Jim Lanzone has never been afraid of a solid turnaround story. Yet the former chief of Tinder, CBS Interactive, and Ask Jeeves views Yahoo as less of a company in need of revamping than one never been properly vetted for its upside. This is why Lanzone stepped into the CEO spot in 2021, taking over the nearly 30-year-old internet legend.
“I do think the brand has a huge strength,” he says. “But the biggest opportunity for the brand is ahead with the work we can do here.”
Gone is the famous yodel that played on Yahoo’s commercial in the early days of the internet. Left is a brand with what Lanzone calls a “modern vintage feel,” and a fanbase rooting for its success. That’s not going to be hard to find, with more revenue and profit than Twitter, and a platform used by one billion people every month, he says.
What does that future look like? Lanzone sees multiple opportunities — even possible spinoffs of some of Yahoo’s inside brands including Yahoo Finance and its email service, which he notes filters 28 percent of all global emails.
Hear more from Lanzone about his plans for Yahoo in this month’s Signal Conversation with Signal 360’s John Battelle.
TRANSCRIPT
John Battelle
Hello and welcome to another Signal Conversation. This is a special one for me. My friend and colleague Jim Lanzone whom I’ve known for almost three decades, is now the CEO of Yahoo. He’s got 20 years of leadership and entrepreneurial experience in technology and media, and a proven track record of driving growth and innovation. Before Yahoo, he was the CEO of Tinder, the app that connects people, one of the highest grossing apps in the world, the highest non-gaming app grossing app in the world. He joined Tinder after nearly a decade of leading CBS interactive, a Top 10 global internet company with brands ranging from CBS All Access to CNET. He was also named the first Chief Digital Officer in the history of CBS. And prior to that, Jim was like me, a search geek. He ran a search engine called Ask Jeeves. So Jim, welcome to the Signal Conversations. Great to have you here.
Jim Lanzone
Thanks, John. awesome to see you even half a world away here.
So Jim, is at Cannes as we speak, which is course, as he called it, Business Coachella. And he’s been quite busy all week long. So appreciate you sliding into home with us here. Now, you’ve been in the game a long time. And really, you’ve been something of a media turnaround specialist. You’ve gone and run big brands, or umbrella brands that have a lot of different brands underneath them. So what was it that inspired you to decide to take a crack at Yahoo.
First of all, the opportunity came up pretty randomly. Verizon decided to split it out. Apollo, private equity firm beat everybody to it. I kind of consulted for them on that process. I was doing Tinder. But I gave my opinions and looked at it and just thought, if you if you were to take the name Yahoo off of it, and just look at almost a billion users a month, growing double digits, doing billions of top line revenue, 10 figures of profits. And realize that companies only get this big once every five years. I mean, I think TikTok is the last one. There are just so few of these around. It’s sort of the third largest internet company. And to your point, I’ve never been afraid of a turnaround. Ask Jeeves I think was one of the best ones of the 2000s. We sold that to IAC. And CBS interactive had a lot of that, CNET, things they’d acquired. So that was a big part of what we did there. We launched then into streaming. But along the way, we’ve turned some businesses around. So I looked at it as having all the ingredients necessary. And something that probably just hadn’t been treated right, especially from a product point of view in a long time, but still has this amazing size audience, number one, and all these categories. And I just thought I could do something with that.
The thing about the Yahoo brand is there’s so much love for it from the OGs, which I count myself a member of, the sort of first-generation internet folks. But there’s also been a lot of turbulence in the last 10 or 15 years. As you know, as it seemed that the FANG, right, the Facebook, Apple, Netflix, Google, and Amazon kind of took over and lapped Yahoo. Is the brand overall a net positive if you think about it as you framed it? This is an incredible company. If you just look at the numbers and take the brand off it put the brand back on, does that help or hurt?
