Yahoo Is Striking Back | CEO Shares The Latest

Yahoo's never really stopped being a major force in people's lives. If you follow the Yahoo accounts on TikTok or Instagram, it will now feel like Yahoo. It is super funny, super relevant, and current. We hit 90% of the internet; we're the number 1 finance site, we're the number 2 sports site.

That's 100 million-plus users every month. And the company itself has had a lot of ups and downs. Being a struggling public company for a long time was part of what got Yahoo in trouble in the first place. But I've done some turnarounds before, and this place—the thing that was different about it was it just had great bones.

And then, at the end of 2022, nobody saw AI coming. And that changed everything. And the social contract of search, going back 25 years, that was all forgotten.

It's incredible. Last year was Google's lowest market share in the last decade. And things like that don't happen out of the blue. It takes seismic shifts in user behavior to cause things like that to happen. And I think we are still in phase 1, but phase 2 is going to be where the real magic happens.

And when we think about where to focus, we start first and foremost with—

Jim, Eric, it's so good to have you here. Welcome to the show. Yahoo! I mean, I remember Yahoo when I created my first email address back in 2008 or something, when I was running my little company. And it feels like Yahoo is restarting.

So super excited for today's chatter. Welcome to the show.

Thanks so much for having us here. It's awesome.

Thank you, thank you. Thanks for being a Yahoo user too.

Of course, always. Well, Jim, let's start with you. You know, the CEO of Yahoo. You have been around the ecosystem a bit, I think 25-plus years. Not going to put an age on you. I's roughly my age as well, I'm 28, so.

It's all good.

Let's just say it's the same kind of era.

Happily in my 50s now.

There you go. And you know, Yahoo is kind of like one of those internet darlings,right? And it seems it's now coming back. But I think it would be helpful for the audience to understand actually where Yahoo originated from, where it's been over the last few years, and where we are today.

What's been the journey?

Well, I would think of there being two journeys. One is the company itself, which has had a lot of ups and downs. And I think that's where a lot of the

thinking about Yahoo kind of comes from. Because on the product side, Yahoo's never really stopped being a major force in people's lives. It's if when you talk to people and they say, "Oh, yeah, Yahoo," they then will always go, "Oh, yeah, but I use Yahoo Finance," or "I use Yahoo Fantasy Sports," or "I have a Yahoo email address."

And these all are products with over 100 million users. In the case of Mail, it's hundreds of millions of users. And that's never stopped, really, through all the different issues over the years. If you go way back, Yahoo is the OG.

It was the first original guide to the internet that was built kind of on top of Netscape. It's like Netscape was the browser that let you get on the internet, and Yahoo was the way that you found where you wanted to go and what you were looking for.

And that was 31 years ago now. But I will also point out to you, Google's 28 years old, Amazon's 30, eBay's 30, Twitter just had its 20th anniversary, Facebook, I think, is 22, 23 years old now, so YouTube, 20-plus years old.

So most of the biggest consumer internet products have been around a long time. It's only about once every five years the new one, like TikTok or Snapchat, comes along and really shakes things up. So Yahoo, the product, has never stopped being super relevant.

Yahoo, the company, was one of the first to go public in 1996, was a public company for a long time, was bought by Verizon in 2017. And then we bought it at the end of 2021 with Apollo, the world's biggest private equity firm.

And we spun it out of Verizon and stood it back up as a standalone company. And that's when I took over as CEO.

Amazing. So you're four years in. And I can imagine, like any company going in for the first time, when it's a little bit restructuring, there are so many—it's like making a cake. There are so many probably ingredients you need to think about,right?

Take me back to that first week, first month. What was your mindset going into Yahoo where massive companies, 700 million users, and you basically needed to figure out, "How are we going to make this thing work?"

Yeah, well, the first thing was I was trying not to get COVID. It was the middle of COVID. I think it was Delta variant. And I didn't even get to meet most of the team in person for another nine months.

My direct team, we were going into the office in our various locations. But this origin story of the new Yahoo had to go through that first. So yes, we definitely did a big business transformation and turnaround the first couple of years.

But we had other things to deal with, not only spinning the company back out as a standalone company. A turnaround alone would have been hard enough. But to do it during COVID and through all these different changes, then you had a little bit of a crash in the ad market, the crypto market there at the end of '22, into '23.

And then at the end of 2022, nobody saw AI coming. That wasn't something that was on anybody's roadmap when we bought the company, and that changed everything. So we've had all these different things to go through already. And look, I've done some turnarounds before.

I've only done consumer internet in my 25-plus years. But I've taken over some pretty big internet companies that had been on hard times. And this place, the thing that was different about it was it just had great bones.

It had a huge user base, but it had the things that I kind of look for, which is products that seem better days, maybe ways of operating that seem better days, and a team that could be improved if you could bring in some world-class people to get into the—it's very hard to get an F1 race car on the track.

