’s a lot going on there.

Oh, okay.

But I think it would be great to start off with Yahoo, because Yahoo’s on a tear. So, back in 2021—

Yep.

—that’s when Apollo bought Yahoo from Verizon, and Verizon sold off a couple of assets. It was AOL and Yahoo. So that was around $4.5—

Yeah.

—about $5 billion.

A little more—$4.8 billion.

Okay.

Yeah.

So, nearly $5 billion. You bought the assets. Could you walk me through that? What was that process like?

At the time, I was somebody they called during the process of deciding to buy the company. I wasn’t part of Apollo then. I left another job to come do this, which we can talk about—why I did that.

The history was that Verizon, under different leadership, had bought AOL and then, a few years later, Yahoo. They merged them into one company, first called Oath. They then changed that name to Verizon Media, but it was all those assets under one roof. The new Verizon management team decided they didn’t want to be in that business anymore. I think it took them a few years to find the right buyer at the right price, but Reed Raymond from Apollo, one of the leaders of their private equity group, got in there and figured out how to construct a deal that would work.

So what was the construction of the deal?

It was about getting the right framework for Verizon, because they wanted to maintain some ownership, which they did. They still own 10% of us. Then there was having a vision for what this thing could be going forward.

I think combined, they were bought for about twice what we bought it for. During that time, they’d had a different mission than I think either company had ever had before. It was really to help Verizon grow 5G and be a part of that. A lot of the decisions were based on that, and not really on the real mission of what Yahoo itself was about.

The company that was set up was a brand-new company. We’re a 5-year-old company managing a 30-year-old brand at this point. It was a completely new company, stood up from scratch to house these brands under one roof. They bought it in May 2021, and it closed in September 2021. I started around the end of September 2021, so it’s been almost exactly 5 years for me.

Well, congrats.

Yeah. We made it.

So this isn’t your first turnaround. When you came in, where did you come from? What were your first couple of steps for the next 6 months or so?

It was the middle of COVID. September 2021, if anybody remembers, was when I think the Delta variant was starting. We still didn’t meet people in the office for a while after that, and the decisions were, “If you come in, do you have to be vaccinated?” That’s what that time frame was like, so it was kind of a weird time to pick up a company.

I had just done it a year earlier with Tinder. I had worked for the IAC family before they bought our company in 2005. That’s how far back I go. Those same people brought me back for that job, again in the middle of COVID. That was July 2020, so it was an even more difficult time to pick up a company because we really never met anybody for that year. Here, we were back to work pretty quickly after that.

For me, this was actually the third time I was going in to lead a turnaround. The first was Ask Jeeves, which is kind of the poster child for the Web 1.0 crash. However difficult this one would be, nothing would be harder than turning that brand and those products around at that time. I think I was announced on 9/11. I think that was actually my first day on the job.

They had bought the ’90s startup I was part of, where I was one of the founders. I joined there as one of the heads of product and, over time, worked my way up to CEO. We 50x’d that stock and sold it to IAC and Barry Diller. I stayed for another 3 years as CEO, then left to do another startup. That was bought by CBS, the television company.

I joined as the CEO of their internet group, which had bought multiple public companies over time that just weren’t performing at their best. That was turnaround number 2. I think that’s still the sixth-largest internet company by unique users. I think we went from 70 to 220 million users with those properties.

I’d been through big internet turnarounds before. Yahoo was one that I knew had great bones for a great turnaround. It had the thing that was hardest to get, which is traffic. It had a lot of traffic, but the products had seen better days. Coming out of years at Verizon, the company structure and composition were not optimal. But those are things you can work with.

The first 6 months were from the playbook I’d run before: evaluate the team. I don’t come in guns blazing on day one. I get in there and get to know everybody. There are always great people wherever you go, and there are always things you don’t understand from the outside. Until you’re inside running a company, it’s never exactly what you’d think. The data will tell you differently how the products work, who the audience is, all those kinds of things. Those first 6 months are really about getting to know it, and then that leads into all the different steps of a turnaround that come after.

I think this is interesting because there are so many different angles to this. I just had a conversation with Bending Spoons, which is the opposite of a PE playbook, but this also isn’t really a traditional PE turnaround because you’re leading the way. It’s not like a private equity company is coming in and just stripping out as much as they can, but you’re really ushering this. So talk about how that’s different for you and maybe the traditional Apollo PE playbook.

It’s interesting because I still have people ask me, “What’s it like working for private equity?” The reputation isn’t always great for how they’re going to manage these things, but I’ve had the opposite experience. Reed and I still talk almost every day in some form, 5 years later. He was wearing a “Make Yahoo! Great Again” purple hat around.