Remember, the brand just got put back on September 1. So the company, we also own AOL. So we got a lot of OGs. And I want to get into that but also a very large, profitable business. There’s been two main surprises for me. Number one coming in here is that it’s actually not a turnaround. It’s an upside opportunity. And I don’t think that upside has been properly taken advantage of for a very long time. We could really throw our weight around and become a much bigger player again, and as a business very profitable. If you compare it to someone like Twitter, more revenue way more profit, much larger audience. Why is that worth $44 billion and we were bought for $5 million? That makes no sense. And so you know, Verizon had it for almost six years and I looked at the business plans, and many of them included the promotion of 5G, and that shouldn’t be in the business plan for Yahoo Sports. So there’s a lot that can be done with it. It’s not a turnaround. The second huge surprise for me has been to your point, how many people love the brand are rooting for us. There’s this modern vintage feel to it that I think if you can reward it with great product management and great product development, which I know that we can do, there’s real upside for the brand too.
The last thing I’ll say, is here in Cannes, in France, at the huge advertising conference, we’re a major brand here. Our party last night alone, was up against the Spotify party, and it was flowing into the streets. I mean, people, all week, we’ve had meetings with the biggest clients, and everybody loves it. And I think one reason is, it works. It is a well-known brand, that a billion people use every month, not because we have hooks, like a browser or some other way to force them into our ecosystem. They choose to use it in all of these categories, like email, search, sports, finance. And we’re usually number one or number two in all those categories. So I do think the brand has a huge strength. But the biggest opportunity for the brand is ahead with the work we can do here.
So tell me about those opportunities and tie it if you can, to the aforementioned growth. What is growing quickly right now in the Yahoo stable? And what brands do you think are going to be really breaking out in that, you know, under the Yahoo umbrella in the next few years?
I think one important thing, and I’ve managed portfolio companies before, and I’ve been part of portfolio companies. So IAC where I worked for several years with multiple brands, some spin out to go public, we have the opportunity to do that. Yahoo Finance, which is number one by a mile in the finance category with 10 times the engagement of Dow Jones, which is number two, if we get to the point where that could be a separate IPO or a merger or something else, we have the opportunity to do that. So I do look at them all individually, right, the email business plan, where we have 28 percent of all mail, we sell $500 billion worth of receipts alone in mail last year. So it’s huge. It’s not as big as Gmail, but it’s bigger than everything else. That’s an example. I do think Yahoo Finance from a product point of view, I’m sure many people listening here use it a lot. I think there’s a lot we can do to improve it from just from news and stocks, into trading into personal finance, there’s a funnel. For people, it’s the same thing in sports from news and scores into fantasy, into daily fantasy and a betting. And as you know, one of the top two with ESPN, we have the right to do all that.
Remember, we also run with the largest ad tech platforms. So our DSP is one of the largest, it’s not as big as Trade Desk, but it’s right there, behind it. And we’re growing. We grew 70 percent last year in that business. And one of the things I heard here the most all week is that they keep hearing our name, people keep talking about how great the DSP is, and switching. We have this omni channel ad platform ad business that is very unique up against, nearly a billion users of first party data that again, choose to use us every month for the consumer side and gives us a direct direct relationship with data. We have our own identity solution with Connect ID. And as cookies go away, I just think that puts us in a huge position of strength there. So these are all different opportunities. I just reorganized the company in May to reinstitute a GM model. So there are now people running each one of those businesses who have their own P&L and can run with them, which is I think, the only way to run a portfolio business. So I’m excited for each one of them to drive those opportunities.
I would presume knowing you that those GMs have if they’re not product people, they have deep respect for product. So how do you think those products, if you want to pick one or two, are going to change? Ladder those changes you want to see in the product organization and what is made at Yahoo against some of the larger trends that are occurring broadly in the in the digital industry.
Well, I actually think that this this market downturn, while rough for the economy, and rough for others, is coming along at a great time for us because we just became a private company again for the first time in over 25 years. That really gives you the air cover to treat the products right, to make changes the way I’ve done, but then also, to go back to the beginning. I really think top to bottom, every one of these products can be modernized and improved. That includes little things like the freshness of the news feed. I just came out of a three-hour meeting about that last week in our headquarters with with Tapan Bhat whose the new president of Yahoo Finance. I have aspirations in search, believe it or not. And that doesn’t mean again, that we would go try to beat Google. But we already have hundreds of millions of people coming here every month who use search. And you know, Ask Jeeves, against all odds, gained market share in search, you remember, and there was a formula to that. And that formula was based in product. Knowing that you’re not going to market your way towards getting people to come to switch search engines. But when they’re there, you give them a better experience. I think a lot is happening in search. You have the transition to mobile. You have the transition even more to direct answers, and not just having these static links, but understanding and interpreting the query better. We have them there. And I think we can grow a lot there too.