There aren't very many teams,right? And we had one. We just didn't have one that was winning. And so we can work with that. We brought in amazing people like Eric and others, and we got off to the races.

And so in '23, '24, '25, we started building again to become the company we are now, which is we've done the turnaround, and now we're taking some shots on goal.

I can really see this as an outsider. You're a lot more visible in the ecosystem if it's around consumer AI or just in general in the tech ecosystem,right? But again, I can imagine going back and restructuring. Was it just a case of, "These are all of our products," almost like the Elon task rights?

"These are all of our products. These are the ones not working, so get rid of them. These are the ones which have the biggest potential. Let's double down and focus on them." Was that kind of the mindset going in?

Mostly. I would say it's not even just not working. Because when you do a turnaround or you're starting kind of over, you have to choose. You have to focus. And you can't do everything. Great people don't grow on trees.

Your attention doesn't grow on trees. And great products don't grow on trees. So we had a content delivery network. We didn't have any business operating that. So we merged it with another CDN, and we spun that off. All through the year,

there were media products that we didn't really have aright to operate, like TechCrunch and Rivals and Gadget and others. We owned AOL because Verizon had also bought that and spun it out as part of us. So we're through that period now.

And I would say those mostly are awesome products or companies. They just didn't have—we weren't therightful owners. There were international markets that we had teams in, we were spending a lot of money in, we were losing money in.

And so that 700 million used to be more, but we actually opted out of certain markets that we were operating in because, again, you had to focus. So I would say it was more like that. And then how you operate the company also requires that.

And so the one trick to this is that we are a conglomerate structure. So think of us like the same way Meta is Facebook and Instagram and WhatsApp. We have the same thing. Even though they're branded Yahoo, Finance and Sports and News and Mail and Search, these are all very different businesses.

They have different competitors, different products, and how they operate. So what we had to do is restructure the company around general managers who are the CEOs of their business, preferably with an entrepreneurial background or product background or both.

And then you let them run their business. And they hire great heads of engineering and product and content and design. And you don't just go for efficiencies here. You actually want to go for achievement and greatness over efficiency.

And in the center, we do have that,right? There are central functions. And we provide leverage to those groups. But you got to let these guys run. And you can't have me telling them, "I love product. My background's all in product.

I love doing it." Eric will tell you that. But I let these guys run. And that's how we've been able to come so far so fast with the new Yahoo.

That's super interesting. And what I didn't quite realize is how big Yahoo is today. We mentioned the 700 million users,right? Multiple countries, probably every country globally. But the type of products you actually have is actually quite limited,right? So maybe, Eric, this is a good time to bring you in.

Eric Feng, the SVP and Head of Research at Yahoo. What is the current focus from a product standpoint? And maybe give some context around what you guys are focusing on today and where we're heading.

Yeah, great question. So Jim touched on this earlier where since day one, Yahoo's mission has been to be the trusted guide to the internet. If you look at the first version of Yahoo that Jerry and David launched 30 years ago, that'sright there on the homepage.

And we felt that mission has been more needed and relevant and necessary than ever before, given just how complex and big and scary and a part of everyone's daily lives the internet is. So that's really what guides us every day.

We want to be that trusted guide for our users. And when we think about where to focus, we start first and foremost with Yahoo users. We have hundreds of millions of people that love our products, and we want to give them the user experience they deserve.

So everything we create is to delight our users first and make sure that they're super happy. And then we would love to grow and onboard and expand from there. But first and foremost, what we build is for our existing users.

You know what? The beautiful thing about having 700 million users, when you want to launch your own product, it's very easy to get feedback pretty quickly.

Yes. And it's also great to get insights into what to build. So we study a lot of the latent behavior already happening on Yahoo to figure out where to double down, to figure out where to improve the product.

So that's incredibly important for us. For example, we recently launched our very first AI personalization product called MyScout. It is a personalized AI-powered homepage for custom homepage for our users. And really, one of the things that guided the development of that was understanding what users were doing with the Scout product and what they were searching for.

And we saw that they would often put the same search query in multiple times and run it throughout the day. They'd be looking up weather in my area or what's going on with the San Antonio Spurs, my favorite NBA team, or checking up on NVIDIA stock.

And they were using search as the interface to get access to that information. But they would come back and search over and over and over again with the same query. So we thought, "Hey, what if we used AI to actually provide that information for them in one dashboard, one homepage view so they didn't have to do that work anymore?"

So that was a direct feature that came from studying this latent user behavior that we can get visibility into because of our user base.

So explain MyScout. I tried it today, and I loved it. So my go-to tools most of the time, ChatGPT, obviously, Gemini, and Claude. And what I love about the MyScout product, visually, it's much easier. It's much easier to actually consume the information.

That was number one. And secondly, just more simple context around what's actually being said. ChatGPT is great, but there's so much overload of information,right? I found with MyScout, maybe you guys build this intentionally, it's a little bit easier to understand.

