Jim Lanzone (5:18)

Great to be here.

Nilay Patel (5:19)

I'm excited to talk to you. My personal story is wrapped up in the thing that is now Yahoo that you operate. I once worked for aol, which got smashed into Yahoo and a series of acquisitions. I know you are thinking a lot about what Yahoo is today and the future of the web and its relationship to the larger networks that we all operate on. So I think there's a lot to unpack there. I do want to start with my personal history at Yahoo, because I got my start in tech journalism at Engadget at $12 a post when I was owned by AOL. This is a very odd time in media that that was a thing you could do. And just last week you announced that you are selling Engadget to a thing called static media. Take me inside that decision to sell Engadget. You just sold TechCrunch. What's going on here?

Jim Lanzone (6:06)

Really, it was the last non Yahoo brand to be sold. You know, we've been in the process since we were spun out of Verizon in September of 20, you know, really rationalizing the portfolio and what makes sense going forward. You know, I'm sure we'll talk about it, but that goes all the way back to, you know, why are we still here after all these years? What's our right to exist? What's our right to win? And really the long story short of that is it went back to the original mission of the company being the trusted guide to the Internet. In 1995, that meant helping you find websites. In 2026, it can mean all kinds of different things, but that's where we're strong. That's where we are still strong. After all the things the company went through over the years, you know, when we got here, there were still just a lot of things going on. We had a content delivery network business. We, you know, the company had, you know, I think drifted very far into all kinds of media and away from its history as, as more of an aggregator and way, you know, place to help you find where to go for that media. But between, you know, TechCrunch rivals, which we sold, and Gadget and you know, a lot of other small properties ultimately also AOL we sold, you know, back in Q4. So, you know, on the one hand it's about focus and on the other hand when it comes to properties like TechCrunch and Gadget, you know, really if you think about what we do while we do media, it's really to provide context for the products that we're operating in those categories. We're not the place to go for breaking news. We're not the place to do that. And that, that's why, you know, Engadget and TechCrunch found homes with, in both cases Famil brands that were either tech focused or media focused and really do that kind of journalism, which is really not what Yahoo does.

Nilay Patel (7:53)

I want to dig into that just one turn. I think we're not the place for breaking news that has a different valence. We can talk about that in the

Jim Lanzone (8:01)

context of sports producing that or enterprising that news versus being the aggregator for other people who are doing it.

Nilay Patel (8:08)

So that's the other piece that I'm really curious about. Yahoo bought Artifact, which was a really great AI powered news app that was started by the founders of Instagram. I've talked to Mike Krieger and Kevin Cistro about that over the years. You know, one of the reasons I got out of that business and sold it to Yahoo was they were like, there isn't enough web to aggregate anymore.

Jim Lanzone (8:26)

Right.

Nilay Patel (8:27)

Like news on the web is a declining thing and actually all the action is on social and as artifact, we had no access to all of the other platforms on social. Yahoo is an aggregator, right? I, I've heard you say that before. Is what you're saying now. Like the value here is bringing everything together and providing audience. Are you running out of web to aggregate? Because this is to me the defining problem of our moment right now.

Jim Lanzone (8:48)

We're particularly passionate about that and I'm sure we'll talk about our search engine that we launched. But that's, that's a big part of the thesis behind that as well. Or a core value of that product is, is publishers in the open web and doing right by them. But you know, I actually think that their biggest issue with Artifact was running into the challenge a lot of people have, which is audience. It's really hard, especially in news, to build an audience of scale in 2024 when we bought Artifact or today. And so it was a very small user base for a very awesome product. So in fact, Artifact was our admission that what we inherited was probably not the best foot forward for being a great product in that space. We were all fans of Artifact. I was, personally. Usually when you make an acquisition like that, you kind of mung them into the Borg, into the mothership. We, the opposite. We actually just put the Yahoo logo on the Artifact app and started from there and just admit, you know, admitted it. So, yeah, I think, look, that is still one of the things that Yahoo does best is we. We are very large, we have a massive audience, and we can, you know, turn that fire hose on. Great products if we build them. That's part of our thesis for how we would grow, grow this business, which admittedly is, you know, is a. Is a big turn, you know, has been a big turnaround.

Nilay Patel (10:09)

This is well before your time. When we started The Verge In 2011, our first big syndication deal was with Yahoo. And our first major traffic fire hose was the Yahoo.com homepage. And I would sit around trying to figure out what stories would get placed there, and I had all these conversations, and basically the answer is, you're never going to know. So then we did all this data analysis and we found out that the Yahoo algorithm loves stories about fish. I'm not kidding. It was literally fish, I believe. And we would. On Fridays, because I'm from Wisconsin, we would have Fish Fridays at the Verge, and we would literally search for fish technology stories and collect all this Yahoo traffic. And this probably has more impact on my thinking about how to run a media property even now in 2026. Like, you shouldn't do that, right? Like, yeah, the Verge is shockingly about fish. Under. Under it all, it's really just about fish. No, it was. If I play to this algorithm, eventually it will go away. Like, this cannot be sustainable. And so we have to build something that's sustainable on terms of. And collect all the algorithmic traffic along the way. And I think I'm. I'm still right. That's still my worldview that we can chase SEO, but SEO is going away for people. We could chase whatever Instagram trend and switch from stories to reels back to the carousel, whatever Adam and Sarah wants us to do. But that's unsustainable. And I. I'm asking this question on aggregators and selling the newsrooms to you, because I'm wondering if Yahoo as an aggregator of audience, can be sustainable for those newsrooms. Because the thing that I'm seeing is Google as a source of traffic is going away. Twitter or X doesn't Send links to anyone anymore as a source of traffic, it's going away. The referral to the newsrooms is in decline. And then you just look at the state of the universe. The tech media is in decline, media is in decline, newspapers are getting shut down. And I'm wondering if that position is an aggregator. You think about that dynamic, right? We, if we, if we're not sustainable, we will not actually have enough stuff to aggregate.

Jim Lanzone (12:07)

Look, Yahoo has clearly gotten something out of being the aggregator over the years. So I'm not saying it's completely selfless, but, you know, it's, it's going all the way back to the beginning. Yahoo's role was to help people find websites, right? And then apps and then stories over the years. But we, we have taken that really seriously here, that, that we, you know, it's our job to help send traffic downstream, help you build that brand. We're in the same spot. I mean, we, we have SEO and we, you know, we definitely are, you know, in the same position. And then thankfully, over 70% of our visits are direct. We've built that side of the business. So I understand what you're saying, and I do think it's under threat. I think that the LLMs are one big reason that they're under threat and AI mode and Google being the biggest challenge. And look, it's probably pie in the sky, but I have some history in search and have seen this happen before with some things that my team built. I'm okay if the industry copies some of the things that we just did with Yahoo Scout, where we have very purposefully highlighted and linked very explicitly and bent over backwards to try to send more traffic downstream to the people who created the content that was digested by the LLMs, you know, to create the answers that they've been giving with chatbots. Ours looks a lot more like traditional search. It is more paragraph driven. It's not a chatbot that's trying to act like it's a person and be your friend. And I actually thought that Claude ad, besides the issue of ads, which we can also talk about, you know, even for Claude, I mean, kind of that creepy, you know, interface with the chatbot. We don't do that, but we do explicitly link a lot to publishers. And we're hoping that not just for us, but for other engines in the future that that becomes more of the user interface for these things. Those publishers deserve it. And we're not going to have the content to consume to give great answers if publishers aren't healthy. I really actually think Google would have wound up with that interface, one much more similar to what we did if they'd been first out of the gate. I think once ChatGPT beat them to market, however that happened, they kind of had to play catch up at that point, you know, to avoid, you know, people bleeding out over, over to ChatGPT. So I empathize with why they did it, but I actually don't. I'm hoping that's not where the industry winds up.

