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 did not think Yahoo had a right to run. The largest transformation until the current AI work was ad tech. AOL and Yahoo had each bought more than 30 ad tech companies. What Apollo inherited was a supply-side platform, a demand-side platform, and a native platform. Operating them lost a lot of money, hundreds of millions of dollars a year, and they were also Yahoo's primary ad revenue, so Yahoo could not shop its own pages for the best yield.

Shutting those businesses or selling them stopped the losses and let Yahoo optimize revenue on Yahoo itself. In February 2023 the company let go of more than 2,000 people, in part because it closed the supply-side platform instead of selling it to a buyer who would have kept a preferred spot on Yahoo's pages. The native business was sold, and Yahoo took 25 percent of that company. TechCrunch was divested too. AOL was sold in October of the year before this conversation. Inside what remained, Jim says there was a crown jewel worth investing in, the demand-side platform.