Yeah. Well, really, what we wanted to do was to make information easy and accessible to users because that's really what search is. Search is about information retrieval. We wanted to make that easier and accessible to users. And that's what MyScout has done.

But what's exciting is that underpinning MyScout is this new intelligence platform of Scout as a whole. So when we launched Scout back in January, it was both an end product that people could go to scout.com and ask questions, get great answers back in the similar way that they would go to ChatGPT or go to Claude or Gemini.

But Scout is also a platform. It is this intelligence platform that powers features and key components of all the flagship Yahoo products. You can find Scout inside of Mail, inside of News, inside of Finance. And I think what you're seeing with MyScout is us being able to launch new innovations very quickly because we have this intelligence platform that we're able to stand up.

So yes, it's a destination product, but it's also this platform that's going to be key to help us build new products for our users.

It's super exciting. A lot of companies are having this moment of, "What is your AI strategy?" Right? And the beauty for Yahoo is you guys are sitting on so much data.

Oh, we love it.

Jim, maybe a question for you around

the optionality of deciding to potentially launch your own AI model or deciding to go down the other route of being a little bit leaner, almost like a startup, and partnering with an existing AI model and just running your data for that.

Well, one piece of background is

for your audience who doesn't know our background, Eric and I both started in search. Eric at Microsoft, I was the head of product and then CEO of AskJeeves, which became ask.com, and we sold to IAC. And each spent a very long time in search.

I spent my first 10 or 12 years in search, had two startups in the space. And our team back then was the one that really pushed forward with structured data search and moving beyond 10 blue links 20 years ago, which is now what people are saying about what AI search is doing.

So we had some passion for this. Eric actually, I'll speak for him, he turned down the job running Yahoo Search in 2009 because he had already founded Hulu with Jason Keilar and was the head of technology and product there.

So we had other things to do. I spent some time in the streaming wars as well. So we had a passion for search. We had a knowledge of how to do search. And when we looked at this category, Yahoo had outsourced search to Microsoft since 2009.

But if you actually took a step back and said, "OK, search is changing. We're still a top three search engine. We have to deliver this product for our users no matter what." We could outsource it. But as we really analyzed it, we had all these amazing things internally, this data that was extremely rare and proprietary to us, our knowledge graph, our interest graph, our user data, our usage data, our thousands of publishers that we've had relationships with and sending traffic to and publishing their pieces for 20-plus years, our 30 years of search history.

And so all of that, Eric calls them our toys. All of that, if you were to apply AI technology to that, it creates incredibly both high-quality results that are both extremely accurate, don't hallucinate, and are extremely unique because that data is unique.

So if you underpin that, and Eric can explain how it works, but with the actual technology from large language models applied to our data uniquely, you get a new AI answer engine that has a reason to exist in the space, separate from everybody else, delivers an amazing set of answers to our users, and provides, as Eric described, this underpinning for all of Yahoo now with the Scout intelligence platform, where it is also delivering products in real timeright now to Yahoo Finance, Yahoo Sports, Fantasy Sports, News, Email.

That's live. That all went live in January at the same exact time. And we're just getting started. There's other products we're going to be building from here. So owning that is extremely unique, original. I think it's great for the enterprise value of Yahoo.

And I think, as we step back, it delivers the best answers that we possibly could to our user base.

Yeah, the experience that Jim and I always talk about is the product is uniquely and unapologetically Yahoo. And we think that that is a great benefit to our users because think of all the categories that Yahoo is one, two, or three in in the world.

It's one of the best news services, sports services, finance services, best weather service, like all of these great categories of content we are really, really great at. And what we want to do is bring the best of that experience into Yahoo in a very uniquely Yahoo way and offer that to our users.

And if we think we do that, it's actually not only differentiated from what you see elsewhere in the market, but also something that we think is better for our end users.

If you look around the category, they all kind of look the same. They act the same. The answers are very similar because the way they were created was very different than what Eric did. They sucked in the entire internet without asking and digested it and are spitting back out predictions of the next token.

And they all work that way. And from the originals, then Google kind of, you know, I think they probably would have done a different UI if they had been first. And having done the Transformer paper, they probably should have been first, but I think they were kind of caught by surprise.

They then had to chase the UI of everybody else. So you go back, and I don't know that the default chatbot AI answer engine experience is what it had to be. It's certainly they're all pretty much generic at this point.

And I think from that point of view, not only are our answers unique, our UI is extremely unique, and I think we think extremely valuable. This is the product of our dreams that we wanted to build and I think is a useful entry to the category that way.

And let's not forget this whole AI category, it's three and a half years old,right?

Right, I agree.

ChatGPT launched November the.

Super agree.

30th, '22, and we're still like 1% of the way there.

Yeah. Well, that's why I also we were very passionate from the beginning about not only building all these products we described, but there was one other thing that happened when the original AI chatbots came out, which is that they all not only did they look alike, but they all looked like research papers originally in the way that they responded.

