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- [00:01]
Jim Lanzone
There's more to investing than stocks and bonds. With Ibid, you can broaden your investment mix and get bitcoin exposure. Learn more About Ibid with iShares by BlackRock. The market is yours
- [00:17]
Ann Berry
for Tuesday, April 7th is Brew Markets Daily and I'm Ann Berry. Picture this, it's the early 2000s. You've got dial up tones in your ears, a homepage full of purple links. A little company called Yahoo basically is the Internet. Search, news, email, finance the front door to the digital world. Until that is, things get a little messy. Google happens, social media explodes, mobile changes everything. And Yahoo, once the king, starts to feel more like a very large, very nostalgic attic. Valuable stuff inside for sure, but not exactly where the future is being built. So Fast forward to 2017 when Verizon steps in. So scooping up Yahoo's core business and tucking it together with AOL under a new banner called Oath, later rebranded as Verizon Media, the idea to build a modern media powerhouse, compete with the tech giants and capture attention at scale. It was ambitious, logical, very much so on paper, but never actually quite clicks. So roll forward to 2021 and enter stage left. Apollo Global Management, the private equity firm looks at Yahoo not as a relic, but as a turnaround story. An attic filled with hidden treasures. Yahoo Finance, Yahoo. Yahoo Sports, Yahoo Mail with massive audiences and deep, deep repositories of data. Plus trusted niche content from brands like TechCrunch, one of my favorites where I used to keep up to date on news in the venture space. Not to mention an in house ad tech platform in the same league as Amazon and the trade desk and even Google. So what exactly is Apollo's vision in this moment? Strip away the noise, sell non core assets to get their money out and play for upside with a laser refocusing of the core brands, treating yarn Yahoo not like a legacy burden, but as a modern digital platform with unfinished business. And today we welcome to the show Jim Lanzone, CEO of Yahoo and the man Apollo brought in to make it all happen. But first, a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more or curated just for traders.
- [02:27]
John Croteau
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- [02:35]
Ann Berry
Learn more@schwab.com Trading now, my conversation with the CEO of Yahoo, Jim Landzone. There's so much ground to cover, but I want to start with why you decided to go to Yahoo. And let me just frame that for people listening. You were in the CE role at Tinder, had a fantastic run there, still a great business. And Yahoo was being acquired by Apollo, the private equity firm which is known for buying assets that perhaps aren't the most straightforward ones and finding ways to get them reignited and grow again. So you weren't walking into a picnic necessarily when you took this job. Is that a fair assessment?
- [03:12]
Jim Lanzone
Kind of. I mean, we also stand the company back up as a private independent company again, which was its own, you know, task to do. You know, it had been bought by Verizon after having been a public company for 20 years and spent, I think, five years inside of Verizon. So. So that part, it was a challenge. But the same reason that Apollo thought it was a great opportunity is why I thought it was a great opportunity.
- [03:35]
Ann Berry
And what was that?
- [03:36]
Jim Lanzone
It had amazing bones. You know, again, I come out of all consumer Internet my entire career. I've run search engines, I've done the streaming wars, you know, Tinder for a spell. And through all of that, Yahoo was always one of the largest Internet properties. On the consumer side, it had trouble through the years for various reasons. We could get into some of those, including just being a standalone public company through some of that was just challenging corporately. But underneath, you can never replace having a brand that everybody knows. And the brand awareness of Yahoo is huge, and products that hundreds of millions of people use every day that maybe have seen better days and. And if you can invest in those products and bring in a great team, like I've done turnarounds before, like that's the magic formula for being able to get growth going. So as long as you are willing to go through the transformation work, which is not everybody's cup of tea, but I don't mind it. My team doesn't mind it, then there's huge opportunity for a property like that.
- [04:34]
Ann Berry
So talk about what you walked into and the portfolio of properties you had and then the pretty surgical work that was done to sort of whittle it down and then perhaps grow again to what you've got today.