PE is in it for a reason. They want an outcome, whether that’s an IPO or a sale. They’re not here to hold it forever, to be Stripe and just never have—

Yeah.

—an outcome of some kind. At the same time, there aren’t that many companies they view as having asymmetric upside relative to others, where you just run the PE playbook. They hired a team, starting with me, who wouldn’t be here if they did that. I’m a growth person. I only do the turnarounds to get to the fun part, which is when you get to start putting irons in the fire for growth, reap the benefits of the turnaround, and start investing and building new things for the huge audience you inherited.

Um, that really is how Apollo was treated the whole time. I’ve had to work for many different kinds of people, including venture capitalists. At my first startup, I’d never had a real job before; at my second, Bill Gurley and Jeff Yang were my 2 main investors. I’ve also worked for Barry Diller and Les Moonves. Everybody has to serve somebody, and I haven’t found private equity—at least with my Apollo team—to be a particularly difficult force to reckon with compared with other people I’ve had to work for.

So what are the main questions you start asking once you get into the company?

There are a couple of things. One is that Yahoo, in particular, is a conglomerate. It’s not one brand. If you look at other companies around our size in the industry—Pinterest, Snap, Reddit, Roku—they’re mostly one-product companies. Yahoo is a conglomerate of many different brands that compete independently in their spaces.

Yahoo Finance competes with Bloomberg, CNBC, and maybe The Wall Street Journal. We have a new product that competes with TradingView and others in that space. Yahoo Sports competes with ESPN and others like that. Yahoo Mail competes with Gmail. They all have very different competitors, and that creates this ecosystem of brands.

That’s not the first time I’ve seen that. IAC had 60-plus brands, and with Ask, we joined that family. CBS Interactive had 30-plus brands, many of which had nothing to do with CBS. CNET was the leading technology site. SportsLine was one of the OGs in sports and fantasy sports. Last.fm was in music. You go down the list: GameSpot in video games. We had all kinds of different brands, and we had to figure out the right structure for them.

I did it wrong at CBS Interactive the first time. I tried to have everything report to me. My background is all product, and I was a pig in slop with these brands, many of which I was a user of. It turned out I was just going to slow things down; we needed to move much faster. I had to hire general managers who could be entrepreneurial and independent. My job was to work with them on their plans, hold them accountable, help where I could, and let them run.

It was interesting when we got here. Whatever had happened through the years at Verizon, the company had evolved into one with a single head of product, one head of technology, and one head of content across all the brands. There were people and engineering teams who specialized, but they were spread across them. So the first thing we did was reorganize the company into more of a conglomerate structure, with GMs in all these groups.

That means each group gets its own head of product, technology, and content. Even for central functions, they’ll usually have their own head of sales, marketing, PR, and business development. Those people will be assigned to those divisions. We had to put that structure in place, and then I had to hire for it. Some of those people were great internal candidates who were going to be part of it. For some roles, I had to go get true experts who were badasses in their fields.

That’s what we did. We started putting that team together, and that was really the 2022 timeframe. The next step, once you have that team and understand what you’re doing, is to ask: Are we doing all the right things? Do we need to reduce our focus? Are there things we should spin off? Where are we off the mission of the company?

The mission also had to be reinstituted. If you go way back, the original sin of Yahoo was giving search away to Google in June of 2000. There’s this myth on the internet that Yahoo was defeated by Google because it took its eye off the ball or whatever. It was worse than that: Yahoo outsourced search—

What?

—first to a company called Inktomi, and there were actually others before that. Then the market crash happened, and to get a better deal and save money on something viewed as a cost center, Yahoo gave it away. Search was viewed as a utility that wasn’t core, even though 92% of all sessions on the internet at that point, I think, started with search. One reason was that there was no business model yet. What became Overture, and then AdWords and AdSense for Google, didn’t exist.

All the search engines—and there were 10-plus of them that were public companies, including Ask—had banner ads everywhere on their search results pages. Just imagine how bad that was. It came from the right place; it just wound up being something really hard to recover from.

Generations of Yahoo started to figure out other ways forward. In the 2000s, while they did some very interesting things in search and other places, they made forays into Hollywood. They had Yahoo Music and TV, and all kinds of other things. They hired a lot of people from Hollywood. There were then a series of different CEOs. In the 2010s, they went back at Google and tried to go that way, and then eventually sold to Verizon.

The mission of the company was to help Verizon with its mission. It turned out that underneath all that, the reason Yahoo continued to be successful all those years, with its huge audience, was the places where it was still fulfilling the original mission Jerry Yang and David Filo had in 1995: being the trusted guide to the internet, helping people through the Wild West the internet had become and helping them get things done.