Now, they responded trying to also act like fake humans. But in the results were like these source footnotes that were really like source citations. And so in the process, all the places that they got their answers from, known as the open web, which was created by publishers who spent real money to create that and had businesses.

And the social contract of search going back 25 years has been, we will take your snippets and your links, and we will link back to you. That was all forgotten,right? And so just because we're going beyond 10 blue links doesn't mean you have to forget the blue links.

You actually need to link back to them because not only is it important for the future of the open web so that we can keep getting all these great answers in this new format, but also it's great for users to be able to see the sources very easily.

And the way Eric built it is genius in terms of the rollovers and being able to kind of see before you click and all that. So we want to actually send traffic downstream to publishers. And to your point that we're only three and a half years in, I hope that the industry evolves to where we all do that, that everybody is sending traffic back down.

Yeah. I think this whole what does the future of search look like,right? I mean, before this ChatGPT thing came out, all of us just used Yahoo or Google,right, I guess, as the main two players. Now, everyone's got their own stack.

And I think it was the founder of Cloudflare who was talking a lot about this around how are publishers like us, for example, going to be compensated at some point if all of our data and information is going to be consumed in these AI models, but we didn't get cited at all.

And that's actually what I loved about MyScout was around being cited in a really easy and clear way

over maybe over some other AI models, should we say.

Totally. And we do it partly because there's some self-serving that's useful. We are a large publisher, so we want to it does benefit us to continue to support the publisher ecosystem as a major publisher. But most importantly, we do it because it helps users.

By having a healthy open web, the answer quality is going to be better because publisher content and folks that create great content like yourself, that is putting interesting, unique knowledge out in the world that helps really inform and make answer quality better.

So the idea of a closed ecosystem without a healthy publisher content being created every day without that vibrant publisher ecosystem existing, it's very, very bad for AI. It's very, very bad for answer engines. It leads to really bad quality.

It leads to a really poor user experience. So we do this not because it helps just our own interests, but really, we believe that this is fundamentally helpful for all users.

Totally. And like we said, three and a half years in, have you guys been surprised just how quickly this whole AI category has advanced in literally a matter of, what, 1,200 days, 1,300 days?

It's incredible. Yeah. I mean, if you think just about search and information retrieval, last year was Google's lowest market share in the last decade. And things like that don't happen out of the blue. It takes seismic shifts in user behavior to cause things like that to happen.

And that's what's super exciting. I describe myself also as a recovering investor. I spent some time as a VC. I know that you've overlapped that world very closely as well. But as a recovering investor, one of the great things I always bring forward is this idea of looking out, just always trying to find user behavior shifts because anytime user behavior changes, even if it changes just like one degree, it opens up tremendous new opportunities from a product perspective.

So that's what's so exciting here is that AI has started to cause this user behavior shift, and it is opening up entirely new opportunities. And for something like search, that shift is even more profound because if you think about it, for the last three decades, the search product has really just been two things.

It's users input keywords, and users get blue links in return. That's kind of been the product for three decades. And what AI has done is fundamentally disrupted all parts of that product description. Users aren't just entering keywords anymore.

They're having full natural language conversations with their answer engine. And they're not just getting blue links back. They're getting dynamic, generative results that are a combination of natural language. You could get speech back. You could get fully rendered images and charts back.

And it's just a completely different product experience because of AI. And that shift in user behavior is so, so exciting. That's why we're all here.

I would also say, though, that in search for sure, in engineering and design, things like that, for sure. At the same time, in the initial kind of big bang of AI, a lot of companies on the consumer side tried to force it down user's throat, and users were rejecting it.

They didn't want it all over LinkedIn. They didn't want it all over their email with Gmail asking if you wanted to rewrite your email in Polish. Oh, wait, no, it was Polish. And all these things were like shoved into users' faces.

And I think it created a little bit of a backlash, especially among younger audiences. So I actually think

it really is important. Product managers actually played an underrated role in the history of all this, and they got shit on a lot on Twitter over the years. But it is extremely important. And so I think we try really we have tried really hard.

We did a lot of that, too. We kind of went overboard in email and some other places at first as well. But if you kind of got way more disciplined about where you were deploying AI features for consumers, things like I mean, this is a great example for me is the assistant general manager in fantasy sports.

You press one button, and it helps you set your lineup or tells you which free agents to pick up, which in football, maybe you do it once a week. It's not a big of a deal. But in baseball and basketball, where there are so many games and there are so many things you have to keep up with, that's super useful.

Or yesterday, one button to say why was the market going up so much during the day or this particular stock, like what changed about the stock. So I think you have to be disciplined about how you deploy it.

And the industry is getting better and better at that over time.

It's just crazy. I mean, we cover all tech trends,right? I mean, if you look at what's happening in health care, wherever you are in the world now, if you're in Africa, Southeast Asia, as long as you've got an internet connection, you can speak to the best doctors in the world for a fraction of a price.

