You're number three. You're sitting there. 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?
So, you know, I've been through the search wars. Look, I'm never going to be in a worse position than where the Ask Jeeves brand was in 2001, 2002. 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. There's always going to be the question mark in the middle of underpants gnomes of before profit. But that's old school. I'm guessing our younger listeners might not know. So but that's amazing.
Hello and welcome to Decoder. I'm Nilay Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Jim Lanzone, the CEO of Yahoo. You've heard of Yahoo. You've probably used Yahoo Sports or Yahoo Finance or Yahoo Mail. It's basically impossible to sum up the long, complicated, chaotic Yahoo story. But the short version of it is that a long time ago, Yahoo paid Google to run the search box on its website, and basically everything has gone sideways since. You'll hear Jim refer to that deal as Yahoo's original sin, actually. After a long series of mergers and spinouts and a brief extremely odd moment where it was part of Verizon, Yahoo is once again an independent privately held company and it still has those big properties in sports and finance and email where against all odds it's growing with young people. You heard it here first. Gen Z loves Yahoo Mail. All of that means that Yahoo is once again profitable and growing according to Jim. But I still had some big questions about where that growth is going. Yahoo is still the third place search engine and it just launched a new AI powered search called Scout. Is Jim really trying to take market share from Google? Is the big bet on traditional advertising that he's making a good one? When creators and influencers are taking up so much attention and with so much of both sports and finance turning into straight up gambling, does Jim have any red lines he won't cross with two of the biggest apps on the internet? There's a lot going on in this one, including some wild decoder chart terminology and what amounts to two people with a long history in the internet trying to come up with ever deeper references to old memes. It's a ride, and Jim was pretty game. Jim was also a huge nerd about adtech, and we used a lot of vocabulary talking about his decision to shut down part of Yahoo's ad business in order to invest in the part that's growing. So, here's a quick rundown of all that vocab. Feel free to come back to this if it gets too wonky. I promise you'll get it. It's not that hard. It's just a lot of acronyms. So, you'll hear Jim say that he shut down Yahoo's SSP. That's a supply side platform. It's the tech that an app, a site, or a platform can use to sell space to advertisers. You've got inventory on your website, supply, and advertisers use the SSP to buy that inventory. Yahoo had a big SSP and Jim shut it down in favor of investing in the demand side platform or DSP, which works the other way around. An advertiser says it wants to reach a certain number of people and then the DSP, the demand side platform, does automated auctions across a number of sites and apps to display those ads. This is the big money. It's how Google makes so much of its money. For example, the thing about a big DSP or demand side platform is that it doesn't just deliver ads on the web or in apps. You'll hear Jim talk a lot about CTV, which stands for connected TV. All those ads and streaming apps, they're delivered by big DSPs, big demand side platforms, including Yahoo's, which works with Netflix and Spotify. Like I said, this is a lot of acronyms and vocab, but just think about it for a minute. Relax if you need to, and I promise you'll get it. Okay. Jim Lanzone, CEO of Yahoo. Here we go. Jim Lanzone, you're the CEO of Yahoo. Welcome to Decoder.
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 in 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 with Yahoo because I got my start in tech journalism at Engadget at $12 a post when it 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?
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 2021 of, you know, really rationalizing the portfolio and what makes sense going forward. Um, 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 were 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. Um, we, you know, the company had, you know, I think drifted very far into all kinds of media and away from its history as more of an aggregator and a place to help you find where to go for that media. But between, you know, TechCrunch, Rivals, which we sold, and Engadget, um, and, you know, a lot of other small properties, uh, ultimately also AOL we sold, you know, back in Q4. Um, so you know, on the one hand it's about focus and on the other hand when it comes to properties like TechCrunch and Engadget, um, 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's why, you know, Engadget and TechCrunch found homes with, in both cases, families of brands that were, uh, you know, either tech focused or media focused and really do that kind of journalism which is really not what Yahoo does.
I want to dig into that just one turn. I think 'we're not the place for breaking news' has a different valence when you talk about that in the context of sports and producing that or entering that news, right, versus being the aggregator for other people who are doing it. 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 Systrom about that over the years. You know, one of the reasons they got out of that business and sold it to Yahoo was they were like, there isn't enough web to aggregate anymore, right? 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'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.