Nilay Patel (14:33)

You can see Google is walking a complicated line now with their publisher relationships with how many links are in their results, how they integrate advertising. On the same token, you can see ChatGPT and OpenAI are walking a complicated line line as well. Right. Like they, they haven't quite figured out their advertising experience.

Jim Lanzone (14:51)

Yeah, but they, but they wound up there. I, I think not by accident, but if you think about they were built by researchers, you know, and so of course the first user interface had a bunch of citations. It looked like somebody you know at university had, had written a research paper. And I think that we backed into that by accident, that being the interface for what this should look like. But that's not how it has to look and how and operate in order to give great answers. I think we can do more to send traffic downstream and we've tried to do that and I think it's still early and so maybe that'll wind up in more of the products. It certainly needs to for advertising to work.

Nilay Patel (15:25)

Yeah, I think that's my other question here. I know you've done a lot on the advertising side of the business. You've sold off some pieces, you've rethought some other pieces. I want to come to that. But let me just ask about that dynamic of sending traffic downstream. That's not what any of your competitors are doing. They're holding more and more traffic within their walled gardens. They're creating more and more formats. They're all converging on being scrolling video. You can just see it. Right. There's every. Everything turns into a crab in the end. Right. With conversion evolution, you haven't quite done that. There's bits and bobs of it on Yahoo Properties but you haven't fully taken. Okay, we're going to wall this garden off. We'll buy the content, we'll put it here. It's all one experience and then we can change it however we want. You seem committed to sending traffic downstream. Where does that come from? Is that just a personally held belief? Is that idealistic or is there a business reason for that as well.

Jim Lanzone (16:12)

I think it can be all of the above in this case. So I do get the question. We could be just being Pollyanna about it or think it's a differentiator or whatever, but we actually think being able to check the sources, first of all, we think people want to go downstream to the publishers. Second, we think actually being able to check the sources or follow up to go get more information is an extremely high user need. So I actually think it's core to the user need in search, which is really where we are playing. We're not a large language model. We're not going to be the place you come to code. We're really an answer engine is how we've launched Scout. Part of that is the traditional role of a search engine. It's also how we're launching is integrated into our search engine experience. So it is more similar to that from the get go, but it is also a core value of our products for sure. I mean we've had to do a lot of rethinking. I mean the Yahoo homepage that we inherited in 2021 had over the years drifted towards being a more kind of clickbait newsfeed and away from being a portal. And I have a lot of empathy for how that happened. We could dig all the way into the history of the company. I think it goes all the way back to the original sin of giving search to Google, which is what happened is a misnomer that it was beaten by Google. Yahoo didn't even do search, they did an enterprise. It would almost be like if Google today on every search results page linked to ChatGPT with a logo for ChatGPT and paid ChatGPT for the privilege. That's what Yahoo gave to Google in June of 2000. But from that point forward it was a struggling company against the trends at Google and then Facebook and then as a struggling public company, it was just hard to make the right choices. But during that time it drifted from the portal experience, which I think a lot of people really valued, just probably not as many as value Google. And so there was a lot of fog of war there. But by the time we picked it up it was really this newsfeed. And we've, we have identified that we think people want more utility in our homepage. They can go downstream to news or to sports or finance, but in that place. And so it is more of an aggregator. That is also one reason why you will see short form video because that actually has become a valid way to consume News and information. But we think that aggregation is something people really want from us. And to do that, well, we're not going to be the ones creating all the content ourselves. And, and so to do that we have to partner with publishers and send them traffic. And I do think personally that, you know, the content that went in the original large language models, they did not ask permission. Even today, I mean, you know, everybody still needs Google to get out there. And so you can send, you can, you can ask people to stop crawling. You, you can, you know, you can send a cease and desist, but it's like very hard to prevent it. But that original version of each large language model, it was just taken. And yeah, I think that was wrong.

Nilay Patel (19:16)

The reason I'm pushing on this so hard is one, I think it's refreshing to hear an aggregator talk about supply in this way. Like it doesn't happen very often. All of your biggest competitors, one, they've all pivoted to video in whatever way they've pivoted to video. But if you kind of look at the biggest aggregators and they look like social platforms, for the most part, they pay nothing for their content. Right. Instagram pays nothing to Instagram influencers. It's all brand deals up and down. X has whatever revenue sharing X is doing, but it's, it's so odd and it incentivizes such weird things that I don't think it counts for publishers. YouTube rates are falling. If you ask people who make YouTube shorts, they're not making enough money on YouTube. The dynamics of Google. Google never paid for the content. The original sin of the publishing business was Jonah Peretti's belief that he could go so viral with buzzfeed that Facebook would be forced to pay him money in some sort of like cable carriage deal situation that never came to pass. All of these publishers have hit the rocks in some way. They've all landed on the users will make us the stuff for free. Right? If you just kind of like broadly look at that in squint and they're all, all these companies are differently positioned. You compete in different ways. But you just look at it in squint and they're like, we should pay nothing because the users will make the videos for free. There's an army of teenagers who will show up here no matter what we do. And you're saying, no, we should pay some money for content from some of these newsroom because there's some user demand. How does that margin work out for you? Right? Where is everybody making money here?

Jim Lanzone (20:43)

Well, in our case, they're rev shares. So we're not writing a check to own the content. It really is our social contract. And remember, Search also had a social contract, which is you let us crawl and then we'll have a snippet and then we'll send you traffic. And in search, that is what we're trying to get back to and get the industry back to for the rest of Yahoo. I'd say the difference is that in every product you just named, publishers are creating bespoke content that is, you know, for that platform, a tweet, an Instagram post, a YouTube video in the hopes that you'll either aggregate audience there and then and, or, you know, they'll start to build brand to bring it back to your own property. In our case, it's, you know, you're consuming some of that content, you know, with your brand there, as you know from the fish days, and then it leads you downstream. So it's just a different model. And in our model, it is much more the content of the publisher versus you creating a product for me, which is really what everyone's doing, you know, everywhere else.

Nilay Patel (21:54)

Let me just bring this back to Engadget and TechCrunch for one more turn and then I want to talk about how, how you structured Yahoo, and in particular what you're doing in the advertising side, because I'm very curious there. Do you think as you exit the space where you run newsrooms and editorial teams that those cost structures are long for this world? Right? It can't just be Yahoo syndication deals that support all the newsrooms of, of the world. Right? There has to be some set of other monetization, some set of other revenue, some diversification. You are operating these businesses. You chose to be out of it. Is it just because you didn't see the business opportunity or is it you just didn't want to attack those problems?