You remember Kara Swisher used to beat up Yahoo CEOs on stage? And, always asked them, are you a tech company or a media company? They never really had a good answer. I think the question was wrong. I really think that fundamentally, for us in any major internet company, you are a product company. First and foremost, tech enables it. Media might be something that you create or sell. But email is not media, search is not media. A stock tracking portfolio tool is not media. These are products, fantasy sports is a product. And yes, we create content, great video, we have other things, but it’s a product first company.
You’re the first Yahoo CEO who answered that question in a way that I would expect. Because that’s exactly the right answer as far as I’m concerned. It does seem like there’s a fair amount of upside. But let me ask you this. And it goes back to some of the stuff we were talking about at the top of this conversation. What is the Yahoo brand now? I have asked several Yahoo CEOs that question on stage over the last 25 years. I remember Terry Semel kind of having a hard time answering it. I remember Jerry Yang having a hard time answering it. These are two of the original CEOs. Marissa. Ross. What’s your answer? And particularly for the advertisers and the marketers who want to understand the Yahoo brand, so they can associate with it? What’s the answer for you?
Look, I actually would take issue with that question too. I don’t think that you’re asking Google to define the difference between Google and YouTube, or Amazon between Twitch and Amazon. But the companies are still, they renamed themselves Alphabet, but everybody still calls them Google. And it’s the same thing here.
Same with Meta.
Exactly. The thing is, advertisers, first of all know us. They know it’s a billion users that are very loyal to our brand, and are in our ecosystem. And they can address them as a unified group, with first-party data using these tools, and that it works. Our audience converts, and that’s well-known as well. So what really matters is growth. That’s my mission statement. That would have been true, whether we were bought by Apollo or anybody else. And by we were already the fastest returning deal in the history of Apollo, which is incredible. It was good.
Can you explain what you mean by that? The returning in what way you mean to cash flow?
In terms of the cash they put in and how much they got back and how quickly. But I see your point, though, on the brand, I think what really matters is Yahoo mail as a brand. And now they’re coming to yahoo.com. We’re also the number one news site on the entire internet. And we’re number one in news among many different demographics. We’re number one among the Hispanic audience. We’re number one in the African American audience. We’re number one in 35 to 50. We have all these different demos that we’re number one in news, and what matters for them is not what Yahoo News stands for. Yahoo Sports is very independent. It doesn’t get its traffic from the homepage. It gets it directly, where we’re very well known to be one of the top 24/7 sports brands. I just came from a brand, CBS Sports, that was an event-based brand. We were the Super Bowl we were the Masters. You didn’t think to come there for scores and news every day.
Yahoo Sports is the OG with ESPN in that and it has its own brand, Yahoo Finance, same story, people were coming directly. Yahoo Finance is by far the number one finance brand on the internet. And competes against The Wall Street Journal and others, but has its space. I don’t think people are thinking about Yahoo Sports. The people who are using Yahoo Finance for that reason, now we get them in the ecosystem. And there’s things that we can do with them there that others can’t, because we have that ecosystem. But it’s very different than let’s say 1998. If you’d ask somebody to name a search engine, they would have said Yahoo. That’s what the brand would have been. But they also would have answered on Amazon, they would have said books. So things evolve.
My job from a product point of view, is to grow audience and make these products as great as they can be in each vertical in which we compete. Right? Because they’re different. We’re competing with ESPN, in sports, we’re competing with The Wall Street Journal in finance, we’re competing with Gmail in mail. They’re all different. We’re competing with Trade Desk on the on the DSP side. So it’s all gonna depend. I think if they’re not strong individually, then they’re not strong collectively.
There’s no doubt. You’re a smart guy. When I heard you were taking over the reins, I’m like, ‘I’m gonna have to talk to Jim, because he’s seeing something that maybe the inside baseball people aren’t seeing.’ But the area where a lot of people are talking, and investing is streaming. And that is a word that means a lot of things I know, because obviously, you’re doing a ton of it already across finance, news, various media properties, and so on. Also, I’m sure with the DSP are there new product plans or refresh product plans? Is Yahoo going to become a major player in streaming the way a lot of the big five are?
