Jim Lanzone
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Episodes
Notes
Sourcery · Apollo’s Yahoo Playbook, 5 Years After the $5B Deal
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Why Do Big Internet Companies Fall Asleep at Scale?
Jim Lanzone says the usual failure at scale is falling asleep at the wheel. People who succeeded by climbing the ladder become conservative, and if the leaders are not product-driven they lose sight of what matters. The damage is often invisible from outside: the chance not taken, the company not bought, or the deal a different team would not have signed. You never see the list of what was on the table. What you see later is a startup beating them with something they did not ship.
His rule is the old line that only the paranoid survive. A product company in this business has to run hard for its users, in his phrase a hundred miles an hour, seven days a week. He is always worried about start
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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. He calls it one of the fastest returning deals in Apollo's history. The AOL sale was part of it. He did not feel pressure to do it quickly. Reed Rayman and the Apollo team built a deal whose early pieces returned cash fast, and Jim had spent the months before the close aligned with them on which assets were not going to make it. He describes the company, after that return, as playing with house money for whatever upside is left.
The goal he states is to go public. He talks about Yahoo the way he would about any later-stage company that is still private. About 75 percent of users come directly, r
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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 other engines the way Dogpile once did. Scout is a product on Yahoo's own data. Yahoo is still the third-ranked search engine in the United States, with 30 years of search history, publisher relationships, a knowledge graph, and what it knows about a user. Scout grounds that data, sends it to a lightweight model, and Yahoo renders the result. At launch the model was Anthropic's Haiku. Yahoo uses others now. The answers are unique because the data is Yahoo's.
The strategic reason was sharper. For 17 years Yahoo outsourced search, largely
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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
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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. Finance competes with Bloomberg, CNBC, and the Wall Street Journal. Sports competes with ESPN. Mail competes with Gmail. He had seen that shape before, at IAC with more than 60 brands and at CBS Interactive with more than 30, including CNET, SportsLine, Last.fm, and GameSpot.
At CBS he tried to have every brand report to him, because his background was product, and he slowed the company down. He hired general managers who could run, and his job became their plans, accountability, and help where he could. Verizon-era Yahoo had one head of product, one head of technology, and one head of
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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. He still talks to Reed Rayman almost every day, five years on, and Rayman wore a purple hat that said Make Yahoo Great Again. Private equity wants an outcome, an IPO or a sale, not a company it holds forever. Apollo treated Yahoo as one of the few deals with asymmetric upside, rather than a standard playbook you just run, and hired a team that would not have joined to strip the company.
Jim calls himself a growth person. He does the turnaround to reach the part where you invest and build new things for a huge audience you inherited, and
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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. He worked up from product to CEO, the stock rose 50 times, and the company was sold to Barry Diller. He stayed three more years. CBS Interactive was the second. That group had bought public internet companies that were not performing, and he says it went from 70 million to 220 million unique users.
He had just done a version of this at Tinder, starting in July 2020, when the team barely met in person. Yahoo already had the hard part, traffic, and the products had seen better days after the Verizon years. He does not arrive guns blazing. The
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How Did Apollo Buy Yahoo From Verizon?
Jim Lanzone says he was not at Apollo when the firm decided to buy Yahoo. Verizon had bought AOL and then Yahoo, merged them into a company first called Oath and later Verizon Media, and a later management team decided it did not want that business. It took a few years to find a buyer at a price that worked. Reed Rayman, a leader of Apollo's private equity group, built a structure Verizon would accept. Verizon still owns 10 percent of Yahoo.
Molly O'Shea puts the price for AOL and Yahoo together near 5 billion dollars, in a range of about 4.5 to 4.8 billion. Jim says Verizon had paid about twice that for the two companies, and the mission inside Verizon was to help grow 5G rather than to ru
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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 pe