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Back to Apollo’s Yahoo Playbook, 5 Years After the $5B Deal, with Jim Lanzone.

Why Are Tiny Search Startups Valued Above Yahoo?

Jim Lanzone says he is not kicking himself for acquisitions Yahoo missed, because startups have been priced so high. Companies with less than one tenth of one percent of Yahoo's user base are valued above Yahoo. Search companies that launched were valued at six times Yahoo, even though Yahoo already had a large search audience, revenue, and profit. A merger where the other side is marked in the billions and Yahoo brings the audience is not a deal he can do. He does not think Yahoo passed on something it should have bought.

He has been on the other side of that market. A 1990s startup he co-founded was writing an S-1 when the market crashed, ran on fumes, and was bought by Ask Jeeves. The people who came over mattered to that turnaround. Yahoo has bought a few startups the same way. They were not pure acqui-hires. Yahoo used the product, and the people who joined have led some of the most important things the company is building.

Transcript

Apollo’s Yahoo Playbook, 5 Years After the $5B Deal ·

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More from this episode

  1. How Did Apollo Buy Yahoo From Verizon?Jim Lanzone says he was not at Apollo when the firm decided to buy Yahoo.
  2. What Did Jim Lanzone Do in His First Six Months at Yahoo?Jim Lanzone says Yahoo was his third turnaround. Ask Jeeves was the first, during the web 1.0 crash. A 1990s startup he helped found was bought by Ask.
  3. How Is Apollo's Yahoo Turnaround Different From a Typical Buyout?Jim Lanzone says people always ask what it is like to work for private equity, and the reputation is not always good. His experience has been the opposite.
  4. Why Did Yahoo Give Each Brand Its Own General Manager?Jim Lanzone says Yahoo is a conglomerate, not a one-product company like Pinterest, Snap, Reddit, or Roku.
  5. Why Did Yahoo Shut Down Its Ad Tech Business?Jim Lanzone says the biggest asset Yahoo divested was AOL, and the first was Edgecast, a content delivery network competing with companies like Akamai that he…
  6. Why Did Yahoo Build Its Own Search Engine Again After 17 Years?Jim Lanzone says Yahoo Scout is not a frontier model like Gemini, ChatGPT, or Claude, and it is not meta-search in the way early Perplexity was, sitting on…
  7. How Did Yahoo Return Apollo's Capital So Fast?Jim Lanzone says Yahoo has paid back pretty much the price Apollo paid, and that this is public.
  8. Why Do Big Internet Companies Fall Asleep at Scale?Jim Lanzone says the usual failure at scale is falling asleep at the wheel.

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