In Yahoo Finance, Sports, News, Mail, and different parts of Search and Weather, and in all these places where we still had leading brands, that’s what the company was doing. So we had the benefit in 2022 and 2023 of focusing on the things Yahoo was doing well. We didn’t have the burden, first of all, of being a struggling public company. It’s very difficult to make those changes in public. And second, we could focus on the things we did really well, where we were already successful. That’s where our focus went during that timeframe, which meant we spun a lot of things out or shut—

Nice.

—or shut them down.

That’s really fascinating. It’s also really funny to think back that Verizon bought Yahoo. What an interesting—

Well, it was first AOL.

Yeah.

—and AOL had tilted more toward media during that timeframe.

Mm-hmm.

Tim Armstrong, who’s a great CEO and a good friend, had gone that way. Verizon had a vision that, if you remember, AT&T also had because it bought Time Warner.

Mm-hmm.

At that time, those 2 companies thought that was the way forward. AT&T made a much bigger bet with Time Warner that wound up obviously spinning back out. At Verizon, it was AOL, and that team was the one that convinced them to buy Yahoo and merge the 2 things together into this huge internet conglomerate with an immense audience and immense amounts of data that could then be used to target in really interesting and good ways. It was a really good vision, but it was inside the wrong company.

So where does most of the audience come from now and then?

It’s back to the conglomerate structure, piece by piece. Yahoo Sports has over 100 million users a month. Yahoo Finance has over 100 million users a month. One-third of all Americans have a Yahoo Mail account. That’s hundreds of millions of accounts.

Then there’s News, where we’re one of the top 3 properties as an aggregator. We talked about that as another strategic move we made: going back to focus on aggregation instead of enterprise news and competing with the Associated Press and others. That shouldn’t have been our job. It had gone that way over the years.

All those things together add up to 700 million users a month. Every month, we’re in the top 5 in the U.S., usually top 5 globally, and number 1, 2, or 3 in all these different categories.

You did mention that you guys divested a couple of things. You divested some pretty notable assets, whether it was AOL, TechCrunch, or a handful of others.

Yeah.

So what were the ones that you divested, and what were the decisions behind that?

AOL was the biggest. We could talk about that. The first one was Edgecast, a content delivery network competing with companies like Akamai, which we felt we didn’t have a right to operate.

The second, and probably the biggest transformation job we had to do up until now—now we’re having to transform the whole company around AI—was the ad tech business. AOL and Yahoo had each purchased 30-plus ad tech companies over the years. What we inherited was a three-legged stool of an SSP, a DSP, and a native platform, with a couple of issues. One was that it lost a lot of money.

Mm.

Operating those things was massive, and it was hundreds of millions of dollars a year out the door that we had to fix. The second issue was that it was the primary source of revenue for Yahoo. Instead of being able to play the field with our supply-side platform, pull yield levers, take all comers, and optimize for the highest yield, we were only taking ads from the ad tech business.

Offloading that did 2 things. We shut down or sold money-losing businesses, and we were able to truly optimize revenue on Yahoo proper. So it was 2 things. As part of that, in February 2023, we had to let go of over 2,000 people.

Part of that was because we didn't want to sell the SSP. A lot of people wanted us to, but we didn't want to give anyone preferential treatment on our pages the way we had been doing. We wanted to be able to optimize yield, so we had to shut that down. We sold the native business to Taboola and took 25% of their company. Those were the 2 things.

We offloaded more things, like TechCrunch, which you mentioned. We just did AOL in October of last year, while focusing on the DSP. So it wasn't just offloading things; there was also the decision that there was a crown jewel in there, and we could invest in it. A lot goes into all that.

Mm-hmm.

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In the conversation with Bending Spoons, the biggest misconception about the AOL transaction was that it was actually a really healthy asset that you got to a really healthy point. So let's talk about the transformation within the company. You joined during the height of this AI hysteria and invention time.

No, it wasn't even on the map yet. That was November 2022. In September 2021, we had no idea.

I don't know how you manage it. Now we're in this crazy world of AI, whether it's transforming your company or your business model, or competing with you and challenging everything around you. How did you think about rebuilding the company over that time period and incorporating more technology?

The first thing is, in a transformation job, I always tell the team: You can't skip levels of the video game. You have to go level by level and win each one to earn the right to the next. It always comes down to product. We're a consumer internet company. That's what we do for a living: build great products. If you're not doing that, it's like *The Shawshank Redemption*: You're either getting busy living or getting busy dying. That's how it is with this. Some of these products hadn't been worked on in 10 years.

Really?