Jim Lanzone (22:29)

Two answers. So one I'll come back to. It is I think that the content you're creating and the cost structure of that has to be congruent with the kind of advertising you're pulling in. So if it's all programmatic, you can't staff premium or produce premium. And I do think businesses along the way have gotten on the wrong side on their P and L because, because of that they've, they staff premium and you know, monetizes very low cpm. I think it's wrong to say that we're not in content because it's just the kind of content we're creating. So our Three pillars for product, you know, are superior aggregation, proprietary data sets, and what we kind of call anchors for context. So that really is content for context. So we're doing a lot of content in Sports. We're doing 60 hours a week now of original video. Same thing in finance. We've been building that muscle. We have the number one NBA podcast with Kevin o'. Connor. We have the number one MMA podcast with Ariel Helwani. We do a lot of, of content, but it is not breaking news content. When I got here, we had a White House correspondent we were sending. We were kind of competing with the Associated Press. And that is what we really wanted to get out of. And if you think about TechCrunch, it was like it said right there in the handle on Twitter, it was like, send us scoops. And they were breaking news sometimes about us, which is fair. But I remember they were doing that in Tim Armstrong's days as well. And that's great, but it's just not the kind of content were producing. You know, shams and sports and Woj before him in the NBA, like they started at Yahoo, you know, during that time period. And we, and we just thought, look, it's, it's. That news is going to break and very quickly it's going to be disseminated and you won't usually get credit for it on ESPN. They won't always say where, you know, it's SportsCenter, like where, where that news was broken. And then of course, then they wind up stealing those guys and paying them $10 million a year. So it's just like a game that we decided like, we, that's not what people are really coming to us for. It's really more to be the aggregator and then we can provide great context in sports and finance. It's also a little bit different in that not only are we aggregating, but we have products that are extremely important. Fantasy. We're one of the top two platforms in the original in fantasy and sports. And we have all these new fantasy games that we've been launching. And of course, in finance, we are the still the number one for tracking your portfolio and getting research and information about it. And so all of our, whether it's Brian Sauzi and his team on finance or it's KOC and that stuff on sports, we're providing context to the actions that you're going to be taking in those verticals.

Nilay Patel (25:16)

We have to take a quick break here. We'll be right back.

Jim Lanzone (25:22)

Foreign.

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Nilay Patel (29:52)

Welcome back. I'm talking to Jim Lanzone about the winding road that ended up with him being the CEO of Yahoo. This is a great spot for the decoder questions. I actually want to ask you this. You've been CEO for a minute now. Yahoo has been through all kinds of twists and turns. At one point it was squished into something with AOL at Verizon called Oath, which was deeply confusing. You became CEO after Apollo Global bought the company. It's a private equity firm. Very few people are ever going to think themselves I should be the CEO of Yahoo and then interview for that job. Walk me through that. What was the pitch? Did you make a deck? How did it work?

Jim Lanzone (30:30)

They bought it in May of 21. It closed in September of 21. And they talked to a lot of different people around the industry. People that you know, that I know about, you know, doing diligence on Yahoo and whether they should buy it. You know, I competed against Yahoo for at basically every stop of my career. I knew every executive team. I went head to head with them over the years, I always thought. But I'd partner with them on certain things over the years. I always thought it was the granddaddy of all turnarounds and I've been part of a few of them. I've just grown to love doing them. In my case, I wanted to run towards the fire. I was very much of the mind that if you could get it for the right Price that it was a great deal to do. Once that deal closed, the conversation immediately turned to whether I would be interested in running it, and I definitely was. So there was no, there's no pitch deck other than my advice and input along the way to buying it. And, and then over that summer, before they closed, it wound up being a negotiation of me coming on to run it. And, you know, I, I, I'd been at other companies where we had, we had thought to ourselves, like, oh, I wish we could take our executive team over there and compete with them with those assets. Let's see how that Olympic race goes. Like, we, we wanted to, to try that. And so look, it was almost 30 years in the making. I was getting at a very different time than if I'd gotten it in 2010 or 2005 or some other time, but the assets were still extremely strong. And yeah, I do also understand the part of your question, which is pe and do people in my position normally want to go do that? I've been an entrepreneur. I've started two companies. I've, I've worked for media moguls. I've done all kinds of things. And my view on that is just you always got to serve somebody, and it's your board, it's the public markets. It's a really hard boss, whoever it is. And I felt like Reed Raymond, who was the partner at Apollo, who did the deal, was really smart, really good guy, and that we would be really good partners, whether private equity was behind it or VC or anybody else.

Nilay Patel (32:36)

Well, actually, let me ask you about the sort of PE piece of it, because you're right that I'm very curious about that. Usually a PE firm buys a declining asset to just ride it on the way down. Everything you've talked about so far is growth, right? Have they provided sufficient capital to, like, reinvest in the business, or are you just moving money around through cuts and reallocations?

Jim Lanzone (32:56)

Two things. One is that they, they actually have been. In fact, I was in a meeting this morning where they were offering capital to do, to do big things that we, we were talking about.

Nilay Patel (33:04)

Does the ominous music play when the private equity firm offers you money?

Jim Lanzone (33:08)

No. If you met Reid, you wouldn't think about it like that. You wouldn't know we have a deal team that's not like that at all. And I don't know about it. No, they've really always wanted to kind of swing bigger. And I'd say in the early days, I mean, if you think, if you go back to when I started, it was still the heart of COVID and the crypto boom and stonks and there was one kind of boom period and then things dried up for a bit and then AI boom. And we've kind of gone through this. And so what we've looked at doing with that capital has been different. And we've wound up buying smaller things along the way instead of bigger things. But they've been very up for the bigger things and trying to make this a much bigger outcome along the way. We have tended to make our own fuel. I promise you there has not been one reduction here that hasn't been strategically decided by my team. We shut down two really big money losing ad tech parts of the company. That was all our team, you know, trying to, to do that. So we, we are, you know, I'd say profitable to very profitable and we don't need to make a dollar more than our budget to satisfy the, the PE gods. It's, it's agreed upon every year in our planning process. You know what that's going to be. And certainly when we made the changes to the revenue engine, it was a little dicey there for a year. That was the, you know, the Indiana Jones like replaced the gold situation. You know, they had to take a leap of faith with us on that. But, but yeah, we, we've not been through any PE driven cost reduction exercises or anything yet.

Nilay Patel (34:42)

I've seen a quote from Apollo saying Yahoo is the fastest return on investment that they've ever had. I know you're a private company. What is that return? Is it healthily profitable? Is it just a dollar more than they spent?

Jim Lanzone (34:53)

No, very profitable. And we, we look, we don't disclose revenue, but it's in the billions. That number has moved around as I've moved out. A lot of bad revenue with those tech companies that are driving a lot of top line but not a lot of bottom line. AOL was a lot of revenue and profit and that, that went out. But, but no, it is, it is in the billions of revenue. It is very profitable. It's not profitable by a dollar. I'll say for a company that really paid the price for being a struggling public company for a long time right into the teeth of some big competitors coming along to eat its lunch. It's been good to be private along the way, whether we're owned by PE or not, to be able to make a lot of these changes. But yeah, but it's in a very healthy spot financially.

Nilay Patel (35:37)

It does not sound like you ever sat down and opened up Google Docs and said, if I ran Yahoo and made a bullet list. But you've made a lot of decisions, including the decisions to exit some businesses. How do you make decisions? What's your framework?