- [04:45]
Jim Lanzone
Yeah, so Yahoo is even bigger than just Yahoo. It actually had been called Verizon Media, and when it was spun out, it was renamed Yahoo, but it actually owned aol. It owned several other non Yahoo brands that had kind of been acquired over the years. Underneath all that it still had some of the most beloved and highly used products. So Yahoo Finance, which you're familiar with and have been on Yahoo Sports and Yahoo Fantasy Sports, which are two of the most iconic brands in digital sports. Yahoo Mail, which is still number two to Gmail and on the personal side, doesn't compete on the corporate side with Outlook. It competes purely on personal. But it's still hundreds of millions of users of that product. Yahoo Search was still the third largest search engine. And then of course Yahoo Homepage and News is any given month the number one or number two news app. And so you put all those together and, and you know, just last month we were the third largest in the United States in comScore. It's still 700 million users worldwide. So you know, that really is the core of what Yahoo is today. We also, and today is a interesting day for it because in about five hours I will be on stage dressed like a cowboy.
- [05:58]
Ann Berry
Oh, where were you doing that?
- [05:59]
Jim Lanzone
Marketing team at our new front. So it's the annual, you know, presentation to advertisers and we also own the largest private DSP or demand side platform on the ad tech side in the world. So the big three competitors are trade desk, Google and Amazon. And we have the other major one
- [06:16]
Ann Berry
that's a hidden gem that people don't talk about a lot.
- [06:18]
Jim Lanzone
Hidden gem has been entrepreneurial venture for us the last two years we paired away a bunch of other ad tech companies that we inherited along with. We had a content delivery network, we had other things. We just sold AOL in the fall.
- [06:30]
Ann Berry
Yeah, TechCrunch.
- [06:31]
Jim Lanzone
I remember that TechCrunch and gadget rivals, which is a big high school sports. Site. So all those have been sold and leaving us today with this really healthy, growing, I think incredibly valuable, you know, set of Yahoo brands.
- [06:44]
Ann Berry
So let's talk about who you compete against. And I'm going to sort of be self deprecating to frame it so I don't cause offense. Technically I'm probably a geriatric millennial, right? I mean it's kind of older millennial. It's an older millennial. It's like the tail end older millennial. And I think of Yahoo as being the OG of search. You've alluded to that continued presence, but I kind of think of Yahoo as the geriatric millennial of digital media. So how do you think about staying relevant to or becoming relevant to the younger generation of digital consumers?
- [07:16]
Jim Lanzone
So not offended. Totally get the question. And one of the things I always say is what's Interesting about it is that Google is now. We just had our 30th anniversary last year. 31. Yeah, so did Amazon, so did eBay. Google is 28 years old. Twitter just has 20th anniversary. Facebook did a couple years ago. I mean, all of the major Internet brands, with the exception of just a few, are 20 plus years old. Now if you look in those comScore rankings, Microsoft is in there. The others are media companies like Disney or Paramount where I used to work. About every five years you get a TikTok or a Snapchat that comes along and now you have chatgpt of course. But the vast majority of them have been around a long time like us. Now the reason why you asked that question about Yahoo is we are the og. We were the original and still are the original. And of course the company went through, if you're from the industry like you are, a lot of ups and downs that people in our industry are aware of.
- [08:12]
Ann Berry
There was a concern it lost its mojo. Yeah.
- [08:14]
Jim Lanzone
And it goes back to, you know, really lost search in 2000 was. Was the thing. And there's a lot of interesting history to why that happened. They actually gave it away. They didn't lose it. They actually outsourced it to Google and everything that bad that happened came after that. But you know, then they were trying to figure it out. They went into media and they went a lot of things. And so what, what didn't change, what I walked into was that Yahoo Finance was still the brand people love. I don't use Yahoo, but I love Yahoo Finance. I don't use Yahoo, but I just did my brackets in March for March Madness on Yahoo or I still have a Yahoo mail account. Search is the one that has not been a, you know, a choice people have been making. We're ranked third every month in search, but it's mostly because are already in our network, which is huge. And then they use search. So that's one where we've kind of been absent, not on the playing field, but for all those other brands. We're actually a preferred brand. And if you look at the overall Yahoo brand awareness, we are right there with like Rolex and Heineken and New Balance and we're ahead of Airbnb and others. And. And so after all these years, and that was before I think our awesome team really started improving these products about two, two and a half years ago for this new generation. So, you know, I hate to sound cheesy about it, but it really is like our best days are ahead of us.