We just did this big piece around longevity. You can now go and have a full health check-out for like a couple hundred dollars that never used to happen before. Teachers, kids being educated in schools, they can now have AI teachers.

Not sure if that's a good thing or not. I mean, it's just moving so quickly. I think is it are we in an AI bubble? Maybe slightly, but I think it's just crazy just how quickly this whole category has shifted.

So there's this book that was published maybe 10 years ago. It's called "The Rational Optimist." It's by Matt Ridley. And he has this concept that he calls prosperity. And that he defines as how much increase in the goods and services you can buy for the same amount of work.

And the analogy that he uses is that like in the 1800s, if you worked an hour, you could buy about 10 minutes of reading light. And today, if you work an hour, you can buy about a full year of reading light because you're just more prosperous.

And part of that is that it's much more efficient to generate light. Part of it is that your earning potential is a lot more. But all those things work together to make you more prosperous. And as an engineer, I think AI is making builders more prosperous than ever before, which is super exciting.

And it's really a continuation of a trend that's been happening over the last couple of decades. When I was back at Microsoft working in the research org, I remember helping out with some technology that went to SQL Server, which is a really expansive product.

And at that time, it was held up as an example of efficiency at Microsoft because it only took a couple hundred people working for two and a half years to launch that product. And fast forward now, because we're more prosperous, you can launch things in a matter of weeks with a couple of people.

And that is really the trend that we are seeing in technology. But the last bit that AI, I think, has also helped us really accelerate is that it is one of the first technologies that is truly accessible by non-technical people.

Everyone is now a builder, which is so, so cool. We're democratizing access to technology. And we see that benefit tremendously internally where some of the best features have come from our designers or our PM that decided to go and just build something.

And I just can't wait to see what innovations come out when not only are we more prosperous, but access to that prosperity is open to everyone.

It's almost like we have these magical moments in tech where we have to go all in,right? And having AI available now to all builders is amazing. But also internally for teams like you guys,right? One question is around team sizes.

Now with AI, team sizes don't need to be as large anymore. How are you guys thinking about that? And maybe a second part of the question in which one of you can take is around if somebody has an idea and they want to launch something within Yahoo, if it's like a new feature, a new product, how do they go around doing that?

Great question. I could take that for how we think about it in search. But the team size one is probably the easiest to figure out because that just naturally balances out. You have a specific amount of work that needs to get done.

And what we just organically find happens is that as people become more productive, you just organically have less people to finish that task of work. So team size is one of those things that almost like the overall force will constrain it to theright size.

So that is something that just happens organically, which is exciting. The thing that doesn't happen organically that I'm really, really focused on is really the composition because I think the bias in the last 20 years is to find the most technical people.

And if you think about the startup ecosystem that you, Jim and I, are so passionate about and spent time in, the best historically, the best products have been built by very, very technical people. The best food delivery company in DoorDash was built by a bunch of engineers,right?

The best music service in Spotify was built by a bunch of engineers. The best hospitality marketplace in Airbnb was engineers that created that. And at that point, it was that technical expertise was the requirement. It was what everyone was looking for.

And then domain expertise was optional. That was like the nice-to-have. And I think the exciting thing about AI is that it can slowly start to make technical expertise not a requirement. It can make it optional. But

kind of the opposing force to that is now domain expertise is what's really important and really valuable. So that's the team strategy part that we're always focusing on. On the search side, the folks that we have working on finance searches, I want them to be finance experts and finance geeks and love tracking finance trends and having deep domain expertise, not just search experienced veterans and understand things about semantic entity extraction and machine learning.

And that would have been the bias many years ago. But I think now, because of AI, because of the new ways that we can build, all of a sudden, I can take care of that for you. If you're a finance expert, I can make sure that you have the tools and the technical capabilities to build what you want.

But if you're not a finance expert, you've got to become a finance expert. You've got to have the domain expertise now. That is this new skill that is going to be so valuable in this next iteration of AI that you need to learn in order to be proficient and be able to be efficient and understand users.

The word that we actually like to say around that is proximate. So we're constantly looking for builders that are proximate to the problems that they're solving. And I think that's one of the big changes that's happening now.

I also think

one of the most challenging aspects of running a large company, maybe like Yahoo, is around not that everyone has an interest in AI, not that everybody wants to become an AI expert,right? How are you providing those opportunities? But how are you providing that education actually to the wider

team base?

One of the

interesting cycles are always around centralization and decentralization. Back in the streaming wars that Jim and I were in, you were unbundling everything, and then you had to rebundle all the kinds together. And we went through this period at Yahoo where we definitely unbundled.

We decentralized everything into these GM structures, and we had all of the product roadmaps sorry, all of the product teams in their own product portfolio building on their own and innovating and moving fast, which was great. But the challenge is that now we have some silos.

We have groups that have really embraced new technologies and tools and are farther ahead with it, and then other groups that are trailing. And it's because they're operating with their business in mind and kind of at whatever pace and making the decisions that they feel likeright for the business.