Jim Lanzone (35:48)

Having watched your podcast for a long time, I knew that question was coming, and I just didn't want to come up with some bullshit answer. The answer is honestly, because I've heard and they sound like, you know, they're trying to write a chapter for Peter Drucker or something. I'm just not going to try and do that. I think if you've done this a long time and I'm the wrong CEO for enterprise software company, I'm the wrong CEO for a food company. But I've done consumer Internet my entire career. I've started them. I've taken over big ones. I've seen kind of everything you could see in this industry. And it's very easy to make decisions. I think it's harder to get the information for it. I think my team would tell you that, you know, I'm very quick to make decisions. I would rather they, you know, have done it themselves and we can talk about the org structure and why that is when, you know, I'm kind of the editor in chief myself for what happens here. The framework is definitely through the lens of our mission. You know, I don't have a set of, like, Enron values on their wall, like integrity that mean nothing. We have a view on that as well. So that's not really how it happens, but it really is through the lens of. Of why we're here, what we're trying to do, what our plan is for the year. My job, at the end of the day, is growth. You could dress it up any way you want. That is my job. I think that's the job of any CEO, even if you're a series A company. And so that lens for what we're trying to do is pretty easy, I'd say. And we know who we are and what we need to be, and we know what the spine of the book is and, you know, the pages that are kind of starting to come off of that as we go forward. And the first two years I was here, it was the transformation period. It was not only getting us through Covid and all of that and extracted from Verizon, we actually had to stand this company back up. We're not the same Yahoo. This is a new company that psjeri Yang invested in. He was one of our investors that we put the name Yahoo back on. So all the transformation work that happened the first couple of years got you to the point where you could earn the right to start improving the products again. Because at the end of the day, we are a product company and these things had to not suck, let alone get to be good. And now we're in, I'd say, the third phase, which is starting to take shots on goal. And so the decisions are always going to be different as I think you go through those phases.

Nilay Patel (38:08)

This is the other question. You've talked a lot about restructuring the company, getting rid of pieces you didn't need anymore. How is Yahoo structured today? And how did you land at the decisions that brought you to that structure?

Jim Lanzone (38:19)

So it is a conglomerate or portfolio structure. I backed into accidentally this structure years ago at another company. This is actually the fourth conglomerate I've been a part of, starting with iec, which bought Ask Jeeves back in the day.

Nilay Patel (38:34)

You have a thick skin, my friend.

Jim Lanzone (38:35)

Yeah. And in that case, it was 60 companies that had been brought together by acquisition, most of which had nothing to do with each other. And they went through a period of trying to turn it, with Jack Welch as the advisor, turn it into an operating company with a common backend. And that just didn't work because Ticketmaster had nothing to do with Ask, and Search had nothing to do with LendingTree or the catalog business. There were just so many different parts of IEC that just weren't similar. But in my CBS days, all the brands were consumer Internet companies. And at first, because I had been a product, I was always a product leader or founder. I was a pig in slop. I was like, oh, great, these 25 brands all get to report to me, including the fantasy. I started playing fantasy on Sportsline and, okay, I get to run that now. And within a year, it just became clear I was holding everything up. I couldn't have 25 direct reports. And so I organized them into groups that were similar, with general managers in charge of each business. That structure worked great. And we came to call that federal and state, that there were governors of every state that had their own economies, usually their own location, their own culture, and that that was fine. And at the federal level, you know, there's no reason to have two IRS or two femas. You know, we could across finance and legal and HR and some other things we'd.

Nilay Patel (40:03)

Can I. Can I just tell you, you're killing me. Do you know what Tim Armstrong's reorgan AOL was that basically inspired us to all leave and start the Verge. It was cities, towns, and he Put up a big sign over on Gadget that said Tech Town. And I was like, I gotta, I gotta get out. I can't be living in Techtown, dude. Like, I gotta, I gotta bail. But I understand the metaphor.

Jim Lanzone (40:21)

Well, it's funny too, because you say all that and that, that is the structure we had here. So I inherited this big matrix organization where nobody owned anything. There was one head of content across everything. There was one head of a product across everything. And it just. What you lose there is you don't have experts who are focused, who you hire them to be the CEO of their own business, and they want that. Every one of my general managers has an entrepreneurial background and usually a product background they want to run. And you got to let them run and be a little inefficient at the edges by having their own engineering teams, their own design teams, their own content teams. And then we will assign to them, you know, people in sales and marketing and PR who are experts at that area, but, you know, who roll up to a central person. And so that model worked amazingly well because you can get real efficiencies at the center and expertise at the center. While again, I don't think efficiency is the name of the game here. It's excellence and growth. And so you hire great people to do those things. And then I'm the editor in chief at the center of all those. And we do have patriotism across all the brands. It's a lot easier at Yahoo, where we have one, one central brand, but that's the structure. What I'll also say, though, is structure is not everything. And at these big companies, you could be this big matrix Borg, or you could be the GM model that we run. It always comes down to the people. And I honestly think that where you see problems, it's not just the structure, it's not just the culture that you inherited. It really is the people and what they're good at. If you don't hire real domain experts who have high EQ are really good teammates to each other and you know, you're going to wind up with a cesspool anyway or people who don't know which way to run. And I think our people are just awesome. And I think that was true at the last company. And that's why we succeeded in doing the turnaround and then got to the point where we could launch new products that were really groundbreaking. In that case, it was CBS All Access, which turned into Paramount plus here. You know, who would have thought Yahoo was going to launch an AI search engine. And you know, we have some other bets that we're making. So I do think the people are what it really comes down to at the end of the day.

Nilay Patel (42:33)

I know you have three divisions. It's news, sports and finance. Tell me about how they operate together. Right. Is it ever all three of those get to do whatever they want. And at the top you're saying actually we need an AI search engine that goes across these things or do they have harmonized product roadmaps? How does that work?

Jim Lanzone (42:48)

Well, believe it or not, those are not the division. So those are also divisions. So we have GMs on each of those. Some roll up to Matt Sanchez, our coo. So he has the home business, the search business, email, which is in many ways our most important historical business, and our DSP as well as monetization that goes across that loads up to Matt. Ryan Spoon runs what we call the Yahoo Media Group and that has today sports, finance. And then, and I've talked publicly that there's a third leg of the stool, which is we definitely probably have a right to go deeper into video in a nonfiction way across the verticals where we're strong. News Today rolls into the home business just because they were so intertwined. But theoretically it could be one or the other. And then again, every one of those businesses has a GM who really has the business plan, the P and L, the resources to run their business. And then sidebar to that, we'll have a CFO or the chief revenue officer with the sales team, et cetera. So that is how it's structured. If you were to talk internally, there actually is incredible harmony across those businesses. Yeah, they brawl sometimes over traffic from the homepage or something to do with the content management system or the monetization. But for the most part, I actually think you'd get pretty unanimous feelings about how we operate together. I think they would all sing from the same playbook. When people interview with us, they always comment about how everyone is kind of speaking off the same playbook. So yeah, I mean, I think we actually do have a pretty good working structure together.

Nilay Patel (44:32)

Talk to me about the monetization piece and I want to get into you invested in your demand side platform for ads. If I'm looking at news and sports, I would say, well, we're just going to do gambling now. Like that's the money. Like it's, it's.

Jim Lanzone (44:45)

Yeah.

