After a revolving door of CEOs, strategies and even names over the past decade, Yahoo Media employees are hoping this time it’s a match.
Some employees are “quietly rejoicing” over Lanzone’s appointment, a person with knowledge of the matter told The Post. “Finally someone who knows media,” another employee said of Lanzone taking on the role of CEO.
But when Lanzone — who will replace current Yahoo chief Guru Gowrappan on Sept. 27 — starts his new role, he’ll be greeted by a workforce of 9,000 that is largely whiplashed by changing strategies and multiple owners over the past decade.
Employees are fearful of the private equity firm’s reputation for cost-cutting — and some have already left in anticipation of the cuts, employees with knowledge of the matter say.
But at least some employees of Yahoo — previously known as Verizon Media and prior to that, Oath — are taking the appointment of Lanzone as a hopeful sign. They say it’s an indication Apollo will actually invest in the conglomeration of web assets that include the faded but still traffic-driving Yahoo websites.
In a statement to The Post after Lanzone’s appointment, Apollo partner Reed Rayman emphasized 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.
Still, since the Apollo acquisition was announced in May, some of Yahoo’s top talent — which owns properties including Yahoo, Yahoo Sports, Yahoo Finance, Yahoo News, TechCrunch, Engadget, Autoblog and AOL — already jumped ship.
Prominent departures in the last month include Yahoo Finance anchor Kristin Myers, Yahoo Finance reporter Jenna McLaughlin, Yahoo Finance reporter Myles Udland and top Autoblog and Engadget honcho Adam Morath.
In a memo to employees Friday morning obtained by The Post, Lanzone appeared to seek to allay fears by emphasizing he plans to make investments, not cuts.
“Many of you have worked together for a long time, have been incredibly successful doing it and have well thought-out plans in place to grow our brands from here,” he said in the memo. He said he wasn’t looking to “create change for the sake of it.”
Some people close to Apollo have told The Post the private equity giant is “clearly going to gut all the businesses.” Yahoo is “ripe for radical cost-cutting,” the people said.
But people with direct knowledge of the matter counter that narrative and say the private equity firm wants to drive revenue growth.
“Jim Lanzone is the beginning of a real resurgence for Yahoo,” a person close to Apollo told The Post. “The worst thing Apollo could do is strip the business to the bones.”
People close to Apollo say the firm believes it can grow revenue by investing in higher-quality content. The firm will hire new people to create new verticals, or sites focused on specific content areas. One already successful vertical, Yahoo Finance, could even become the “Bloomberg for retail investors,” a person familiar said.
Yahoo declined to comment.
To be sure, private equity firms are known for mass layoffs and sometimes brutal cost-cutting. And it’s possible Apollo could be planning to cut headcount at Yahoo.
At Rackspace, a company Apollo purchased in 2016, it’s been one round of layoffs after another. Within months of the acquisition, Apollo fired 6 percent of employees and has subsequently laid off around 100 to 200 employees every year since then. In July, Rackspace announced it was cutting an additional 10 percent from the workforce.
People with knowledge of the matter see the close of the Yahoo deal as an inevitable end to a business model they believe never made sense — run by non-media owners who never “got” the media business.
Verizon, which completed the $4.48 billion Yahoo acquisition in 2017 said at the time the deal would give the media company scale Yahoo lacked on its own. Verizon CEO Tim Armstrong, who joined the Yahoo properties with AOL and, in a move widely mocked, rebranded the properties “Oath,” said: “The strategy behind the deal is to really go after mobile and video and a lot of the global services — the services that AOL has and Yahoo has — at scale.”
Yahoo management said they hoped to compete on the digital ad front with the likes of Google and Facebook. But since that time, the idea of merging content with distribution has been largely deemed a failure – as the dissolution of AT&T and Time Warner illustrated.
For Verizon, which had a market capitalization of $215 billion in 2017 (its market cap is now $227 billion), it was a relatively low-stakes bet. And it didn’t take long for the company to admit it was a failure: In a 2018 filing with the SEC, Verizon reported, the deal had yielded lower-than-expected benefits.
That tie-up followed an effort by former wunderkind Marissa Mayer, who Yahoo brought in from Google in 2012. She laid out a vision of Yahoo providing “a feed of information that is ordered – a web, ordered for you, [that] is also available on your mobile phone.” The vision flopped and she left the company in 2017.
In the meantime, some employees say they’ve been caught in the crosshairs of the changing priorities. After the Verizon merger closed in 2017, Verizon fired 2,100 employees. Verizon has continued to ax people since then, according to numerous reports.
Former journalists at Verizon’s media conglomerate tell The Post that Verizon never had any business owning news sites, but that management generally stayed out of the way of how news was run. They aren’t hopeful that Apollo has any better formula.
“Having all these brands under one roof never made sense,” one former editorial employee told The Post. “It never made sense when AOL was running it or when Verizon was running it … why would it work when Apollo is running it?”
With Apollo running the businesses, some insiders expect the private equity firm eventually to chop up the business into pieces, hold onto Yahoo Finance and Yahoo Sports, and sell the other assets.
That’s indeed what Lanzone is said to be looking at when it comes to Yahoo’s properties, according to the Wall Street Journal. On Friday, the Journal reported Lanzone plans to build out Yahoo Finance and Yahoo Sports — as well as the company’s ad-tech business.
Rich Greenfield, LightShed Partners analyst and partner emphasized one of the most compelling parts of Yahoo 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 it would make a great on ramp to sports betting — that would be the most obvious thing for them to do.” The sports betting industry — which brings in well over $100 billion annually — is expected to be worth nearly $180 billion by 2028.
Yahoo Finance — which offers data on various stocks — also gets ample traffic and ad revenue. But those divisions have been facing internal angst that could complicate the takeover.
In recent months the remote working has left people feeling isolated and frustrated, multiple journalists tell The Post. And some say a “tone-deaf” stance of executives has added to the ill feelings, former employees tell The Post.
Following Apollo’s completion of the Yahoo Media merger last week, Yahoo executives sent out a company wide memo telling employees they would get that Friday — Sept. 3 — off from work in appreciation of all they’d done.
Employees in the news division took that memo as a slap in the face: Their sites couldn’t exactly take the day off from the news.