- [09:33]
Ann Berry
That's great fromage.
- [09:34]
Jim Lanzone
I love what we're doing.
- [09:35]
Ann Berry
That's great. Talk to us about Scout. Talk to us about that AI sort of infusion that you're bringing to Yahoo.
- [09:41]
Jim Lanzone
Yeah. So since 2009, Yahoo has outsourced search to Microsoft and we are still great partners with them. That partnership will last a long time after this, both on the index search side and on ads. But search is changing and we all know it from our own usage. And AI has really changed that game with Chatbots. And whether it's AI mode in Google or whether you're going directly to ChatGPT or Claude, it's different now. So we have to improve search just for the people already using Yahoo Search. But when you looked at it for an answer engine, which is a very different animal than index 10 blue links search, we really say, okay, what's the best way to bring that to Yahoo? And we looked around at it and we decided about a year ago that the best company to build that for Yahoo was Yahoo. Because only Yahoo has this goldmine of data. User data usage data, 30 plus years of search history, our vertical publisher relationships that go back 20 plus years where we have been sending traffic to them and sharing revenue. We still do that today. So all these amazing assets that only Yahoo has. And so if you could apply AI search technology to that data, you can, you'd have a very original product. And at the same time, you didn't have to build a large language model. You could actually work with the large language model on our data to produce very unique value, added, I think, to the industry results and have an awesome AI search engine for all Yahoo users. So that was about a year ago. We actually then wound up acquiring a company and getting started building. About last summer and January 27th, we launched Yahoo Scout@scout.com, and it also has, besides being a really highly effective, effective set of results, it also has this really rich differentiated UI that I think everybody has loved. We got a lot of good reviews for the product when we launched and it has a little dash of that irreverent, kind of whimsical Yahoo personality that I think has been lacking, frankly in the category. They kind of all look the same. They kind of try to impersonate humans in a very like stark chatbot ui. Yahoo Scout is very different from that.
- [11:48]
Ann Berry
Yeah, make search and AI enable search fun again was sort of what I thought about.
- [11:52]
Jim Lanzone
Yeah. And I think extremely useful. If people start to try it and add it to their portfolio of, of AI search products, I think people will Love it.
- [11:59]
Ann Berry
More of my conversation with Jim Lanzon in just a moment.
- [12:02]
Jim Lanzone
K Pop Demon Hunters, Haja Boys Breakfast
- [12:04]
Ann Berry
Meal and Hunt Trick's meal have just dropped at McDonald's.
- [12:07]
Jim Lanzone
They're calling this a battle for the fans.
- [12:09]
Ann Berry
What do you say to that, Rumi?
- [12:11]
Verizon Advertiser
It's not a battle. So glad the Saja Boys could take
- [12:14]
Ann Berry
breakfast and give our meal the rest of the day.
- [12:16]
Jim Lanzone
It is an honor to share. No, it's our honor. It is our larger honor.
- [12:21]
Ann Berry
No, really, stop.
- [12:23]
Jim Lanzone
You can really feel the respect in this battle. Pick a meal to pick a side and participate in McDonald's while supplies last. Don't let tax refund worries hold you back file now with TurboTax on Intuit credit Karma. They'll find every credit and deduction to help you get every refund dollar you deserve or your money back. Start filing today in the Credit Karma app.
- [12:48]
Ann Berry
And now back to my conversation with the CEO of Yahoo, Jim Lanzone. But you've partnered with Anthropic for Scout and so I guess a question for you. It's a cheeky question, but I'm going to ask it. The lesson that Yahoo learned was don't outsource search, right? Perhaps if you folks went back in time, they wouldn't have made that decision. Do you want to have your own large language model? So you're not outsourcing this piece of Scout effectively to Anthropic.