Some of these things hadn't really been improved. It was time to get back to work. We hired great product people, and we have an amazing team now that I would put up against any other big consumer internet company. We brought in great people who share our passion for putting this brand back on the map, all of whom have entrepreneurial backgrounds. Every general manager, from me on down, has been an entrepreneur at least once and started companies.

Improving the products is definitely game one. If you can do that and start getting growth going again, then you can get to building brand-new things like Yahoo Scout, our search engine that we launched earlier this year. Yahoo hadn't had its own search engine in 17 years.

That's so crazy.

Or College Fantasy Football—

Yeah.

—which we kind of broke the internet with when we announced it this summer, and it's been amazing. Forty percent of the people coming to the platform are brand-new to Yahoo. Yahoo Fantasy is huge. We had our 3 biggest days ever this year for NFL, but 40% of the users for College Fantasy Football are new to Yahoo.

Wow.

Doing these brand-new things is the reward you get for doing the hard work and the turnaround work in the first place. The next step is the brand, which has been one of the most surprising things about this. Having been through the wringer with some other brands through the years, it's been incredible to see that Yahoo has a lot of latent brand love, especially with younger audiences.

We've talked about this, but over 50% of our audience is Gen Z and millennial. Seventy-five percent of Gen Z is using Yahoo or one of our products. When we market, we've done a lot of really interesting things. We have a great social media team and a really creative brand advertising team. We've seen a 31% absolute-point lift in brand love with Gen Z, which is one of the things you track. That's from our Cardi B campaign—

Yeah.

—our Kyle Cooke Weather Boy campaign from *Summer House*, and all the social media things we've done. It really is met with great reception.

Mm.

That gives me hope that the more we turn that dial, the more there is to do. Again, if you don't have great products, you have no business even trying.

This is going to be a theme throughout the conversation because you're a product expert. To get into that further, what makes a great product? What are the hardest lessons you've learned in that process?

That's art and science. It starts with data and understanding your user base, which you never really understand from the outside. I have a bunch of college friends from UCLA, and to help me get to know this college product, I got a bunch of them on it. They beat me up all day long for things they're finding in the product. When I then go talk to the actual product team on the sports team about what's driving things behind the scenes, whether something's really wrong or it's just one person's opinion, it's different.

Take search, where what happens on the other side of that search box is so complicated, especially now with AI, but even going back to the old days of 10 blue links. You enter that query, but what we have to do on the other side to capture that and understand what to do with it is incredibly complicated. How to do that for hundreds of millions of people and move the needle forward is different from what it might be for one user. Data is going to lead you forward.

After that, it's creativity and people who have a sensibility for users. One benefit of having a huge audience is that you can A/B test your way to things. You can have a hunch, and especially now with AI, we can experiment even more. I do think product teams can get a little too addicted to that or become too cautious and want to do 200 tests at one time. You can't do that. You have to have some passion for what you think the product should be and lead with that.

Yahoo had something I experienced at prior companies: this huge audience. That's so hard to get. If you look at the top internet companies in Comscore or Similarweb, it's incredible how many are from the '90s. It's amazing how many are from the early 2000s: YouTube and Facebook. We're all about 30 years old. Google is almost 28 years old. YouTube is 21 years old, and Facebook is 22. We're all kind of in the same age range at this point. New brands only get added to that once every 3 to 5 years, right?

Mm.

ChatGPT was the latest. Before that, it was probably TikTok, Snap, and Instagram. It just doesn’t happen very often. I hesitate to call it a moat, because you can lose it so easily if you don’t treat it right, but this level of distribution allows you to improve the products and have them work, right? That’s different from trying to light the wet log from scratch, which is what entrepreneurs have to do.

That’s why so many of the biggest consumer internet companies happened by accident. They really weren’t the thing they intended to be a lot of the time. We have a great platform to build great products on. We’re lucky to have that.

Of the other companies you mentioned, it’s interesting because you have great brand perception and brand love around Yahoo, but these other ones in the AI world have horrible brand recognition and are seen as evil. Why do you think you’ve built up so much trust and excitement around the brand instead of being cast into the doomerism side of the internet?

To be honest about that one—

Yeah.

—it’s because we’re not building a large language model. We’re not at the frontier. We’ve built our search engine, our AI answer engine, in an entirely different way that I think is bespoke, cool, and interesting, and provides really unique results compared to all of them, which were all created in a similar way. I think they start to blend together in certain ways when it comes to search.

It’s probably that. Yahoo did have a data issue in a different regime 14 years ago, but other than that, it’s been a really trusted brand over time and has continued to reward that trust. If you’re going to have your email be the vault of your life, the operating system of your life, that’s why every one of these new agent products first asks, “Can we have access to your email and calendar?” I think that gives us a place to play in that space.

