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

Jim Lanzone (0:00)

Apollo has been one of the most prolific deal makers of 2021

Molly O'Shea (0:03)

Private Equity, Powerhouse. Apollo would be acquiring Yahoo from Verizon for $5 billion.

Jim Lanzone (0:09)

Yahoo is one of the most iconic brands in internet history.

Molly O'Shea (0:12)

This is a legacy brand.

Jim Lanzone (0:14)

The original sin of Yahoo was giving search away to Google in June of 2000 There's this myth in the internet that they were defeated by Google because they took their eye off the ball, it was worse than that. They outsourced it. Yahoo hadn't had its own search engine 17 years.

Molly O'Shea (0:27)

So where does most of the audience come from?

Jim Lanzone (0:29)

Yahoo Sports, over 100 million users a month. Yahoo Finance, over 100 million users a month. Yahoo Mail, one third of all Americans have a Yahoo Mail account. So all those things fit together are what add up to 700 million users a month. There are companies that are valued more than us, who have less than one tenth of one percent of our user base. I really believe that the best days of Yahoo can really be ahead of it. I think now we're in comeback phase.

Molly O'Shea (1:02)

Jim Lanzone, welcome to Sourcery.

Jim Lanzone (1:04)

Awesome to be here, Molly.

Molly O'Shea (1:06)

Well, I know you're traveling all around the world. So thanks for making this stop over here in LA.

Jim Lanzone (1:10)

I know, we made it work.

Molly O'Shea (1:13)

So you're here for the Snap Board meeting?

Jim Lanzone (1:15)

That was, yep, that was why I was in town for this. Came straight from Aspen at the Forbes CMO Conference, and I'm on my way to Amsterdam next week for HumanX. So this is just that time of year, back out of the summer, right into it.

Molly O'Shea (1:29)

I understand, it's like back to school.

Jim Lanzone (1:31)

Yep, 100%.

Molly O'Shea (1:33)

Well, I'm so excited to talk today about everything Yahoo and the legend behind Jim Lanzone.

Jim Lanzone (1:39)

Oh, geez.

Molly O'Shea (1:40)

Because there's a lot, there's a lot going on there. So, but I think it would be great to start off with Yahoo, because Yahoo is on a tear.

So, back in, I think it was 2021, that's when Apollo bought Yahoo from Verizon, and Verizon sold off a couple assets, it was AOL and Yahoo. So, that was around 4.5, about 5 billion?

Jim Lanzone (2:04)

A little more, a little 4.8 billion.

Molly O'Shea (2:06)

Okay, so it was nearly, for nearly $5 billion, bought the assets. So, could you walk me through that? What was that process like?

Jim Lanzone (2:15)

Well, I, I mean, at the time, was more, you know, I was somebody that they called in the process of deciding to buy the company.

So, I, you know, I wasn't part of Apollo then. I left another job to come do this, which we talked about, you know, why I did that. But, yeah, look, the history was that Verizon, under different leadership, had bought AOL, and then a few years later, Yahoo. They merged them into one company that was first called Oath. They then changed that name to Verizon Media, but it was all those assets under one roof.

And then the new Verizon management team decided they didn't want to be in that business anymore. I think it took them a few years to find the right buyer at the right price. But Reed Rayman from Apollo, one of the leaders of their private equity group, got in there and figured out how to construct a deal that would work.

Molly O'Shea (3:03)

So what was the construction of the deal?

Jim Lanzone (3:06)

Well, it was, you know, just the ability to actually get the right framework for Verizon because they wanted to maintain some ownership, which they did. They still own 10% of us.

And, you know, and then have a vision for what this thing could be going forward. You know, I think combined, they were bought for about twice what we bought it for. So, and during that time had really had a different mission than I think either company had ever had before. It was really to help Verizon grow 5G and be a part of that. A lot of the decisions were based on that and not really the real mission of what Yahoo itself was about. So, look, the company that was set up was a brand new company. We are a five-year-old company managing a 30-year-old brand at this point. But it was a completely new company, stood up from scratch to house these brands under one roof, which closed in September of 2021 They bought it in May of 2021, it closed in September of 2021, and I started about the end of the month of September 2021 So, it's been about exactly five years for me.