But there's not so much this overarching guiding hand that can help apply best practices from across the company. So what we started to do is now create centers of excellence. And we do it from a very functional level.

So for example, on the engineering side, we bring together all the engineering leaders across all the different BUs every week. And we share best practices, things like interviewing. We even do an interview council for senior-level hires to make sure that we are level setting engineering quality and skill sets across those senior-level hires.

Yes, we still want sports to be able to move fast and hire whoever they want. But if they want to hire a senior person, it needs to be level set across finance and news and mail and search. And that's what this council can do.

And starting about a year ago, a standing agenda item on that council is AI adoption. It is just the very first agenda item. Every single time we meet, that's what we talk about. And that's been really, really helpful because, again, the idea of decentralized business units does allow a lot of innovation to flow.

But you need a way to get that innovation and those ideas across the entire company. And that's what bringing these groups of leaders together has been able to help us do, which is super, super cool. So things like, hey, Codex versus Claude Code, what's the best IDE with Cursor?

I just found this awesome integration where we can have an agent go and read through Jira and actually figure out what are interesting tickets. And they go file a pull request for a fix that they did. And then an engineer can come and review that.

All of a sudden, you're not only just building on sort of autopilot. You're actually fixing on autopilot, too. So all these best practices that used to be very siloed, we are now being able to bring them across the entire company.

And the thing I will add to that is that we are fortunate in that Yahoo didn't overhire during COVID. We're actually down almost 50% in headcount from when I started, largely because we sold businesses or shut down businesses or territories that we didn't need to be in anymore.

And we're very profitable. We're doing great in our growth on revenue, and we're doing great in our growth in EBITDA and profits and traffic. And so Yahoo as a business is doing really well. So therefore, we don't have any mandate at my level to say, go cut headcount and blame it on AI or do it because of it.

That's really where we're at is there are now a bunch of Iron Man suits sitting around for people to go use. And you were asking, do we train everybody? I'd also say we also tell people, well, they're sittingright there.

You should also be trying them out yourself because I can't think of a job function at Yahoo where that would not be useful. Engineering is the main one, the best one, but it's not the only one. And look, if it used to take 10 people to do something, that now with AI could be done by two people or three or one.

We're not going to keep doing it with 10 just to do it. We are going to reduce down to what's needed there and then redeploy those people. I'm sure not every job function will be able to be redeployed.

But we're going to be able to make that choice over the course of this year to figure out how that will work because the one thing that is absolutely true is that the game has changed. The way that companies in our space build products, which is the name of the that is the main thing that we do every day here, and then maintain them, distribute them, market them, account for them, support the people who are building them, all the things a company does, every single part of that has now changed versus the last 25-plus years that I've been doing this.

And so we are very aware of that. We are, to Eric's point, we are actively at the exec team level pushing that through all of our divisions, all of our squads who are building these products. But we're not on some deadline to do it.

But I do think it all happens over the course of this year.

The next one or two years, I think it's going to be not just Yahoo, like all of these companies,right? Especially those who overhired during COVID. And let's be honest, that was a lot of tech companies,right? And you're seeing a lot of layoffs now.

What's the size of Yahoo now in terms of employee count?

Thousands, but we don't say how many.

OK.

But because we are yeah, it's in the thousands. But

we are private again. That's been one of the greatest things for our ability to not only do the turnaround, but to push a new investment and shots on goal. I think being a struggling public company for a long time was part of what got Yahoo in trouble in the first place.

And I have a lot of empathy for the people who had to run it in that situation. We had the benefit of taking it over as a private company and being on the other side of all that. So that includes us not disclosing what our revenue is, our employee headcount is.

But I'm sure that day will come.

Exciting. And while Jim is very disciplined, he's also incredibly ambitious. So even though we have thousands of people, he's given us work for millions of people. So there's no shortage of things that we need to build. And I'm looking efficiency is good for me because I'm always underwater in terms of trying to meet his expectations.

Hey, that's what a good CEO does. And you've got to reach those goals. One thing I found so interesting is so many of your users are pretty young. Gen Z, millennials, kind of like my kind of demographic. And just from hearing this story today, I feel like one of the biggest opportunities if we phrase this as this almost like the restart,right, the rebirth of Yahoo as you continue to relaunch all these new products.

As soon as you start having one touchpoint, you launch like Scout. That's like two or three touchpoints a day. You've probably got a whole bunch of other products in the pipeline. As soon as you get to, I don't know, five, six daily touchpoints, I mean, it becomes like some of the it becomes similar to some of the other AI tools out there,right, or consumer products we use on a daily basis.

Yeah. I mean, look, one reason why we are so heavily we're 50% millennial and Gen Z. And I do think that surprises people. But if you actually go one step deeper in how you think about it, it makes more sense.

First of all, we hit 90% of the internet. So you're going to hit every demographic. OK, so then why are we hitting 90% of the internet? Well, we're the number one finance site with over 100 million users a month.