Absolutely.

Yeah.

It’s the trend we see right now.

But it’s our obligation—

Yeah.

—to do that for people anyway. We have to build those products to do our job as best we can for our users, no matter what. But we also have trust. We already have people using us for those things.

I think that’s happened over 30 years. It’s always been an irreverent, positive brand, with a little tongue-in-cheek kitschiness to it. Even when it first started, that was always part of the Yahoo brand. We’re really leaning into that. Our social team has a lot of fun with it, and a lot of the brand work we’ve done will continue in that direction.

We’re never going to have a Super Bowl ad that tries to make you cry. It’s always going to try to make you laugh or be different. But trust is ours to lose, and new brands will always have to figure that out.

It’s interesting to go into that world and talk about your new products, especially Scout. Where does Scout fit in terms of AI search, compared with ChatGPT, Perplexity, Anthropic, and even Google?

From the start, it was more like Perplexity.

Okay.

Perplexity isn’t its own large language model. They were doing metasearch on the others, which has happened before. There was a product called Dogpile in the early days of search that was a metasearch engine on other people’s search engines. Yahoo Scout is totally different. The others are all large language models: Gemini, ChatGPT, and Claude.

Ours is a product based on our own data. There was so much interesting data, which is another asset. I’ll put “moat” in quotes because I’m always paranoid about it—you can’t rest easy with this. But it’s an asset: hundreds of millions of users a month over 30 years, and we’re still the third-ranked search engine in the U.S. We have 30 years of search history. Even though we’re much smaller, that’s still a ton of search history.

Our publisher relationships are another way we’ve taken the company back. Instead of competing with our publishers, we’re trying to make sure we partner with them. It’s our job and our legacy to send them traffic.

Yeah.

We firmly believe in that. It’s part of our job in the ecosystem. Having been a partner of Yahoo’s at other companies, I can attest to how much traffic they could send us.

So we have publisher data, search data, our knowledge graph, and our user data, if we know something about you. The way Yahoo Scout, our AI answer engine, works is that we take all that data, ground it, and send it to a lightweight model. At launch, it was Haiku from Anthropic. We use others today. They process that and send it back to us, and then we do the rendering, the formatting, the UI. What that creates is an entirely unique result that can only happen because of Yahoo data.

We’re also a top-20 publisher whose content has been taken by large language models without permission. You’ll see the Yahoo brand show up all the time in citations. For the most part, our content is real-time. We excel in categories that are real-time, so we weren’t as susceptible to the evergreen content that large language models photocopied and took with them. Especially in certain categories that are more real-time, our results are awesome and totally unique.

The other reason we had to do that is that for 17 years, we were outsourcing search largely to Microsoft, with whom we’re still great partners. But that left us in a really vulnerable position for one of our most important products and revenue streams. The ability to fend for ourselves and own that asset again was life-changing for us.

Besides that, I spent my first 10 years in search, and our old team innovated a lot of the most interesting things, especially in structured data search. Things that went beyond 10 blue links were already an area of search I was personally passionate about. We have our own unique entry there, and it was also a very strategic asset to own.

I think about this when I talk to all of the high-growth tech companies and see all the pivots. We were joking about this earlier, but with Allbirds and its AI play, for example. When you’re taking the reins and rebuilding and transforming the company, how do you stay focused and avoid getting into these money-grab areas, like AI coding, AI assistance, becoming a neocloud all of a sudden, or using your data centers for other stuff, and instead stay focused on one product at a time?

Yeah.

For us, it went back to the thing that can feel like the cheesier side of this job: the mission. It really mattered here, and I took my time with it. I rolled out a brand-new mission for the company with a 45-minute-to-an-hour-long presentation. It was actually much longer for the management team at my team offsite. We did a condensed version for the whole team. I spent almost a year working on it with the team, and it came into focus over 6 months of really doing the work. Everyone in our company understands it now, can recite it back, and knows what we’re doing and why, in real detail.

As I said earlier, we’re the trusted guide to the internet, helping our users accomplish their goals, no matter how big or small. We’re not judging. A trip to see the Taj Mahal, beating the snot out of your friends from UCLA in fantasy—it doesn’t matter. Our job is to help you make a dollar in Yahoo Finance, make a million dollars, or whatever it is. That’s a mission that’s 30 years old. It’s also a mission we can carry out for another 30 years as things change.

The internet is changing more right now than it ever has. That’s both an opportunity and a threat to how we deliver on being the trusted guide. As part of that, we were very specific in saying, “We’re not going to be an enterprise or B2B company. We’re going to handle your personal life.”