- [13:13]
Jim Lanzone
So a couple of things. So one is we are partnering with Anthropica, something different. So it's not Sonnet, which is the large language model that you'd be familiar with, maybe using, that competes with ChatGPT. It's actually a model that they have. It's a lightweight, cheap, fast model called Haiku, which is there. And ChatGPT used to have one called Nano that they don't really distribute anymore. But we partner with them. We could have partnered. There are others that we could have partnered with. And so we send them the context, we send them a payload of our data, plus we ground our data with Bing. So we're actually using Index Search, which is probably equally fair. Question about that's also valuable. But the thing with all of that, that is unique and most valuable is our data that we bring to it. So we send that in a payload to Haiku and brings it back to us to render in this UI that we have. So actually, I'm not saying they're generic, they're very valuable. But it's different than outsourcing to a large language model. We're more like Using their technology to help us produce the best engine possible. But we also do that with index search as well.
- [14:23]
Ann Berry
And so when you think about where Scout's going to go, what's the ultimate vision for it? I signed up for it. I have a Yahoo email account again as a result of that. But a year from now, what does success mean for you?
- [14:36]
Jim Lanzone
So by the way, one thing is you. I think like with any of these things, it's great you signed up for reasons I'll explain you don't have to. You can use it for free and you can come there before signing up. If you sign up, just like with any of them, we'll remember you and we'll remember the results and have memory. The other thing is that if you are a dedicated Yahoo user and we have 700 million of them a month, that's amazing. So even if we don't acquire any new users and we just distribute Scout to the people we already have, some interesting things happen. So we're just in beta. We launched less than two, two months ago. But some of the next steps will be down the personalization pathway. So these results will start to get very customized to you individually. And then just last week we actually launched, if you remember, you know, Yahoo was very well known for being a portal back in the day and they had Myyahoo, which is the personalized portal. Well, we just launched my Scout, so we actually had to retire my Yahoo, but. But we have now replaced it with my Scout, which automatically produces a personalized portal just for you. So if you're already a Yahoo user, it will start to feed in your Yahoo Finance stocks, your sports scores, highlights from your email, your headlines, all that stuff will get automatically populated and then super cool. And we're the first people to do this. Just by prompting Scout, it can create automatic on the fly categories for your personal portal. So while we were testing, my favor was I asked it to update me on every new gold medal winner during the Winter Olympics.
- [16:02]
Ann Berry
Aging the Olympics. Yeah.
- [16:03]
Jim Lanzone
So I just got a running tally. You can do that for any topic. And so that personalization pathway is next. And then what I would say is beyond that, all of your viewers and listeners have been probably hearing a lot about agents. And I'd say this proactive aspect of AI search is next, where you are commanding the engine to start to push things back to you or to go take actions for you. And so I think over the next year that's a lot of what the roadmap will show.
- [16:33]
Ann Berry
Let's talk about this taking action piece of it. Because when I look at some of the moves that you have made since taking over at Yahoo, it feels as though there's been a real shift from providing content that I can passively consume to real time engagement. Whether that's engaging with Coinbase, buying crypto, you know, led through on the Yahoo Finance platform, whether that's on your Yahoo Sports and being able to place bets. Talk to me about that and moving deeper and deeper into personalized engagement when you've got something like a scout.
- [17:03]
Jim Lanzone
So one of the things that we realized about the company when we starting out is if again you go back to the OG aspect, we're the original guide to the Internet. That really is what the company was founded to do. It wound up doing all kinds of different things, but we kind of took the company back to that. If you are the guide, then you aren't always the producer of original content yourselves. You're an aggregator. Where we do create content, we actually have shifted. Now this is part of us selling other brands to being providing context around the things you're trying to accomplish rather than being the source of breaking news. Other people can handle that part of it. And so we really do think about the handoff for that goal you're trying to accomplish no matter how big or small. It could be trying to make, you know, some money on stocks, it could be trying to win a bet or beat your friends at fantasy, or it could be planning a trip, you know, to see the Taj Mahal. It doesn't matter what it is, our job is to really reduce friction and make that happen for you in whatever category that we're operating in. So yes, that is true. We partner with Coinbase and polymarket and we have a lot of others, we do that directly with a lot of our properties. And so I think whether it's finance or sports or news or mail, we've actually gone really deep on this. In fact, just yesterday we launched a product called Planner for all the hundreds of millions of Yahoo Mail users where it actually analyzes your email and extracts next step, you know, actions that you need to take could be for your kids school, it could be for a trip, it will take that out and actually automatically add it to your calendar, add it to your to do lists and using Scout AI technology, it understands that. And so that really is the future of all of this.