We're particularly passionate about that and I'm sure we'll talk about our AI search engine that we launched, but that's a big part of the thesis behind that as well. A core value of that product is publishers in the open web and doing right by them. Um, but I, 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, you know, 2024 when we bought Artifact or today. Um, and so it was a very small user base for a very awesome product. So I, 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, you know, usually when you make an acquisition like that you kind of munge them into the Borg, into the mothership. We did the opposite. We actually just put the Yahoo logo on the Artifact app and started from there and just admitted it. So yeah, I think, look, yeah, that is still one of the things that Yahoo does best is 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 this business, which admittedly is, you know, a big turnaround.
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 loved stories about fish. I'm not kidding. It was literally fish.
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 it all. It's really just about fish. No, it was, um, 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 its own terms and collect all the algorithmic traffic along the way. And I think 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 algorithm wants us to do, but that's unsustainable. And 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 as an aggregator...
You think about that dynamic, right? If we're not sustainable, we will not actually have enough stuff to aggregate. 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 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 have taken that really seriously here that it's our job to help send traffic downstream, help you build that brand. We're in the same spot. I mean, we have SEO and we definitely are in the same position. And then thankfully over 70% of our visits are direct. And 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 in 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 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 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 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 to avoid people bleeding out 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.
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 as well, right? Like they haven't quite figured out their advertising experience, but they wound up there I think not by accident, but if you think about it, they were built by researchers, you know, and so of course the first user interface had a bunch of citations. It looked like somebody at university had written a research paper. And I think they 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 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.
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, right, of sending traffic downstream. That's not what any of your competitors are doing, right? 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? Everything turns into a crab in the end, right? With convergent evolution. You haven't quite done that. There's, you know, bits and bobs of it on Yahoo properties, but you haven't fully taken that, 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?
I think it can be all of the above in this case. So I do get the question. We could just be 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. You know, we're not a large language model. We're not going to be the place you come to code. You know, 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. It's 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, you know, 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 valued Google, and so there was a lot of fog of war there. But by the time we picked it up it was really, you know, this newsfeed and we have identified that we think people want more utility in our homepage. They can go downstream to news or to sports or to 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 has actually become, you know, a valid way to consume news and information. But, you know, 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 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 ask people to stop crawling you. 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.
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 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 and squint, and all these companies are differently positioned. You compete in different ways, but you just look at it and squint, 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 newsrooms because there's some user demand.' How does that margin work out for you? Right. Where is everybody making money here?
Well, in our case, there are 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 you 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, 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.
Let me just bring this back to Engadget and TechCrunch for one more turn and then I want to talk about how you've 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 the world, right? There has to be some set of other monetization, some set of other revenue, some diversification. You were operating these businesses, you chose to be out of it. Is it just because you didn't see the business opportunity for them or is it you just didn't want to attack those problems?
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&L because of that. They staff premium and, you know, monetize at a 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 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 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 you know, if you think about TechCrunch, it was like, you know, it said right there in the handle on Twitter, it was like, 'Send us scoops,' you know, and they were breaking news sometimes about us. And, you know, 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 we're producing. You know, Shams and Woj before him in the NBA, like they started at Yahoo during that time period. And we just thought, look, 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, at SportsCenter like 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 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. You know, we're one of the top two platforms in the original and in fantasy and sports and we have all these new fantasy games that we've been launching and of course in finance, you know, we are still the number one for, you know, tracking your portfolio and getting research and information about it. And so all of our, whether it's Brian Sozzi and his team, you know, 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 right in those verticals.
Don't worry, we're going to come to the collision of sports and finance in one second here. 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 to 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? They bought it in May of '21. It closed in September of '21. And you know, 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 at basically every stop of my career. I knew every executive team. I, you know, went head-to-head with them over the years. I always thought I'd partner with them on certain things over the years. I always thought it was, you know, the granddaddy of all turnarounds and I've been part of a few of them. You know, I've just grown to love doing them. And 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. And so 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 pitch deck other than my advice and input along the way to buying it. 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'd been at other companies where 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 wanted to try that. And so, you know, look, it was almost 30 years in the making. I was getting it 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, you know, do people in my position normally want to go do that? I've been an entrepreneur. I've started two companies. I've worked for a media mogul. 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, you know, whoever it is. And I felt like Reed Rayman, who was the partner at Apollo who did the deal, was really smart, a really good guy, and that we would be really good partners whether private equity was behind it or VC or anybody else.