Yahoo Mail is where that’s most important, because Gmail sits in the Google Cloud group now and is really an enterprise-level product. Outlook is an enterprise-level product. There are things you would do differently if you were focusing on someone’s personal life with mail, as opposed to their work life. That’s an example of where we would do that.

What are the assets around that? Superior aggregation, proprietary data sets that you can leverage, and what we call content that provides context.

That’s why we got out of competing for breaking news. Some of these people, like Shams and Woj in the early days at ESPN, started at Yahoo!. When I got here, we had White House correspondents and all these different things. TechCrunch is another example: one of the most important brands in tech journalism, but it wasn’t right for us. Instead, we have the best fantasy analysts. We have amazing business analysts for analyzing the stock market. We just signed Deidre Bosa from CNBC—

Yeah, I saw that.

—who’s coming over to join Brian Sozzi and people we already had. That’s where we wanted to do content: to help our users make better decisions and accomplish their goals. That’s all cheesy, but it actually provides a really important filter for what we would and wouldn’t do. That still guides us today. We’ll look to add other brands, too. They don’t have to be Yahoo!-branded, but they do have to be places where we can provide those services for our users.

What’s been the biggest pushback you’ve gotten?

Probably just—do you mean from our own team, or from—

From your team, from investors, from the decisions you’re making: products to launch, products you’re not launching. What’s the biggest friction, or the thing people want most that you’re getting pushback on?

I’d say the easiest version of that is that when you’ve been around a long time—even though our user base is now skewing younger, and our fastest-growing areas, including Mail, are from Gen Z—people who’ve been around a long time don’t want you to move their cheese.

Mm-hmm.

Evolving those products in ways that you know are better for future users is hard. People who’ve been around a long time just don’t want to see those things change, especially the pure UI. They want things to stay the same, and the problem is that you’ll lose tomorrow’s users if you do that. I’ve experienced this at other companies, especially in places like fantasy sports, where if you change something, you lose certain users. They’re like, “I’m out of here,” even if the place they’re going has a lot of the UI or features we just launched. They’ll leave simply because you changed things. I’d say that’s probably always the hardest part.

Internally, I think we have a lot less of this now. The team we have is united around what we’re trying to accomplish. They’re people who have the right chip on their shoulders to be at a company like ours, which was going from turnaround to—now I think we’re in the comeback phase. I think we’ve graduated to—

Yeah.

—now it’s a comeback. They want to be here for that. They love the assets. They love to build. But in the early days, you’re telling some people there’s no Santa Claus, and there’s not, you know—

What?

Oh, shit. Sorry. We accomplished that here today. But, yeah, it’s just hard sometimes. You’ve been indoctrinated with certain things over the years, and I show up to start heading in a different direction. Some people just aren’t going to want to go along with that.

Mm-hmm. So you already paid back pretty much the price of the—

Yeah.

—yeah, Apollo acquisition.

Yeah, we’ve said that publicly.

Okay.

Yeah, it’s one of the fastest-returning deals in Apollo’s history, and there were certain things that went into that. The AOL sale was another part of it. But, yeah, we’re playing with house money now, in terms of what the upside could be here.

Did you feel pressure to pay that back quickly? What was the—

No, because Reed and the Apollo team constructed a really interesting deal.

Okay.

At first, some of the things they put in place were to return cash really quickly. I also worked with them for a few months leading up to this, and I knew I was pretty aligned with them on which assets probably weren’t going to make it. That was something we were pretty unified on.

And the goal is to go public. What do you think is going to surprise people most when you go public?

Well, I’d actually put the goal a little differently. It’s weird to think about Yahoo! this way, because it’s the OG, but we’re the same as any later-stage, pre-IPO Silicon Valley company. If we’ve created a lot of value—and I think we’re still one of the most undervalued assets out there—we have an audience this big. Something I didn’t mention is that we’re also not one of these companies whose traffic comes from SEO. We get SEO traffic, but 75% of our users come directly to Yahoo!. That’s one of the highest percentages on the internet. On any given day, about 75% of our users are logged in.

This is a very loyal, dedicated audience. The other benefit is that we’re incredibly effective for advertisers. We’re not a place to just throw random money at. We provide outcomes and performance at levels that other people don’t. Our DSP, which is an entrepreneurial venture here, wins nine out of 10 head-to-head tests, and that’s because of our data.

Yeah.

That’s because of our first-party data with our audience. We have these incredible assets that I just don’t think grow on trees, and I think that’s very valuable to a lot of other companies. If you’re venture-backed or private equity-backed, I think your investors expect an outcome, not for you to just be a standalone private company forever. That’s how I’d think about it.