- [18:43]
Ann Berry
So when I think about the quantities of data that you're collecting, you've done that a lot in the past, you've got this repository now. It's how you're able to use scouts. But the amount of data you're going to collect from this point forwards is going to be enormous. How does that feed in to your ad tech operations?
- [19:02]
Jim Lanzone
It's the most important part of it. Everybody can produce technology, but not everybody has this goldmine of data that goes back decades, but in any given day that we're producing to understand on a clustered basis our user base. And it's interesting because that on the one hand it creates highly effective performance at scale for advertisers on Yahoo proper. And I mean at an extremely rare altitude. Like not many companies have this many users and this surface area, this number of surface areas to distribute ads on our proprietary sites. But also with our dsp, you can actually then take that data and you can target off of Yahoo. So we are partnered with, you know, Netflix inventory is in the Yahoo dsp, Spotify inventory is in the dsp. Tons of ctv, you know, video inventory is in there. And we show, we find that we convert 90% of the time we beat our competitors on that side in head to head tests in creating outcomes for advertisers. And the reason it does that is purely because of the data.
- [20:05]
Ann Berry
And the more I listen to you describe the business, where it's going, the tech stack that you've built into and around it, I can't help but think of Yahoo as almost the equivalent of a super app, except as a portal. So is that a strange way to think about it? Is there a super app element to this? And just based on the data you're getting, the surface area you've described, it seems like there are tons of different ways you could continue to extend and provide service and value to the millions and millions of users that you've built over time.
- [20:34]
Jim Lanzone
Well, it's interesting internationally that is a very apt question because in other countries super apps have taken off. We are a super portfolio of connected brands. We do have an ecosystem. The average user, first of all is logged in. 70 to 75% of our users are logged in. That average person uses two or more properties of ours per day. So within the Yahoo network there is a super app thing happening. But it's interesting across the industry in the United States, you haven't seen that really happen before. Right? It's not like you're using WhatsApp and Instagram together. It's not like, you know, maybe YouTube is distributed through Google, but they've been pretty few and far between. So in its own way, if you go to the Yahoo app, we do have that, but you're right. I don't, I don't think people have thought of it that way.
- [21:20]
Ann Berry
Well, and Elon Musk wants to change this.
- [21:22]
Jim Lanzone
X is everybody has chatgpt just announced they want to do. Yeah, you know, and, and just think because you know, we talked about private equity and Apollo, you know, we, we acquired yahoo for only $5 billion. Everybody that we are competing with is in the hundreds of billions or trillions and that is our daily existence is going head to head with all of them.
- [21:44]
Ann Berry
So who are you competing with? Because if you look at how the world's changed, you've got Google saying in its antitrust suit that its competition includes the LLMs. You've got Ted Sarando saying Netflix is definitely competing against TikTok. It's not Cat videos anymore.
- [21:59]
Jim Lanzone
Not sleep. Not a lot of sleep.
- [22:01]
Ann Berry
Right. So who would you define as your
- [22:03]
Jim Lanzone
core competitors category by category? So that's, that's the interesting thing and I don't think we're alone in this, but Yahoo Mail competes Gmail and Outlook and, but mostly Gmail because we focus on personal search. We talked about that playing field is still relatively small for those who not very many own an AI search engine the way we now do. But you know, there's a number of competitors there. Yahoo Sports, it's obviously, you know, ESPN is probably the biggest one. Yahoo Finance, maybe it's, it's Bloomberg and others. So every one of our properties has their own. Which is why one of the first things I did when I took over was restructure the company to have general managers who are experts and accomplished in each one of these verticals take over and we really put the power with them. We don't look for max efficiency. We actually look to let them own the last mile to the customer. They have their own engineering teams, product teams, design teams, content teams. And we let them compete and in center, in central. Our job is to provide them leverage and some centers of excellence for certain things like finance and HR and legal. But mostly what Yahoo is every day for the people who work here is competing vertical by vertical.