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 the sufficient capital to reinvest in the business or are you just moving money around through cuts and reallocations?
Two things. One is that they actually have been. In fact, I was in a meeting this morning where they were offering capital to do big things that we were talking about.
Does the ominous music play when the private equity firm offers you money?
Not if you met Reed, you wouldn't think about it like that. You wouldn't. No, we have a deal team that's not like that at all. And I don't know about other PE. I have not worked with other PE firms. So they've really always wanted to kind of swing, you know, bigger and I'd say in the early days, you know, I mean, if you go back to when I started, it was still the heart of COVID and the crypto boom and NFTs and there was one kind of boom period and then things dried up for a bit and then AI boom and you know, we've kind of gone through this and so what we've looked at doing with that capital has been different. 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, you know, a much bigger outcome along the way. We have tended to make our own fuel. I promise you there's not been one reduction here that hasn't been strategically decided by my team. You know, we shut down two really big money losing adtech parts of the company. That was all our team, you know, trying to do that. So 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 PE gods. 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 replace the gold situation. You know, they had to take a leap of faith with us on that. But yeah, we've not been through any PE driven cost reduction exercises or anything yet.
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?
No. Very profitable. And we, you know, look, we don't disclose revenue. But it's in the billions. That number's moved around as I've moved out a lot of bad revenue with those adtech companies that were driving a lot of topline but not a lot of bottom line. AOL was a lot of revenue and profit. And that went out. But no, 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, you know, to be able to make a lot of these changes. But yeah, it's in a very healthy spot financially.
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?
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 answer. Like the answer is honestly because I've heard some 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 look, I'm the wrong CEO for an 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 the 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, you know, 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. Like you could say, you could dress that up any way you want. That is my job. I think that's a 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 PE, Jerry 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, you know, as I think you go through those phases.
This is the other question. You have 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 the decisions that brought you to that structure?
So, it is a conglomerate 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 IAC which bought Ask Jeeves back in the day.
You know, thanks again my friend.
Yeah. And you know, 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 adviser, 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 IAC 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, you know, 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 like the fantasy, you know, I started playing fantasy on SportsLine and okay, I get to run that now.' And within like a year, it just became clear I was holding everything up. You know, 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 was fine. And that the federal level, you know, there's no reason to have two IRS's or two FEMAs. You know, we could across finance and legal and HR and some other things. We'd...
Can I just tell you, you're killing me. Do you know what Tim Armstrong's reorg was that basically inspired us to all leave and start The Verge?
It was cities, towns, and he put up a big sign over in Engadget that said Tech Town and I was like, I got to get out. I can't be living in Tech Town, dude. Like I got to bail. But I understand the metaphor.
Well, it's funny too because you say all that and 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 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 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, you know, again, I don't think efficiency is the name of the game here. It's excellence, you know, and growth. And so you hire great people to do those things and then I'm, you know, I'm the editor-in-chief at the center of all those and we do have patriotism, you know, across all the brands. It's a lot easier at Yahoo where we have 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 and are really good teammates to each other and, you know, you just, 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 with 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.
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?
Well, believe it or not, those are not the divisions. 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. You know, loads up to that. Ryan Spoon runs what we call the Yahoo Media Group, and that has today, sports, finance, and then I've talked publicly that there's a third leg of the stool, which is we definitely, you know, probably have a right to go deeper into video in a non-fiction way across the verticals where we're strong. News today rolls into the home business just because they were so intertwined, but theoretically that 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&L, the resources to run their business. And then sidebar to that, we'll have a, you know, CFO or the chief revenue officer with the sales team, etc. So, that is how it's structured. If you were to talk internally, there actually is incredible harmony across, you know, those businesses. Yeah. They brawl sometimes over traffic from the homepage or something to do with the content management system or the monetization, you know. But for the most part, I actually think you'd get pretty unanimous, you know, feelings about how we operate together. I think they would all sing from the same playbook. You know, 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.