What would be most surprising? I don’t know. Weirdly, I don’t know how surprising it’ll be. We’ve been pretty open.

Yeah.

I think our audience and assets are pretty well understood. When people hear our revenue and profitability, they’re both really good, and I think they’ll probably be in a range that’s relatively expected. Maybe what will surprise people is just how healthy we are and how much we’re growing—the rate at which we’re growing, which is really healthy growth, especially for a 30-year-old brand.

What do you think are the biggest mistakes companies make at scale?

Probably falling asleep at the wheel and becoming really conservative. People who’ve succeeded by climbing the company ladder—some of whom are probably great—tend to lead to a certain kind of management, based on what those people have been rewarded for over time. If they’re not product-driven leaders, honestly, in our space, it tends not to work.

In our space, you tend to lose sight really fast of what matters. Sometimes it’s the things an executive team misses: the chances they didn’t take, the company they didn’t buy, maybe the thing they sold, or a deal they did that they might not have done if a different set of leaders had been in place. Those wind up being the things that make a huge difference. The problem is that you’d never know from the outside, because you weren’t a part of it. You don’t know what was on the table and what wasn’t.

But you’ll start to see things catch up to them, especially on product. They’ll get beaten by a startup with something they didn’t launch, or something they didn’t get out ahead of. I just think product-driven companies, where you follow “Only the Paranoid Survive” and you’re going 100 miles an hour, seven days a week, trying to crush it for your users, are the only way to make this work.

Are you worried at all about any startups? Are you pinching yourself or kicking yourself over any acquisitions you didn’t make?

Here’s what I’ll say: no, because startups right now are so highly valued.

Yeah.

There are companies valued more than us that have less than one-tenth of 1% of our user base. I was seeing that early on. Search companies that launched were being valued at six times what we were, even though we already had a lot of searches and search users, as well as our overall user base, revenue, and profitability.

It is funny. We’ve been at a moment in time when those things have been really expensive. I’ve benefited, and I was one of these a long time ago. My ’90s startup, which I was one of the founders of, didn’t work out. We were writing our S-1, and the market crashed, and we crashed. We went on fumes until Ask Jeeves bought us.

But a bunch of us went over in the acquisition, and we were really important to that turnaround.

Mm-hmm.

We’ve actually bought a few startups where they weren’t pure acqui-hires. We used the product, but the people we brought in were incredible and have been leading the charge on some of the most important things we’ve been building. We’ve been able to be active that way, but are we going to do a merger with somebody who has a base in the billions when we bring all the value? We can’t do it.

I don’t know that we’ve really had the opportunity to buy anything we would’ve missed, but there are a lot of things out there that I think are really interesting in search, agents, fantasy, and finance. Our Slack channels are very active every day with things we’re all looking at and playing with.

I would imagine. It’s super exciting.

Yeah, yeah. We compete in so many areas that—

Mm.

—it’s almost hard to keep up with it. But that’s why we have great leaders across the business.

Because you’ve seen so many market cycles, when do you think this one pops?

Damn, if I only knew. It’s funny, though. If you go back to the mid-teens, that’s how many times people have called it, and people have gotten really conservative, thinking the market was about to crash, but it has continued to go up. If you tried to take your chips off the table at any point, it would’ve been a huge mistake.

I’ve been through how many crashes? The first one was the global financial crisis, then COVID, then there was a mini-crash in 2022. On the other side of COVID, pretty much right after I started here, we went right into that one. Even now, with the war and certain things, and tariffs last year, there have always been curveballs thrown at you.

This is another place where Yahoo excels: we’re a very resilient company. I always say that if we were able to survive before we had a team like this building the things we’re building and growing the way we’re growing, we’re going to be okay now. We’re in a great spot to survive if something like that happens. I’m in no way rooting for it. I’d love it if we were in some golden age that lasted 50 years, but we’ll be okay if we’re not.

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I know we started this and I said, “I want to know about the Jim Lanzone lore.” You mentioned so many people you’ve worked with and worked for. Maybe we can go back to Barry Diller and what it was like working with him. What is it like working with Barry Diller? When we talked a couple of months ago, right after the Dara interview, you also mentioned Dara. It’d be great to get into that a little bit and know what you’ve learned.

John Foley, who founded Peloton, was one of the people at IAC. He called me a journeyman at a conference we were at together, and he meant it as a compliment. He said, “You’ve been in so many different places and seen so many things.” It’s true. I’ve been around a long time and have been part of all these different regimes and companies.

If you’re not naturally good at this stuff, experience probably doesn’t help. But if you have experience, it can help a lot, and the people you’ve worked for are a big part of that. It was a really interesting time at IAC. Dara left right when I joined.