- [23:16]
Ann Berry
That's interesting because what you've just described is infusing an entrepreneurial spirit and pace and agility.
- [23:22]
Jim Lanzone
I've started two companies, sold one to CBS. Every one of my GMs are COO, Matt Sanchez. We've all been entrepreneurs before, every one of us.
- [23:32]
Ann Berry
And how have they adapted to being in a big place, albeit with the cultural freedom to do what you've described? But do they look at you and say, really, I'm going to join this big platform.
- [23:40]
Jim Lanzone
No, I mean I think Yahoo is past that. I think what you need to have to come here is some pluck. You have to, you have to not chip in your shoulder necessarily, but want to see this thing succeed. So for Ryan Spoon, who runs sports and now finance, he was an entrepreneur. He also ran product at ESPN for eight years. So he had Disney experience and big company experience. But he wants to put Yahoo Sports back on the map. It was his original love in the category. If you go vertical by vertical, that is how the team thinks about it. Eric Fang, who is the creator of Yahoo Scout and the head of our search group. Eric. We bought his startup last summer, but his way back in the day he helped start Bing for Microsoft and he turned down the job running Yahoo Search. Jerry Yang.
- [24:26]
Ann Berry
Oh, interesting.
- [24:27]
Jim Lanzone
Yang offered him the job. He had to turn it down. The reason is because he had already co founded Hulu. So he was the head of technology and product at Hulu at that time. So, so yeah, I think all of us have a combination now of big company experience. I've worked in public companies a long time, even though I started two companies. So it's, it's like a mix, you know, between the two.
- [24:48]
Ann Berry
Let's talk about sports before I, I come back to news. When you take a look at how the digitally native platforms are leaning into making their mark on the sports world. They've got big budgets, they're throwing a lot of money at it, streaming rights and so forth. Do you have a budget intensive plan to grow into sports?
- [25:06]
Jim Lanzone
It's in a way the opposite because when we started we had, we had rights deals, streaming NFL games, NBA games, losing tens of millions of dollars a year. Part of that was because of Verizon. Verizon did a lot of that and they could afford it. They were think of Fortune 10 company. But when you're standalone you can't really do that. It's also not the strength of where Yahoo Sports gets its relevance from, which is really started in fantasy. It started in sports scores. More on the data side than on the streaming side. Interestingly, we now do 60 hours a week of original programming and video and podcasting. We have the number one NBA podcast. We have all kinds of great podcasts and streaming shows both on sports and finance. But it's a little bit an interesting lens. We do it again not where we're going to be the hub for viewing. We're not competing with Fox and NBC and ESPN for streaming. And with that really goes, you know, it's not as expensive to do it that way. And the value we provide for the world is our distribution. We really are extremely relevant to every sports league, every sports enthusiast, with what we're good at, which is the data, the community and the games.
- [26:22]
Ann Berry
That awareness of where your strength lies, which is distribution as opposed to original programming, is an observation and has informed your strategy, too. On the news side, and I've read articles, you've been interviewed, and you made the decision to shut down a lot of the breaking newsrooms at Yahoo. Talk about that, if you don't mind, and explain the economics of running a newsroom versus the aggregation model that you sort of leaned back into.
- [26:46]
Jim Lanzone
Yeah, what I would say is I'll go back to Apollo. They've realized, I think they have a tiger by the tail here a bit. We returned the capital really quickly.
- [26:55]
Ann Berry
Really quickly. I remember this.
