The Exchanges

Q was a quote from you saying that every single product, uh, needs work in, in Yahoo and you're going to work hard to revitalize the business. So like, it's interesting to hear the contrast, right? Like, Ranjan and I here are talking about like reading the stats and saying this is, you know, huge and underappreciated and you're like, this is a turnaround story. So can those both be true?

A Uh, well first, good to see you guys. Thanks for having me. I feel a little out of place. I don't have one of the big mics here. So a lot of plays here. Um, but, uh, I, uh, I do, I do think that they're actually both true. I've, I've said that before when, when, you know, asked about, Coming here and what was in the decision, it, look, it, it, it does have a lot of the trappings of a, a big turnaround. Otherwise, you know, given all the things Ron John said, it wouldn't have been spun out of Verizon at the price it was, which was around five billion dollars. Um, you know, for something that's still a top five property, probably has been top five every month, as long as the internet has existed. Uh, and if you had, if you, if you were to take the name off of it, I've said before, With this many users, this much revenue, this much profit, um, you know, what would that be worth? How would you think about that company? Um, at the same time, it, it's, it's been through the ringer, you know, over the, over the years, right? Um, a lot of time, uh, as a struggling public company, eventually sold to Verizon, spent five or six years there, uh, and, um, and so, but, you know, in, in a lot of ways, both things are true, um, and that's, that's part of what I love about it, and that's part of the challenge of it, but that's also why we're, we're, why we're humble about it at the same time.

AI assessment note: “I do, I do think that they're actually both true.”

Q So, but I guess like to, to me, is that, is that sort of your answer of like what, what doing, what running a successful business on the web today really requires? It's like both that content hook, but then also some sort of deeper engagement with the audience, uh, that goes beyond just reading the story.

A Yeah. And, and, and again, we're lucky to be in verticals and own products where we're not chasing traffic. You know, 86% of US internet users hit Yahoo every month. I think it's 36 We're 36.5 billion minutes per month just in the US. So there, I do think that that's common of every major consumer property, that there's a top of the funnel that you have to nourish. You know, you have to have users that to be deeply engaged. You have to have them coming in at a certain frequency, right? And I think those are the unique economics of the user side. We talked about the, the financial ones, and that really is, is making sure that you're, you're, you know, you're at the top of your game in, uh, In serving their user needs. And that, that sounds like, you know, cliche, but that's, that's absolutely the job. And over time though, that changes always. So you're never done. It's like, it's, you know, paying the golden gate bridge, which is why I actually think Yahoo can be around another 29 years. It's like the, the, the need, people's goals are not going away. And our first job is in the verticals that we already own to do an A plus job of delivering against that in the most modern, effective way Possible. And that's all the work, you know, I think that we're doing now. We also could, could very easily play in new verticals or, or go more seriously into them. Like in, if you look at the…

AI assessment note: “there's a top of the funnel that you have to nourish”

Q an investor in them is not very positive. I think like most people think that a private equity firm is kind of like comes in and vultures out all the potential profit. And then, um, you know, basically leaves the skeleton with all the money and that's the end of the company. Uh, what do you think about that? I mean, I think that's, wow, that was a different year.

A Friends of other private equity firms, definitely, they all have their playbook, and some of those playbooks involve what you're talking about. Some involve putting in their own people to drive their specific operational playbook. Forget just the reductions, but doing that. Um, and, and, you know, my own, my only personal experience with private equity has been my experience with, with Apollo, which has been great since day one, since my first conversation with them. Uh, through to them buying it and then turning around and recruiting me in to then the last two plus years working for them has been Great. I mean, again, we've, we've, um, we've been on the same page about the thesis the entire time. They've, uh, you know, it's, I should say one of the benefits for us has been that's one of the fastest returning deals they ever had. So, you know, we, we, we did a number of deals to sell things that, that we owned. Um, you know, we, we sold the seat. We had a CDN business that we then merged with another company to, to, uh, become a public company. We, um, You know, we, we've, you know, so we've returned a lot of cash to them that lets them invest in the upside here. So it's just been a different situation, I think. And then I think we probably have tripped them out a bit in our new team, uh, being proactive with, Making sure that we have the right size company, um, the right platf…

AI assessment note: “they all have their playbook, and some of those playbooks involve what you're talking about.”

Q worthwhile. Like Ben Smith wrote this whole book called traffic saying basically like his miscalculation with Buzzfeed was that traffic equals money. So you have all the traffic, um, you've had ad tech, right. To help make money off of that. And that's gone through a transformation. Um, but just from the fundamental level, like, can you still make money on the web and what is traffic worth these days?

A I think it's all a matter of perspective. You know, there's a difference between the trillion dollar plus companies and what they make. Um, and you can be a very healthy, thriving business at a different size company. And, uh, and you know, search is, I used to work in search for a long time and back at it now that that's one way of making money from a large amount of traffic ads are obviously another subscription lead gen. E-commerce. I mean, those are probably the main, the main five. Um, one of the big things that we have going for us, uh, is not only size, but also, you know, the majority of our impressions and our, uh, you know, are from logged in users. So we have a huge amount of first party data. People are coming direct to us. And so that's another, you know, big difference is that people choose Yahoo Finance. They choose Yahoo Sports. They choose Yahoo News and Mail. Um, and so, you know, we're not thirsty for traffic and out there trying to get it in unnatural ways. We're, we're lucky to have people coming directly to us. Um, you know, the days of, of when Yahoo was the one-stop portal is, is probably something to work your way back to if that were something that anybody, you know, uh, should be trying to achieve at this point. Um, you know, our strategy is much more to lean into our brands And, you know, we've hired general managers to run each one of these brands a…

AI assessment note: “search... ads are obviously another subscription lead gen. E-commerce. I mean, those are probably the main”

Q where your leadership of Yahoo is going to take this company and how you're going to actually push forward this, uh, this turnaround. So what is, what has happened since then? I mean, obviously we know that the properties are doing quite well, but like, what have you put into place since then? Um, from that August, let's say August, 20, 20 to me or fourth quarter, 20, 22 meeting.

A Well, um, one of the things about that is it was, it was definitely taken out of context. So, and the things that were done were actually part of the changes that we've been making. So last February we announced that, um, well, let's go back both Yahoo and AOL, which we also own over the years acquired 30 plus ad tech companies. And, um, and so when they came together as oath in, in way, 17 or, or, you know, whichever year that was, um, you know, those things were kind of munched together into one unified stack, which became the go-to-market, uh, for Yahoo ads at the same time. And that included native advertising, which is the old platform called Gemini as part of Yahoo.

AI assessment note: “things that were done were actually part of the changes that we've been making.”

Q How much more does it cost to generate a generative AI answer versus a normal search answer?

A Uh, you, you all know the answers. I don't know what the, what the real answer is. It's out there somewhere. I know it's a lot more. Um, so, uh, so yeah, I mean, I clearly look, it's already happening. Everybody's already decided it. And to your point and Brad Gerstner's point, uh, I've, I've seen to make a lot, um, you know, their, their, their margin is, is someone else's opportunity. And, and I'm sure that's gonna be a part of the dynamics of the category. You know, we're not, we're, we're not in that situation. And, and one of the things for me is focus and, and I can just focus on what I can control here. Um, where deploying those things and service of the user is, is a no brainer.

AI assessment note: “I don't know what the, what the real answer is. It's out there somewhere.”