We're the number two sports site most months, number three some months, but number two most months behind ESPN. That's 100 million-plus users every month. And a lot of those are very dedicated Gen Z and millennials because if you're going to start tracking your stocks or you're going to start playing fancy sports or all the new games that we've developed over the past couple of years, you're going to use Yahoo.

So we hit them. Yahoo Mail is growingright now, especially with that audience. I think our brand has something to do with it. We're kind of catching a good moment as a modern vintage brand that started in the '90s.

And there's some kind of cachet to the brand now in a way that we've kind of earned over the years. And I would put that more in the bucket of like a New Balance type of a brand or Adidas type of a brand that people are returning to and take pride in using.

But you can't have that if the product isn't really good,right? Eric is world-class at building products. Well, so is Kyle Miller, who's building email. So are Ryan Spoon and his team is building sports and finance. And so these products are great.

People are returning to the brand. And we're one of only in these categories, one of the only participants,right? So if you're not going to use Gmail, which is boring and everybody has one, and you start to use Yahoo Mail and be different, the product actually is really good.

And so we're the only other consumer brand on the personal side. We don't compete with Outlook and Gmail on the corporate side. By the way, that's also led their products to being kind of corporate feeling. Even on the personal side, Gmail feels very corporate now.

It is part of the Google Cloud group. So that makes sense. It's more focused on corporate because that's a much bigger audience for them. But we don't have to focus on going from trillions to more trillions in our market cap.

We're smaller, and that's OK. So that's how we get to those audiences. I will say this. And today, you know I know this won't hit today, but I don't know if it's OK to say today's April 1. And as one example, we have this amazing social media team.

And people in the industry love this team. And if you follow the Yahoo accounts on TikTok or Instagram, it will not feel like Yahoo. It is super funny, super relevant, and current. And today, we launched the Yahoo Scroll Stopper, which is this funny April Fool's joke thumb guard that prevents you from scrolling.

And that's going viral. And so we did an ad for Yahoo Mail's new product called Planner, which is an AI product that extracts actions for you to take. We did an ad with Cardi B that hit last week.

And so if you cumulatively do all these things, you're making the brand relevant and fun again. I think if you didn't have trust and history of delivering, you wouldn't be able to do it. But luckily, we have that, and we're trying to take advantage of it.

You also did a super cool Super Bowl ad for like 15 minutes sorry, 15 seconds,right?

Seconds, yeah. Yeah, with Bill Murray. And that was last year's. But that was done 15 seconds, and we only bought it locally. So even when we did a Super Bowl ad, we did it kind of guerrilla style. And it just pushed you in kind of a mystery to an online experience for more videos with Bill Murray that and you got to email back and forth with him using Yahoo Mail that people found very cool.

It was the fourth most watched Super Bowl ad on YouTube, even though it was only 15 seconds at halftime. I'll attribute that more to how much people love Bill Murray than us. But he kind of took us under his wing.

It was only the second ad he's ever done. And he just kind of took us under his wing. And we love Bill. He's been awesome to work with and stay in touch with.

Yeah, keep in touch with him for sure.

OK, so it feels like you have such an amazing opportunity,right? And I feel like once you are in this position, you could burst with so many ideas,right? But what does the next five years look like for Yahoo? And what is that kind of way you're treading towards?

Well, let me start because I think the way Eric answers this answers it for the whole company, which is we only have finite resources. Now we have the Iron Man suits, so we can do more with less. But there's still going to be a natural limit to how much we can really launch.

So it's always whether you're Apple and Google with trillions of dollars of market cap and hundreds of millions of expense and

hundreds of thousands of people, I have friends at those companies who complain about lack of resources. You always have a limit. So you're always going to have to choose. The consumer is the guiding force for all of that.

We are a really up-and-coming player in the advertising side, too. We have one of the world's best ad tech platforms, and we are on the rise there, too, on the basis of our user data and how well we convert.

But everything good at Yahoo starts with serving the consumer. And so the way that we do that is not me with like Moses with the tablets coming down and telling everybody what to do and how to behave. It's actually more we hire great people and put them in charge of these products, and they drive those roadmaps.

So I would say Eric's answer to the next five years is one example of how we would think about that.

Yeah, and I think you hit on this earlier, which is as things like Scout are integrated across all of these amazing touchpoints in the Yahoo ecosystem, we can define success simply by serving our users better. And that's an advantage of being a brand that's beloved with this user base.

Back in my startup world, you had to fight and crawl for new users every day, and you're always chasing the new. And the benefit of our position is that we have this family of users that have stuck around, that find tremendous love and joy and value out of our products.

And we can define success simply by serving them better and changing their interaction from once a day, to twice a day, to five times a day, to once an hour, to continuous, to obsessively checking. And if we do that, it is going to be a huge success in everything that we build.

So it starts first and foremost, again, with just delighting our existing Yahoo users.