No, not to start with. You have to play to your strengths. Right? And so let’s take two examples of that. One is streaming where I created one of the first major streaming platforms with CBS All Access, which is now Paramount Plus. I really believe in it. But we had assets that other people didn’t to lean into, to create that. All the news here is Netflix going to have advertising. We had it embedded in that product in 2014, when we launched it. That’s not new. It’s funny how much attention is on Netflix, because it’s new for them. It’s wasn’t new for us. And we can point the firehose of a billion users on some streaming platforms, whether we create them or we partner with them, that’ll be something that I look at. Look, I actually think we have a really important place in the ecosystem today, that just needs to be nourished even more. So what was the last major internet platform to have this size of an audience, Snapchat? What is that in terms of ad dollars? I mean, it’s a communications platform, it would be like trying to advertise in WhatsApp. It’s a difficult place, I think for marketers. And so it’s a great product, and actually, I think is one of the best product people on the internet. But from a marketing point of view, I think it’s very tough to put dollars to work there.
I think that’s actually, in some ways true of TikTok, I mean, the size is great, it’s huge, but how much are you going to do with that attention span, with people and that aged audience. It’s rough. The truth is, I think we need to make our products better and focus on growing from a billion to 1.5 billion with what we do. I’ve already been looking at M&A, and we’ll be pretty aggressive there. I think we’re gonna be able to, Apollo wants us to be. So we can expand that empire a bit. Streaming might be one. But I think what we have is actually becoming more valuable in a lot of ways. And I get it. I’ve been at the conferences for years, you want the shiny new thing, it makes you look cool. It makes you look relevant to your client. Or I’ve seen agencies do that over the years. A lot of these things are really rough for marketers in terms of actually putting dollars to work. And so I like our spot.
Let me ask you about a final shiny object, which I referenced earlier. I heard your conversation with Terry at his conference last month. You talked about the metaverse and Web3. I agree with your summary about the metaverse that it’s early. But you seem to be convinced that there was something to this Web3 thing. And you and I have had many conversations about open versus closed, original internet philosophy versus the consolidation that occurred over the last 10 or 15 years. What do you make of the blockchain based Web3 phenomenon? And will Yahoo be playing there?
I do think the metaverse is very far away, and I think it’s gonna be very difficult to centralize that in any way. So anyone claiming that they’re gonna run the metaverse or you’re gonna run in their Metaverse is a tough proposition. I think there’s some vaporware on that today, obviously, as you know. Things like Second Life has been around a long time, there’s reason why it’s been tough to get this off the ground. So I do think obviously, we’re all going to wind up like in Wally in our chairs or goggles, and living in that world, I think, ia inevitable. But how quickly that happens, I think is kind of a marketing angle right now. On blockchain, we’re in this crypto winter now. You’re always gonna get some negativity around it. But I do kind of think we’re in March 2000, when it comes to that, and I actually am pretty bullish on the applications of blockchain. I also hear the arguments that people are making that it doesn’t replace anything that we’re doing today in that incrementally valuable of a way. But there will be applications and one I really do think is around the idea of identity, and data and people owning their own personal data.
At Tinder, when I was there, and I was only there for 14 months we launched a virtual currency, and we were testing it in different international markets. It went berserk. People loved owning the virtual currency. And it created this virtual economy, and you were then able to incentivize people to take certain behaviors. If you match that up with owning your own data, in a blockchain or environments where you can with a unified wallet, you can be taking actions, earning things, winning things, then being being incentivized to take certain behavior actions, you can control your data, who gets access to it and who doesn’t. Again, that being scaled across different organizations might be rough, but maybe within our billion plus environment, it might be really valuable. So that’s one that I’m looking at pretty carefully.
Well, I’m glad to hear you are because I agree with you, I think there’s a lot to be done there. The time is ripe. As you point out, we’re going into a period where if you can afford to build, it’s a good time to build. Well, Jim, I look forward to seeing what happens with the newly reinvigorated Yahoo. Thank you so much for joining us for this Signal Conversation. And let’s stay in touch. Maybe we’ll do this again next year.