- [26:56]
Jim Lanzone
And so it's a lot, really. We're playing for upside with this thing, and I think we've been successful. There's a lot of reasons to invest. So it wasn't a cost decision directly as much as a focused decision, Especially if you're taking over a transformation turnaround project. You do have to focus. You can't do everything. Just even if you could afford it, you really can't do everything. So we kind of had to redefine what the spine of the book was. For us, that was proprietary data sets, aggregation and especially in news. And then where can we add value with content? And again, there's still 60 hours a week in both sports and finance on original content to help provide that context. But we didn't need to be competing with the Associated Press. We're not going to have boots on the ground in the Middle east reporting back. A lot of people do hundreds of companies do that and are great at that. And our job is to send them traffic and partner with them. And this publisher relationship is extremely important to the future of our company and I think extremely important to the future of the Internet, especially with the direction that these AI chatbots have taken, where the first generation has essentially digested all of that content from publishers around the Internet and is saying no traffic back. They're not linking out. And so publishers won't be around to exist to provide the content to AI chatbots or answer engines like us if we don't figure out a way to send them traffic so that they can have healthy businesses. And we do that in search now. And we also do that with our publisher relationships on Yahoo.com and Yahoo search.
- [28:40]
Ann Berry
Can I just sort of lean into this. And this is less a Yahoo question, but just more from your vantage point, Jim, of having so much experience in and around the news world and media at large. I worry for the state of breaking news, I worry for the state of journalism. I worry about finding sources of truth. And what you've described is a smart commercial decision, right. Keep your publishing partners alive because it, it fuels what you're delivering. Do others in your industry though, in the seat that you're in, have that perspective? And I don't mean a sort of civic duty. Is everyone else seeing that it's commercially necessary to keep these kinds of sources of news alive?
- [29:14]
Jim Lanzone
Yeah, look, I mean, if you back up to us being the og, right, you would more cluster us with the Googles and Facebooks and, you know, of the world rather than pbs, CBS News, the Associated Press. That's not really where the Yahoo brand historically existed. I think by being, by virtue of being an aggregator and being the homepage of the Internet, a nice place to stay on the Internet, it kind of drifted in that way. But that's not really where the Yahoo brand would live. Now there are an incredible number of sources globally, right? We could just name all of them. Cnn, BBC, the Economist.
- [29:52]
Ann Berry
But struggling to make money, many of them struggling to hit their profit targets.
- [29:57]
Jim Lanzone
I think that transition has been 20 years in the making. It's now true of just, you know, movies and television, you know, broadcast television shows. I mean, everybody is having to adapt to this new world. I ran cbsnews.com you know, for about nine years and we were partnered with, you know, with CBS News. And so I had a first, first hand view of like what it really takes to do that and the dedication that those teams had on the ground. Not biased, just trying to report the news, you know, on the ground. Holly Williams on the ground in Syria. I mean, these people are out there to try to find the facts, find the truth. And yeah, I understand the question in terms of that transition, which is one reason why what we have really tried to do on Yahoo.com, because everybody has a different political persuasion on that vertical category. People don't have that issue on sports or finance or food critics or other kind of entertainment news, but on politics and current events, they do. So we have taken a really hard eye to our algorithms and trying to make sure that we are purple like Yahoo is the color purple. People can drift into their echo chambers a bit over time. We'll always try to pull it back somewhat, but we're partnered with sources on both Sides, we get feedback from people on both sides about what we're showing. And it is noisy out there. I think with AI and AI slop and not being able to trust a source. Now we have a whole nother job to do as the trusted guy. Like we have to validate, you know, this stuff. So it's, it is complicated, it's, it's rough. But it's got to start with this. For the digital arms of these publications and these brands, they have to get traffic. I think only 20% of brands surveyed thought that they could make a sufficient living licensing their content to large language models. Right. They know that they have to get their traffic to them because even subscriptions are just a percentage of your overall user base. So you have to get that free traffic in. For three decades now, the social contract of the Internet was that search engines would send you traffic, they would take in a snippet of your content and a link and then they would send you the traffic downstream. And we are extremely passionate and that is a huge part of Yahoo Scout. In our UI are tons of blue links that directly link straight to those publishers and are great sources of truth for users to be able to see. Like, you know, what is this? You know, who said this? You know, how can I trust this information? So I think that's important.
- [32:35]
Ann Berry
So my last question for you, Jim Apollo won't own you forever. That's not what they do. It's not what private equity does. And I think about the typical private equity ownership horizon. You're soon going to be coming up on that typical five to seven years of private equity ownership before funds tend to look for an exit. So where do you think an ex, what do you think an exit looks like? Are you going to be an IPO candidate? Do you become an ag, you know, do you become an M and a machine and perhaps then go public? What's the vision?