Nilay Patel (44:46)

Like this is why when I say finance and sports are colliding. Right. The, the feeling that we're all just gambling seems to be infecting everything over there. You have a deal of polymarket and others but then you have this big investment in just what feels like traditional display advertising which is not an investment that other people are making at scale. Why are you still so invested there? Is that growing? Are you just holding serve? And then how do you think about well we should just do casino.

Jim Lanzone (45:12)

So the entire company we inherited was monetized through this group that was a three headed monster of native advertising. A supply side platform and a demand side platform. You had to buy all three and the Yahoo consumer businesses had to only get its revenue from that group. So if you think about the SSP we had, you know it was the Yahoo ssp. We couldn't go out and play the field on an auction from Trade Desk and from Google and from others. So that was part of the decision. There is we were leaving a lot of money on the table on our own consumer properties. The native ad business was just declining over time and something that was taking up a lot of resources. And so we did in one day we did this huge. That included an extension of our Microsoft partnership on search advertising which is another way we make money. We did all these things. So we extended Microsoft. We shut down the native business and we took 25% of Taboola and we outsourced it to them because it was a lot of money. We shut down the ssp. There were people who wanted to buy it but we didn't want to. We would have had to give them preferential treatment. We wanted to be able to play the field on yield on all of our pages. But the DSP was underinvested in but was the crown jewel. It was a place where we thought we had a right to win. The vast majority of the impressions through the DSP control center are not Yahoo. It's less than 10% and you can get anything through there. CTV, Netflix is in there, Spotify is in there. And the differentiator for it is something that's a differentiator for the whole company is when we inherited the company it was like we discovered oil underneath it which was this data gold mine of first party data. Due to these direct relationships, 75% of our DAUs are logged in. And so we really do know our users. You cluster that information and you either target on Yahoo proper or you take it to go across when you buy through the dsp. And we are incredible at conversion and outcomes. And that really is one of the why I think Yahoo is still a very underappreciated asset would be for anybody. We win nine out of ten head to head tests against people on the DSP side and again, I think on the Yahoo proper side it's even bigger. So yes, we are selling premium ads for March Madness and World cup on sports. Yes, we're doing partnerships with Polymarket and others. BETMGM has historically been the gambling partner for the last seven years. It was a deal Verizon did that's just coming up at the end of this month. Finally, polymarket was just to fill in the blanks of the markets where we didn't have that deal. So we'll see what the partnerships look like going forward. But the vast majority of our revenue is on the back of our premium properties, either through highly targeted advertising, subscriptions and then down funnel into search, which we should talk about search separately.

Nilay Patel (48:13)

But yeah, I just want to unpack the demand side piece of the puzzle. Right? This is where advertisers log in to buy ads and you can go address a bunch of stuff, whether that's display advertising on Yahoo. And then you're saying you can even get to Netflix. I think you have a deal with Netflix to help them sell their inventory because they stood up that business so fast. I'm legitimately curious about the formats you see growing there. Right. Is it display like everywhere else, like banners and boxes are in decline and all of the money is moving to influencer brand deals. I get consumer tech companies on the show all the time. The CEO of Shark Ninja was on the show and he's like, I built my business with influencers and we have this like massive data set of sentiment analysis from the influencers we work with to figure out what blender we should make next. And that is a crazy business that only exists because of influencer marketing that feels, you know, if you listen to the show, you think that's the future. And here you are saying the oil underneath Yahoo was this data set that lets us target across to other platforms. But is it targeting on Yahoo that's as valuable as being able to sell CTV on Netflix? Because that feels like the risk in this whole approach.

Jim Lanzone (49:18)

Yeah, look, it's going to be different for every advertiser. And I've worked in the streaming side of things. I had an ad business in that. And you're going to get premium CPMs for brand advertising. You're not trying to drive people downstream for an outcome. DSP buyers are typically outcome driven. Definitely. Yahoo proper buyers are largely outcome driven. We will get, you know, big brand takeovers. You know, we just sold one yesterday for The World Cup. You know, we've been building deeply into soccer, into motorsports and some other verticals there. But for the most part it is performance based and we are just one of the rare, I don't know, we have to be like top three places to go for really high performing advertising. And it's not the same buyer always. So I'll give an example just because I know he'd be okay with it. But a person who used to work for me run SurveyMonkey and they were buying through the RDSP and he came to me and said, yahoo proper is by far the best performing part of this. Can we just buy directly from you? And so I introduced him over and they did a deal to buy direct through Yahoo. So it's a different ad format for sure. And again, even native advertising can perform. It's going to perform at a different percentage. But the Internet is just a much broader and more vast place than people appreciate. You know, we, we are growing Yahoo after 30 years. It's pretty incredible that through all, with all it's been through and what you might assume about it, like for example, 50% of Yahoo mail users are Gen Z or Millennial. Nobody, nobody would assume that. And it's growing has had one of its best years ever. But the, you know, the size and scale of it is just very rare. And so, and, but, but of course, the surface area for that is mostly not going to be premium video advertising. It's going to be display. And that has its place in the ecosystem. It's not the hottest thing right now, but it converts and it has a place.

Nilay Patel (51:09)

I'm asking these questions because it's just refreshing to hear people say the basics. Still have something to say for them.

Jim Lanzone (51:15)

Yep, they do.

Nilay Patel (51:16)

We're going to send traffic to news publishers and we're going to do display advertising.

Jim Lanzone (51:19)

Now we got to get search there, dude. Search has to come along for the ride.

Nilay Patel (51:24)

So let me ask you about search. You told my friend and colleague David Pierce that you're very proudly number three in search. One of the more famous decoder back and forths of all time is Satya Nadella at the launch of Bing with ChatGPT said, I want to make Google dance. Every point of market share I can take from Google is billions of dollars for a bottom line. And then Sundar, who has a very different personality, came on decoder and was like, good, good luck. Right? Basically, like in his very Sundar way, it was like he wanted to say that I'd get a rise out of you, but like I'm not reacting to that at all. And you can see how that played out. I don't think Microsoft took points of share off Google. Maybe ChatGPT did, but they don't have the monetization right. They're furiously hiring people from Meta to figure out how to monetize this new search behavior that they've created while Google is just going to roll it out across their products. You're number three. You're sitting there, you're watching, you're watching this dance, you're rolling out AI search. Can you take points off of share off of Google and can you monetize them in a way that actually makes sense?

Jim Lanzone (52:18)

It's funny you mentioned that Bing, I remember the big launch being at the D conference and this is probably before I realized how Twitter was going to work. And I put some snotty tweet up about when they announced Bing that it was essentially a copy of ask.com of what we had already built. And Dan Frommer took it and turned it into an article. And I was like, no, no, no, perfect. I was like, delete. I didn't mean for that to get out there. So you know, I've been through the search wars. The way that we look, I'm never going to be in a worse position than where the, the Ask Jeeves brand was in 2001, 2002. And we did grow market share in search. And the way that we did it is that we had a pretty big audience for the time with a completely underperforming product that the original product showed up 85% of the time, was only clicked 25% of the time because it was a hand coded NLP. It didn't really do it the way NLP works today. And through a series of things of improving search and launching what became Onebox on Google and doing all that. What we found is that if somebody was doing 1.5 searches a month on Ask, that if we launched these things, they would just do three searches a month on Ask to start with, that was doubling our search volume and search advertising. It was linear in terms of what that would do for revenue. So that's how we got profitable and grew that company from the brink to selling iac. Some of the same things are in effect here. Nobody chooses, you will not be surprised, Yahoo over Google or somewhere else to search. The way that we get our search volume is because we have 250 million US users and 700 million global users in the Yahoo network in any given time. And there's a search box there and infrequently they use it. It that search has been under threat of moving to LLMs. And so we had to evolve that search engine, which we've been in partnership with Bing since 2009, and outsource that. And we had to do something to make sure that they kept doing those searches on Yahoo, the ones that they were already doing. So to do that we had to have AI search. And our decision was that as we looked at the landscape, we were actually the best people to build it because we actually had the data to build upon to do it. And we could do it and we could do it affordably. But are we going to grow in search? I certainly hope so. And if we do, it's going to be because people are doing an infrequent number of searches today when they use it and they see Scout and it's awesome and the results are really good compared to what they would get elsewhere that they the next time they're on Yahoo for mail or fantasy or check their stocks, they'll do another one. And that really is the beginning of the pathway wherever we wind up. I can't get there without that start. You know, there's always going to be the question mark in the middle of underpants gnomes of before profit.