Well, let me then

prod him one bit, though, to get you, which is we launched Scout in January. It's awesome. I hope everybody who's watching this goes and tries it. scout.com, also available all over Yahoo. We had amazing reviews. Like, the critics loved it.

We had great articles about it. But we're just getting started. It's in beta. We're only two months in. We're improving it. Step two was personalization. And I would prod Eric a little bit on the next step of thinking about how it goes proactive on the agentic side.

Yeah, great flag there. It is still so early in terms of the evolution here. But what's really going to define our product is Jim talked about this earlier, but the toys that we have. To make this uniquely Yahoo, we have such incredible toys that we can build with.

Just little things like Scout can understand the difference between asking about

NVIDIA stock and NVIDIA stock movement. That one little word changes the user intent of what they're looking for. In the first one, they're looking for a number. In the second one, they're looking for a reason. And that understanding is built upon a system of query intent that we've been machine training for decades now.

And that is a toy that I get to play with, and I didn't have to go build from scratch when developing Scout. So we have all of these great technology and data assets that we're going to apply forward to help us achieve our goal of building this trusted guide.

But as Jim likes to remind us, the goal is two parts. It's a trusted guide that helps you accomplish your goals. And I think we are still in phase one of just building that trusted guide. But phase two of helping you accomplish your goals is going to be where the real magic happens.

It's a magical experience today to get information justright at your fingertips. But the next set of magic is when that information is actionable, when you can not only get recommendations about interesting updates on football players, but hit a button and automatically set your fantasy football team, when you can get awesome recommendations from our lifestyle team about interesting places to visit, but then hit a button and book a trip.

So those agentic actions that then help you accomplish your goals, you're going to see a lot more of that type of experience start to roll out in the second half of the year.

Wow, super exciting. I mean, just hearing the story over the past hour, you have 700 million users, Scout's only two months old, all these crazy cool things you're going to do. I think this is a super underrated company to watch.

And I'm super excited for you guys.

Thank you so much. Yeah. That's how we feel, too.

We'll see where it goes. But hey, to wrap up the episode, we always finish the episode with some quick-fire questions. So I'll say the question. You guys can just answer each of them. Sound good?

Let's do it.

So let's go for the first one. Which is your favorite consumer internet companyright now, apart from Yahoo, obviously?

I'll go first. I'm a Discord junkie. Love Discord. Miss it. We use Slack internally, Yahoo. I wish we were just all on Discord all the day.

For me, it's all the different parts of my daily life,right? It's Spotify. I'm a massive curator of Spotify playlists. I'm a very deep music person. And so I'm always on there. My hack for flights I'm on the road all the time is just downloading shit tons of YouTube videos.

I also you know, again, we each build streaming services, so we're also downloading a lot of those. But DoorDash, your normal thing. I mean, it's amazing how much of my daily life is spent in these apps that are all on my home screen my first page of my home screen.

Yeah, I love that. There are so many AI tools out thereright now. Which is your favorite?

Waymo.

I mean, once you try it, you kind of especially in LA or San Francisco, you just can't imagine driving any other way. It changes your life.

Recently, I love 11 Labs. So much fun to clone voices and play with that experience. And I think that speech has again, if you think about search evolving behind just inputting keywords, the idea of multimodal inputs and multimodal outputs is super exciting.

So huge fan of what they're building over there.

You know, I was in when I was last in SF, I took my first Waymo, and I went back home, and I showed my family, and especially my other family who are slightly older. And they're like, what the hell?

This is like.

I love my initials on top, the peaceful music when you get in. The other underrated thing about it is I noticed this. It took me like five rides to realize I was never looking at how fast I was going anymore.

If I'm driving, I'm going 10 or 15 miles an hour over the speed limit at all times to weave through Los Angeles to get to something. And now I was just in the back saying, oh, it's going to get there at 8:58.

OK, let's be on my phone or make calls.

Being able to pair and just basically getting like a traveling sound booth is amazing.

Yeah.

That's my favorite thing. All they used to do is, if they've removed the driver seats, and you can make it into.

Like a park a lounger. You can just like.

Is anybody sitting in front? I never sit in front.

I don't think you're allowed to anymore. I'm not even sure.

I was a tall person, and I don't like I always have to reach in to make that seat go forward. You'reright.

Yeah, there you go. If you were starting a company today, we're all in this startup game. If you were to start a new company today, what type of company would you build, and what category would it be in?

I mean, I'm going to take the easy way out on this and say that you've got to realize how many categories we're in here. It's very hard to think about a different one that we're not trying to go after.

We're trying to reduce down, not grow that.

I love commerce, and I love fandom and collecting. So I think something in the collectibles area would be an area that I'd be super excited to hop back into.

Wow. Maybe at some point. But hey, I feel like this could have gone for hours. But Jim, Eric, this has been amazing. Thank you so much. And can't wait to see where Yahoo goes next. And I really think this is a really exciting company to watch.

Allright, thanks, man. It was great to be here.

Fantastic. Thank you so much.