After a revolving door of CEOs, strategies and even names over the past decade, Yahoo Media employees expect this time to be a coincidence.
Apollo Global Management, which bought Yahoo from Verizon Media in a $ 5 billion deal it closed last week, on Friday appointed Tinder CEO Jim Lanzone as Yahoo’s new head.
Some employees are “calmly pleased” by Lanzone’s appointment, a person with knowledge of the matter told The Post. “Finally someone who knows the media,” said another employee about Lanzone taking on the role of CEO.
But when Lanzone, who replaces the current head of Yahoo Guru Gowrappan on September 27, begins his new role, he will receive a staff of 9,000 workers, who are largely hit by the change in strategies and multiple owners during the last decade.
Employees are afraid of the cost-cutting reputation of the privately held company, and some have already left in anticipation of the cuts, employees with knowledge of the issue say.
But at least some Yahoo employees (formerly known as Verizon Media and earlier, Oath) take Lanzone’s appointment as a hopeful sign. They say it’s an indication that Apollo will actually invest in the conglomeration of web assets that include missing Yahoo websites but still generate traffic.
In a statement to The Post following Lanzone’s appointment, Apollo partner Reed Rayman emphasized that the private equity firm wanted to position Yahoo for “long-term success”. He called Yahoo’s existing employee base “talented.”
“Apollo made its investment in Yahoo to strategically grow the business, expanding and enhancing the user experience across some of the industry’s best-known brands,” Rayman said.
However, since the announcement of Apollo’s acquisition in May, some of Yahoo’s top talent (property owners like Yahoo, Yahoo Sports, Yahoo Finance, Yahoo News, TechCrunch, Engadget, Autoblog, and AOL) are already jump.
Highlights from the past month include Yahoo News journalist Jenna McLaughlin, Yahoo Finance anchor Myles Udland, Yahoo Finance anchor Kristin Myers, and Autoblog and Engadget leader Adam Morath.
In a note to employees obtained by The Post on Friday morning, Lanzone appeared to be trying to calm fears by stressing that he plans to make investments, not cuts.
“Many of you have worked together for a long time, you have had incredible success doing it and you have well thought out plans to grow our brands from here,” he said in the note. He said he was not looking to “create change for the better.”
Some people close to Apollo have told The Post that the private equity giant “will clearly destroy all business.” Yahoo is “ripe for a drastic reduction in costs,” people said.
But people with direct knowledge of the issue counter this narrative and say the private equity firm wants to drive revenue growth.
“Jim Lanzone is the beginning of a real resurgence of Yahoo,” a person close to Apollo told The Post. “The worst thing Apollo could do is strip the business to the bone.”
People close to Apollo say the firm believes it can increase revenue by investing in higher quality content. The company will hire new people to create new verticals or sites focused on specific content areas. One of the most successful companies, Yahoo Finance, could even become the “Bloomberg for retail investors,” said a family member.
Yahoo declined to comment.
People with knowledge of the issue see that closing the Yahoo deal is an inevitable end to a business model that they believe never made sense, run by owners who are not the media and who never “go get ”the media business.
Verizon, which completed Yahoo’s $ 4.488 billion acquisition in 2017, said at the time that the deal would give the media company scale that Yahoo did not have on its own. Verizon CEO Tim Armstrong, who joined Yahoo’s properties with AOL and, in a very mocking move, renamed it “Oath,” said, “The strategy behind the deal is to really go after mobile and video and many of the global services – the services available to AOL and Yahoo – on a large scale ”.
Yahoo management said they hoped to compete in digital ads with Google and Facebook. But since then, the idea of merging content with distribution has been largely considered a failure, as illustrated by the dissolution of AT&T and Time Warner.
For Verizon, which had a market capitalization of $ 215 billion in 2017 (its market capitalization is now $ 227 billion), it was a relatively low bet. And the company was quick to admit it was a failure: in a 2018 application to the SEC, Verizon reported, the deal had generated lower-than-expected profits.
This link was followed by an effort by excludia Marissa Mayer, who Yahoo contributed to Google in 2012. She outlined a vision of Yahoo that provided “a source of information that is requested: a web neat for you, [that] it’s also available on your mobile phone. ”The vision failed and he left the company in 2017.
Meanwhile, some employees say they have been stuck in the crosshairs of changing priorities. After closing the Verizon merger in 2017, Verizon laid off 2,100 employees. According to numerous reports, Verizon has continued to shell people out since then.
Former reporters from Verizon’s media conglomerate told The Post that Verizon never owned a company that owned news sites, but that management was generally kept out of the way news was run. They don’t expect Apollo to have a better formula.
“Having all these brands under one roof never made sense,” a former editorial employee told The Post. “It never made sense when AOL ran it or when Verizon ran it … why would it work when Apollo runs it?”
With Apollo at the helm of the companies, some experts say the private equity firm will eventually split the business, keep Yahoo Finance and Yahoo Sports and sell the other assets.
According to the Wall Street Journal, this is what Lanzone is looking at when it comes to Yahoo properties. On Friday, the newspaper reported that Lanzone plans to build Yahoo Finance and Yahoo Sports, as well as the company’s advertising technology business.
Rich Greenfield, an analyst and partner at LightShed Partners, noted that one of Yahoo’s most appealing parts is its fantasy sports leagues. He commented to The Post before the news of Lanzone’s appointment.
“They have a large group of passionate sports fans and that would be a big bet on sports betting; that would be the most obvious for them.” The sports betting industry, which contributes more than $ 100 billion annually, is projected to be worth nearly $ 180 billion by 2028.
Yahoo Finance, which provides data on various stocks, also gets a lot of traffic and advertising revenue. But these divisions face internal distress that could complicate the acquisition.
In recent months, remote work has left people isolated and frustrated, several journalists tell The Post. And some say a “deaf” stance from executives has added to the bad feelings, former employees told The Post.
After Apollo ended the merger of Yahoo Media last week, Yahoo executives sent a note to the entire company informing employees that they would retire from work on Friday, Sept. 3, in gratitude for all they had done.
Employees in the news division took this note as a slap in the face: their posts couldn’t get exactly the day off from the news.