Nilay Patel (55:11)

But that is old school.

Jim Lanzone (55:13)

Who knows where that goes? But. But that has to be the starting point and that's why we did it.

Nilay Patel (55:19)

We have to pause here for another quick break. We'll be back in just a minute.

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Jim Lanzone (58:02)

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Nilay Patel (58:07)

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Nilay Patel (58:34)

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Nilay Patel (59:00)

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Nilay Patel (59:34)

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Nilay Patel (60:06)

welcome back. I'm talking with Yahoo CEO Jim Lanzone about search and AI. You said earlier in this conversation that the original sin of Yahoo was giving search to Google, paying Google for the privilege of running the search box on Yahoo.com I am guessing you did not buy 10 million Nvidia GPUs to train your own model who is running your search right now.

Jim Lanzone (60:27)

So we are working with Anthropic with their lightweight model called Haiku and there are a number of these. Actually ChatGPT used to have one called Nano that they kind of aren't really doing anymore. I've heard they might bring it back, but we're not displaying results from Claude. It's results from our own data that they are processing essentially. So we send them a payload that is both all this amazing data from our knowledge graph soon to be our user side because we're about to launch personalization. 30 years of search history, all of our vertical content knowledge and then we also are grounding with Bing and so that combines into one payload we send to Haiku. So that's the large language model that is applied in a small parameter way to Yahoo Data that sends it back to our rendering engine in the way that you see that we think is really cool and useful and the way that we render results. So it is definitely a much more affordable kind of a MacGyver way of doing it. But actually if you wind up Eric Fang, who's the mastermind of this project, who is our head of our research group and the head of our search group would phrase it, is that Yahoo Data plus haiku equals very competitive AI answer engine. And again we're not going to be doing all the things a large language model can do, but you are very shortly going to see us get into very personalized results. You're going to see us get into very agentic actions that you can take. And with that launch, not only do we launch the Scout answer engine@scout.com, but we actually on the day of launch have embedded it within all of our other products. And so of course there's news summaries, but on there's a button in Yahoo Finance that does analysis of a given stock on the fly. It is in Yahoo Mail to help summarize and process emails and extract really useful information. And there is a whole roadmap that you're going to see with a lot of different, smaller announcements over the course of the year of things that it will become very proactive and if you remember the days of push, it's going to be very push oriented where I think this category is going to and people use this for productivity at the core of Yahoo. And so I think this helps us also do that at the same time have a kick ass AI answer engine.

Nilay Patel (62:55)

So you've got anthropic, sort of the heart of it. I presume that that means you can take them out, right? If there was a better vendor or a better partner or better deal terms, you could replace that little LLM core and your products would still operate. One of the dynamics in AI generally though is that the big models are eating more and more of the capabilities that people are building on top of them.

Jim Lanzone (63:17)

I didn't see that coming in the history of the consumer Internet that each 800 pound gorilla tries to do everything and eat all of its.

Nilay Patel (63:26)

Don't worry, one day you're going to open Claude and it's just going to start serving you vertical social videos and we're going to be like how did we arrive here again?

Jim Lanzone (63:32)

Well, they're already trying to do it of course, but Google has started to compete more with all of its providers over the years too. So this isn't new.

Nilay Patel (63:41)

So how are you thinking about the dynamic? Right, you've got this long history, you've got a core vendor in a position that looks a lot like the original sin, right? You're paying a vendor to run the search, but maybe you can swap them out later. And then that vendor is just going to keep growing its capability set and all the other vendors who are similarly positioned are going to keep trying to grow their capability set. How do you avoid the cliff? Because it feels like it rhymes with the past, as you're pointing out.

Jim Lanzone (64:05)

To tell you. Look, our biggest challenge from here forward right now, because I think we're starting to cook with oil on the product side is actually brand. You know, I think we've, we've come a long way, we've climbed the mountain a bit and we've made a lot of progress, especially in the industry. I think people know what's going on here. But you know, if we hope to have like a New balance type comeback where it's, it's got or the Gap or these places that have kind of been down but have, have made this comeback and become really solid brands again, which is my aspiration for the Yahoo brand. We have further to go to where I think we're really punching at the weight where I want to be. The reason why we're as good as we are is because at our core we do a really good job in these verticals where we play. And if we can deliver these products that are much better than what we inherited to a user base this large, I think worst case, we are growing that audience at the core. And I don't think we are big enough. I think an anthropic in a OpenAI we're back to fish but have much bigger fish to fry than Yahoo. We might be collateral damage in what they try and do.

Nilay Patel (65:24)

Absolutely.

Jim Lanzone (65:24)

I've known since the start and others have said this that you are tempting fate by opening up a way for consumers to access your product within a large language model. They certainly over time will try to take that on themselves. We've seen that every single time in this industry going back to aol. To be honest, I think that is a danger for everybody. And the same way I don't think publishers would have been okay with people just taking their data and republishing the answers without getting traffic back. I think on this topic, people should be very careful on how they partner with a large language model on this going forward because the big bad wolf will come to your door and say everything's cool. That being said, Anthropic has been an amazing partner. They were really impressed by the MacGyver move that Eric Fang and his team made and how we use Haiku. In fact, they're part of our press release for the launch of Scout and we're going to be doing something at south by together. So that partnership's really good and I hope that it lasts for a long time.

Nilay Patel (66:32)

The other big bad in all this is Google. We've brought them up several times. Google has a big dsp. They compete in all the areas you're competing. They aggregate a bunch of news. Google Discover is the secret referrer to half of my competitors. They will never admit it, but it's true. They're in a lot of trouble. There's a bunch of antitrust cases about their ad tech staff, about search in general. I don't know how they're going to all that's going to play out in the end, but they're under a particular kind of pressure. Do you see that as an opportunity or do you see the way they run their ad tech stack as a particular kind of threat?

Jim Lanzone (67:05)

Man, I still think of Yahoo as being as not being on the same, you know, to think that we would be able to take advantage of Google at this point. I think we have further to go, but I think they're in a very strong position. I think that they really were surprised by the launch of ChatGPT and that was a generationally important product. I think Google probably had it in their labs working the same way.

Nilay Patel (67:27)

Oh no, they did. If you mentioned this, a Google person jumps out of a bush and says, we invented Transformers. They're over it now because they've managed to execute.