Mm-hmm.

He left to do Expedia when it spun out, pretty much right as I joined. I had a great first couple of years with Barry. He was extremely intense. Again, this was 20 years ago.

Yeah.

It was very different from the IAC that Joey took over and ran later. We had 60 brands at that point, and they went through something Barry later said he regretted: trying to turn into an operating company.

Mm.

Jack Welch was one of his main advisers at the time. Somehow, the decision was made to take these 60 brands that had nothing to do with each other and no common infrastructure, reverse that out, and give them a common central structure. That just wasn’t easy at IAC, given the way it was put together.

Then Barry and John Malone got into it in 2008, and that led to the breakup of a lot of the IAC brands. It really changed the rationale for why they bought Ask. We shut down search, outsourced it to Google, and that was how I wound up leaving. But Barry’s such an original thinker. I still don’t think there’s anybody who’s a better interview. When you see him on stage or on CNBC, his language is so unique to him. He’s so smart and so bold in the things he does.

I loved working with him. Steve Berkowitz, who was probably the biggest mentor I’ve ever had in this space, was the CEO of Ask Jeeves when we were bought by IAC. That turnaround was so respected that Steve was poached by Microsoft to run all of its internet business. Satya reported to him.

Wow.

I remember, as Steve was leaving, Barry and I had tussled over something, and Steve said, “You guys are just so much alike.” I thought, “Huh.” I wouldn’t have thought that. I was the Silicon Valley internet guy, but he’s very entrepreneurial, and I’m still inspired by him. I loved his book last year and told him that. It was an amazing experience.

The CBS years were great, too. The stock had gotten down to $3 a share a couple of years before I joined, and it went back up to almost $80. I was the Silicon Valley guy going to a place where they had to wear suits. I was told that because I was the internet guy, I didn’t have to wear a tie. They were number one 13 years in a row, and the stock was a juggernaut and always delivered.

If we’re lucky enough to be a public company again, I learned so much from being part of those public companies: how they were managed, how those teams were run, what made them special, and what made them work. I can take that with me.

So what was Tinder like?

Short, and during COVID. Those COVID times were difficult. I loved the team. I didn’t change one person on that team. I loved the management team I inherited, and I loved the fact that Tinder was viewed one way from the outside, but on the inside, you’d never met a team of people more passionate about the mission of helping people find their person. It was always perceived by others as a hookup app or whatever, but that’s not how the team internally viewed it.

Mm-hmm.

They were also very proud of being a source of diverse relationships. I think 40% of all marriages started online, and Tinder was 25% of those. That means almost 10% of all marriages in the United States were started on Tinder. The people there are very passionate about that.

I never would’ve left. It’s the only time I’ve ever left a job. Everywhere else, I stayed for a long time.

Mm-hmm.

Someone found a tweet I posted in 2010 where I said this was the ultimate turnaround, and these were the best assets for it. There was something about it I always wanted a crack at. I was always very passionate that Yahoo deserved to be treated right, to have great products again, and to put that brand back on the map the right way.

Maybe it was just part of me being part of startups and then turnarounds. I just always wanted to take a crack at that, you know? So here we are five years later. Yeah.

Is there anything we haven't covered yet that you'd want to go over?

I know we'll see it in the comments.

Okay.

And I'll go, I'll call and answer.

Okay.

Yeah, I think a lot of it is still things that we can't even talk about. We have a lot of awesome stuff we're cooking up in the labs.

What's the biggest secret you can tell us?

Yeah, no. I don't have an IPO date, or whether it's happening or not. I always am trying to keep the things that we're building a secret until we launch them.

Mm-hmm.

We have some really interesting things that we're working on. I really believe that this is one of those times when the best days of Yahoo can really be ahead of it.

Mm-hmm.

It took a lot to get it to this spot, but we are jamming now. I think people really have an open mind to us as a brand again, which has just been really gratifying. We don't take that for granted. We want to deliver on it, so onwards.

Amazing. I mean, I was gonna close out and ask: what are you most looking forward to in the next 12 months?

Yeah, I can't tell you.

Can't tell you. It's a secret.

Yeah. But there's some really great stuff, and it's just our team. I love our team. It's one of those jobs where I get up every day ready to go.

Mm-hmm.

There's just not one day where I'm dreading it. It's just, let's go.

Awesome. Well, Jim, thank you so much—

All right. Thanks for having me.

—for taking the time. This was so much fun.

Okay, good.

Awesome. Thank you.

Thanks, Molly.

Hey, it's Molly. If you enjoy our interviews, check out our newsletter, Sorcery.vc, where we deliver a once a week top deals and tech headlines email, and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.