- [33:04]
Jim Lanzone
Well, I'd say you probably know private equity better than me in here. So I, I'm a first timer. I, I do understand that window and I think our job for our team is to make that this decision really hard for everybody. If we can keep growing and focused on user growth, revenue growth, profit growth, and in our strategic relevance and you know, the word moat is being overused, but to the extent we have them, you know, just be a really resilient company for like the next 30 years, then good things are going to happen. I think, I think we will be very in demand for people who would want to take us in house. And then you know, look, I've been in public several public companies. You know, you don't, it's been good to be private, be able to make these, these changes privately. But our job is to make it really strong so that if you go public, you're a strong public company, you know, you understand what the future is going to look like. So we're, you know, I think we're taking advantage of this time, you know, to get the company in the right position for either one.
- [34:07]
Ann Berry
The thing that's amazing is when I look at some of the potential suitors with big, big checkbooks, they're quite different now. I mean, it's completely plausible that Open Ia, OpenAI, excuse me, would turn up and say, let's get somebody like Ayahu who's got an amazing amount of data. I mean, is that conceivable?
- [34:26]
Jim Lanzone
I mean, it wouldn't just be them. I think there's a lot of people like that who would be very smart to try to do that. And again, I'll say that our job is to make even that decision hard on our board.
- [34:38]
Ann Berry
There you go.
- [34:41]
Jim Lanzone
So hopefully we just keep growing and building. That's what we're focused on.
- [34:47]
Ann Berry
Well, congratulations, Jim. It's been an extraordinary story, as you said, returning all that original investment as quickly as you did. So everything now is upside is amazing. And just the creativity that you've infused back into Yahoo.
- [34:58]
Jim Lanzone
I appreciate it. Thanks for having me.
- [34:59]
Ann Berry
Thank you. Well, huge thanks to Jim Lanzone for joining me. What a great conversation and what a lot going on over there at yahoo. Well, it's 4pm on the east Coast. There it is, the closing bell. The market's wrapping up for the day. You don't have a ticker tape. Instead, we're going to throw it over to our human ticker, our producer John.
- [35:16]
John Croteau
The markets fluctuated throughout the day as Trump's deadline for Iran approaches. The dow finishing down two tenths of a percent and the NASDAQ and S P500 both ending the day up a tenth of a percent. And about that S P500, we talked in depth a few weeks ago about Casey's general store ticker C A, S Y and how the chain of gas station convenience Marts is the fourth largest holder of liquor licenses in the U.S. behind Walmart, CVS and Walgreens. Well, it's been reported that starting Thursday, Casey's will replace medical technology company Hologic in the S&P 500. Shares in Casey's finished, down nearly 1%. Today. Some of the market headlines, shares of Universal Music Group jumped in Amsterdam after Bill Ackman's Pershing Square Capital disclosed it had made a nearly $63 billion bid for the record label. UMG is the world's largest music company, counting Lady Gaga and Taylor Swift among its top talent. The company has also lost more than a third of its stock value in the last two years, and Ackman has argued that the business is undervalued. UMG will form a newly merged company with Pershing Square and shift its primary stock listing to the New York Stock Exchange from Amsterdam. The deal is expected to close by the end of the year. And finally, as expected, Delta Air Lines ticker Dal became the latest carrier to raise its fees for check luggage as the industry grapples with rising jet fuel prices brought on by the Iran war. This after JetBlue and United Airlines made similar moves last week. Airline stocks were down across the board today, with Delta finishing down nearly 2%, with earnings from the company expected out tomorrow.
- [36:49]
Ann Berry
That's it for today's Brew Markets Daily.
- [36:51]
John Croteau
Brew Markets Daily is hosted by Anne Barry and produced by John Croteau, Tarkab Delatif, Avani Laroya and Emily Milian. Our technical director is Uchena Waoghu. Brittany Dotaku is our audio engineer and booking by AB Silver. The President of Morning Brew Inc. Is Devin Emery.
- [37:05]
Ann Berry
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place.
- [37:21]
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