Jim Lanzone (67:35)

That's right. And I don't know if you remember Danny Sullivan.

Nilay Patel (67:38)

Oh, I know Danny well.

Jim Lanzone (67:39)

Danny was the figurehead of search and ran the biggest search conference. And all the SEOs who didn't have their names and their business cards would be outside smoking and hanging out with Matt Cutts and that whole generation. Danny then ultimately went to work for Google and is like an evangelist for them. And I've seen a presentation that he gave where he is singing the praises of the open web and how important it is. And I am positive that they would have done more to take that on if they had been able to drive the conversation of the UI of this thing. If you've looked at it, I mean, a very small percentage of ChatGPT of Google users have actually used ChatGPT. I think similar web put that stat out on Twitter where I saw it much smaller than you would think. So their opportunity. And this is why they look so much like ChatGPT and why AI mode is embedded everywhere. And you know, frankly, I will do something very similar once we're through this beta period of distributing it. Through Scout, through Yahoo. But I do think it's their game to lose. I think the one thing that is existential for them is making sure that however this goes is that search advertising crosses the chasm into this new hybrid answer engineering world. I do not think that products that take nine steps of agentic whatever to monetize some outcome are going to be anywhere near as efficient as you, you know, as you. You clicking on links and them getting paid and. And obviously the world is headed towards outcomes over time anyway, but it has to find a way. I think the UI that we launched lends itself to where that might head in a way that would not cause Anthropic to write to do a Super bowl ad about us. I think you can do it in a way that is very clearly, you know, paid and it is helpful on commercial queries. I don't know if you remember, but AltaVista tried to launch search advertising and were shut down by the industry and ads and articles and Wired saying how dare you. Before Overture kind of made it okay before Google AdWords came along and then really streamlined it. And I think that issue has been asked and answered already. Users are okay with it in commercial categories. It's just about how you bring it over. And I actually think there's a way to do it that's keyword driven, that is rendered in a way that is in this new format that users might prefer. So that is where we're headed and that's the product I would like to launch and see if it gets there. But if Google doesn't get that right, it will be difficult.

Nilay Patel (70:09)

I'm very curious to see how these user interfaces evolve. I'm watching every day ChatGPT has a new rift and you can tell they haven't figured it out because it's hard to make it native. And that's really what everybody wants, is for this to feel native. And even the, you know, 10 blue links have not been 10 blue links on Google for a long time. There's a lot of embedded native experiences.

Jim Lanzone (70:28)

20 years. It's been 20 years.

Nilay Patel (70:30)

Yeah. So I'm curious to see how that evolves. I'm dying to see how you try to solve it because it doesn't seem like anybody knows yet. And you know, search advertising is the most lucrative business in the history of the world. So it feels like if that's up

Jim Lanzone (70:42)

for grabs, the first draft of Scout is I really. We've gotten a lot of great feedback on the UI and we have a lot of things that we want to Add to it and improve about it. But I think we came out with a good first attempt and we'll tweak it from here.

Nilay Patel (70:57)

And just be clear, your plan there is you're going to grow the overall Yahoo user base. More Gen Z people are going to sign up for Yahoo Mail and you're going to capture some of that search activity instead of trying to take direct share from Google search.

Jim Lanzone (71:10)

The dream would be that they then start to prefer us for search and bookmark us and decide to go to us instead of one of the other guys. And you know, for the people already using it, their usage is increasing, so more queries per day per user. So I know we're onto something with that and I do hope that it gets there. But part of the thesis of the business plan for this was we have a huge user base, just like Google does, but in a smaller version, the poor man's version of being able to distribute the same way they've done with AI mode and put it on all the different surface areas. So that is the homepage and news and sports and fantasy sports and every single version of that. We have new products coming. We launched three new fantasy products last year, one of which was a huge traffic driver and we had the biggest year of fantasy ever. So it's like every one of those is a surface area to which we can and bring an audience that can trial, scout and hopefully it goes from there.

Nilay Patel (72:11)

I want to end by talking about finance and sports. New fantasy products are great. The action in sports is, boy, you should just bet on sports now, right? You can see it with all these prediction markets. That is their big business. They have a lot of money to throw around. They've captured a bunch of lobbyists. I would say, politics aside, the sort of bipartisan nature of people feeling weird about sports gambling is unprecedented in my lifetime. Next to that is we should just bet on anything. And then next to that, you actually mentioned it earlier. You came to Yahoo with crypto and then stonks and now there's just gambling. All of that has always felt like gambling to me. Right. Crypto has always felt like one form of gambling. Stonks was like, what if we just gamble by doing Reddit threads until GameStop goes to the moon? And now we're just at, what if we just gamble on the outcome of the war? There's a pretty linear connection between all these ideas and how people feel about gambling. You run finance, which is home of Stonks. You run sports, which could be the home of sports betting. Do you feel like you have an obligation to buffer against everyone's worst instincts

Jim Lanzone (73:20)

here to the extent everybody does, then yes. And by the way, we do that in all kinds of places. Like we really try extremely hard to be purple with news. Now. The algorithm may take you left or right over time. It's partially our job to help reset that every now and then so you don't get too far down the rabbit hole and you can see more neutral sources. I get complaints all the time from both the left and the right, so it probably means we're doing that right. I do think that's an important responsibility. I don't know if you know this, but Apollo owned, historically owned Caesars and currently owns the Venetian and the Palazzo and the sportsbook at Venetian. Palazzo is the Yahoo Sportsbook. Now we don't operate it. It's a branding thing and there's our content everywhere. Whatever. We have had discussions since I got here about whether. Because they are experts at it much more than we are. Should we do what Fanatics has done and get into the bloodbath of gambling and should we do it ourselves? And we decided no, that not only is that a huge cost sink and it's already so far along you're battling it out to be eighth in the state of Iowa. You know, we'll stay away from that. We'll be a distributor and we'll be the, you know, we'll be the top of the funnel for all those. That's historically what we inherited about BetMGM. That's where we're going to play going forward. In some ways those are ad deals. You know, if you really think about it, we will incorporate odds and we'll incorporate some of the more news driven things around, you know, the betting odds about a certain topic as a, as a news item. But we, but we don't operate. But we don't operate in either space. We just announced a deal with Coinbase as well where we are linking to them for, you know, if you're going to be buying stocks or crypto.

Nilay Patel (75:00)

Yeah, I'm just more. I mean, you have a long history here. I'm just asking, maybe just about Vibes, right. That finance. Maybe the stock market has always been gambling. Right. Some people would make that argument. Maybe it's always been gambling. But the idea historically is you should turn on CNBC and look at the fundamentals of a company and invest in a company is going to grow for.

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Nilay Patel (75:20)

And we've kind of just let that be gambling now. Right. That's what meme stocks have done to financ very specific way. Crypto maybe was just always gambling and we pretended it was going to be bigger than it was. And now crypto is part of finance and now it's like even more gambling. Sports was not supposed to have any gambling at all, right? There was like the reason the leagues kept gambling away and then the money is infected sports. And now everyone thinks there's an NFL script and all the games are rigged and the ins. And you can see players are getting in trouble.

Jim Lanzone (75:48)

I wish, I wish that script would include the 49ers winning the Super Bowl.

Nilay Patel (75:51)

I wish it would include the Packers. I got some real issues about the packers in the second half of games. Then I think we should talk to the scriptwriters.

Jim Lanzone (75:58)

Although Pat Mahomes does get calls that nobody else does. And frankly, maybe it is scripted.

Nilay Patel (76:02)

Everyone thinks it's rigged and Taylor Swift won her first Super Bowl. That makes no sense to me. It's the presence of the gambling that has led to the perception of corruption. And even though the leagues know it, even though the players are starting to get caught up in like sting operations, the money is so convincing that that's a problem. And now it's going to happen to news. The prediction markets are coming for the news organizations, for the aggregators. They're partnering with Reuters. Like something else is going to happen where you have insider trading, betting on news at scale right now. You operate in these verticals. You're talking about your responsibility. You're talking about making the algorithm neutral. Here is the pressure and not just the pressure, the money from your PE owner that runs casinos. There's a real back and forth here and I don't know if anybody has really thought about the lines. I'm asking you, where's the line? Because you could turn all of Yahoo into gambling tomorrow based on the assets you have and the pressures that exist in the world.

Jim Lanzone (76:58)

It would have to be a really big check, which I don't think is out there at this point. It really is information in a link. I think sports odds are incredibly fundamental. I've been in a college betting pool with all my friends from UCLA for 20 plus years. It's one of my favorite things I do every year and I finally won some this year. You have to have the odds and you have to have the information. And if you've looked on these properties, Yahoo Sports, ESPN for years with Number Fire and all the different ways that you can analyze it. Fantasy obviously is a game. It's not gambling, but it's A game. But it is very much part of the spine of the book for what Yahoo Sports is about. So I do look at it as adjacent to that. And I don't want to give a political BS answer. I just also don't want to act like I'm the expert. I know one of your last episodes was on this topic and I listened to the whole thing and I think every argument you guys are making for why something is gambling is a valid argument. And then I also understand the two way contract side of it. And even on the insider trading there's somebody on the other side betting the other way betting. So. So I don't know where it's going to wind up. And if it winds up where this is illegal, then obviously we won't have it. And if it is legal, it's incredibly popular and it's a popular way that people are. It's, you know, we always think about like what's the next step somebody's going to take to accomplish whatever goal they're trying to achieve that day using our products. That actually is a cheesy thing that we talk about and try to build for and are trying to do a better job at always over time. I can't think of a more fundamental next step downstream than going to FanDuel or going to Coinbase after what you've learned on Yahoo Sports or finance. So I do have to have it as a core part of the product. I have to where that heads is going to be decided at, you know, rungs up the ladder for me. But I do get your point for sure on it, Dina.

Nilay Patel (79:01)

To me the comparison is to sugar or I don't know, booze. Like both legal, both incredibly popular and both obviously bad for you in excess. And there's. We've built a lot of norms around excess for those for sugar and booze. Like we're just good at it and people still fall off the edge all the time. There are no norms for prediction markets really. Right. And the insistence that it's not gambling actually keeps a lot of the other norms away. You know, you've talked a lot about your values and you know, I'm saying it's refreshing to hear you talk about brand and sending traffic to the web. This is a place where I think your values will be under pressure because the norms aren't there. Is there, is there a line for you?

Jim Lanzone (79:42)

Well, I think the line would be something you have to think about more if you or us, if we were operating in either space, which again we looked at including Trading and decided we're better as a partner, you know, saying traffic downstream. So maybe it's similar. Do we take ads from, you know, beverage companies, you know, from Bud Light. It's funny. Do you know, do you know why FDR law. Sorry, why FDR won the 1932 election? It was Andrew Ross Sorkin's 1929 book. It wasn't the Depression, it was Prohibition. Yeah. And I also don't think we're going that way. I think these things are probably at some level here to stay. And in that way I think they're a fundamental, you know, part of, you know, the next steps people are taking from our products. So I do think we're a very relevant place for that. At the same time, we're, we're not the right company to operate them ourselves. So you, you won't see us going down that pathway. Most likely, maybe one of them will try and buy us, try and buy us and mung us into it. But I could, you know, could see that potentially happening. But otherwise, you know, we're back in the aggregation zone.

Nilay Patel (80:50)

So that was my last question, actually. You got there, we made it. You've listened to a lot of decoder, I can tell. Private equity usually wants an exit. That might look like Yahoo going public again. It might look like an acquisition. Do you, do you have a preferred outcome in mind or do you have a timeline?

Jim Lanzone (81:04)

Yeah, you always forget how, how I know you guys have rules on this, how nothing is off the record in the uk And I remember I was being interviewed by someone in Cannes and I don't know, I just one wrong turn of phrase and all of a sudden there was an article that we were going public and it made its way to CNBC and it was like not in any way where we were yet. So it does tend to be a catnip topic about Yahoo that people are like, oh, when's the ipo? And there's a lot of people out ahead of us who are trillion dollar IPOs that are probably first and others that people are wondering about. I'd say I am building this thing so that we can be a healthy public company again where you're not quarter struggling, which is I think what got Yahoo into trouble in the past. AOL got into trouble in the past. So, you know, we're building towards that for sure. And I think we have longer to go to get to the point where we are truly ready to be public five years after we go public, not just the day we go public. You know, that said, I Think the, the history of PE is that they would probably much rather sell, you know, that, that, that really is more their model because the cash out is more immediate. They don't have to wait, sell down as the majority owner. And that just creates its own set of problems. So that said, I think we talk a lot about IPO in our board meetings and the board is much more than just Apollo. And there have been people trying to kick the tires on us for quite a while, which also, by the way, winds up with all kinds of weird news. I get calls all the time because the other part of PE is they kick every tire and they allow every tire to be kicked. So they're always getting phone calls about different parts of Yahoo. But the truth is Yahoo is way stronger together. The thesis originally was maybe you would break these things apart and you could sell finance, you could sell sports, but you would really have to do it on the same day. It all would have to go at once because it really is an ecosystem. The average Yahoo user uses two or more of our products and they do, as we've talked about, send traffic to each other. And it's part of the data gold mine is because we have all of them together and, and I think in the context of all the other companies out there, we're still incredibly undervalued for what we bring to the table. I really think because the brand is Yahoo in some ways it's part of why we're as big as we are. In other ways. It's still part of the challenge of where we need to go. That is really how we talk about it and look at it and the decisions we're making are for the future ipo. But if anybody is smart enough, I don't, I don't know, they let us get there.

Nilay Patel (83:38)

Well, Jen, this has been great. I really enjoyed talking to you. It's. It's good to talk to another Internet og both with weird shared histories with aol. I gotta say there's, there's more of that burbling beneath the surface of this episode than anyone can, can possibly know. But I really appreciate the time. Thank you so much for being on the coder. Awesome.

Jim Lanzone (83:54)

I appreciate having me. Thanks.

Nilay Patel (83:57)

I'd like to thank Jim Lanzone for taking time to join the coder. And thank you for listening. Listening. I hope you enjoyed it. If you like to let us know what you thought about this episode or really anything else at all, drop us a line. You can email us atdecoder the verge.com we really do read all the emails or you can hit me up directly on Threads or bluesky. If you like Decoder, please share it with your friends and subscribe over your podcast. Decoder is a production of the Verge and part of the Vox Media Podcast Network. We'll see you next time.

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Nilay Patel (84:49)

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