Yahoo

Apollo Group Calls On Tinder CEO As Whipped Employees Hold Their Breath

After a revolving door of CEOs, strategies, and even names over the past decade, Yahoo Media employees are hoping this time it’s a game.

Apollo Global Management, which bought Yahoo from Verizon Media in a $ 5 billion deal reached last week, has named Jim Lanzone, CEO of Tinder, new head of Yahoo Friday.

Some employees are “quietly celebrating” Lanzone’s appointment, a person familiar with the matter told The Post. “Finally someone who knows the media,” said another employee of Lanzone taking on the CEO role.

But when Lanzone – who will replace current Yahoo chief Guru Gowrappan on September 27 – begins his new role, he will be greeted by a workforce of 9,000 who is largely struck by changing strategies and multiple owners. over the past decade.

Employees fear the private equity firm’s reputation for cutting costs – and some have already left in anticipation of cuts, according to employees with knowledge of the matter.

But at least some Yahoo employees – previously known as Verizon Media and before that, Oath – see Lanzone’s appointment as a sign of hope. They say this is an indication that Apollo will actually invest in the web asset cluster that includes faded but still traffic-generating Yahoo websites.

“I know change is difficult, especially when we’re physically separated, and God knows you’ve all seen your fair share of it… there’s every reason to be optimistic about the future,” Lanzone wrote to employees. Friday.
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In a statement to the Post after Lanzone’s appointment, Apollo partner Reed Rayman said the private equity firm wanted to position Yahoo for “long-term success.” He called Yahoo’s existing employee base “talented.”

“Apollo has invested in Yahoo to strategically grow the business, expanding and improving the user experience across some of the industry’s best-known brands,” said Rayman.

Yet since the announcement of the Apollo acquisition in May, some of Yahoo’s top talent – which owns properties like Yahoo, Yahoo Sports, Yahoo Finance, Yahoo News, TechCrunch, Engadget, Autoblog, and AOL – have already left the ship.

Major departures over the past month include Yahoo News reporter Jenna McLaughlin, Yahoo Finance anchor Myles Udland, Yahoo Finance anchor Kristin Myers, and top Autoblog and Engadget honcho Adam Morath.

In a note to employees Friday morning obtained by The Post, Lanzone appeared to seek to allay fears by pointing out that it plans to make investments, not cuts.

“Many of you have worked together for a long time, have had incredible success, and have well thought-out plans in place to grow our brands from here,” he said in the memo. He said he was not looking to “create change for the sake of it.”

Some people close to Apollo told The Post that the private equity giant “is clearly going to destroy all businesses.” Yahoo is “moved for drastic cost cutting,” the people said.

But people with first-hand knowledge of the matter contradict this narrative and say the private equity firm wants to drive revenue growth.

“Jim Lanzone is the start of a real resurgence for Yahoo,” a person close to Apollo told The Post. “The worst thing Apollo can do is strip the business to the bone.”

People close to Apollo say the company believes it can increase revenue by investing in better content. The company will hire new people to create new verticals or sites focused on specific content areas. An already successful vertical, Yahoo Finance, could even become the “Bloomberg for retail investors,” a person familiar with it said.

Yahoo signage
Verizon retains a 10 percent stake and $ 750 million of preferred shares in Yahoo as part of the deal.
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Yahoo declined to comment.

People in the know see the signing of the Yahoo deal as the inevitable end of a business model they say has never made sense – led by un-skinny media owners who have never “Mastered” the media sector.

Verizon, which completed the $ 4.48 billion acquisition of Yahoo in 2017, said at the time that the deal would give the media company the scale Yahoo lacked. Verizon CEO Tim Armstrong, who joined Yahoo properties with AOL and, in a widely mocked move, renamed the properties “Oath,” said, “The strategy behind the deal is to really take it on mobile. and video and many global services – the services of AOL and Yahoo – on a large scale. ”

Yahoo management said it hopes to compete on the digital advertising front with Google and Facebook. But since then, the idea of ​​merging content with distribution has been widely seen as a failure – as illustrated by the breakup of AT&T and Time Warner.

For Verizon, which had a market cap of $ 215 billion in 2017 (its market cap is now $ 227 billion), this was a relatively low-stakes bet. And it didn’t take long for the company to admit it was a failure: in a 2018 SEC filing, Verizon reported, the deal generated lower than expected profits.

This rapprochement followed an effort by former prodigy Marissa Mayer, whom Yahoo brought in from Google in 2012. She presented a vision for Yahoo providing “a feed of information that is ordered – a website, ordered for you. , [that] is also available on your mobile phone. The vision collapsed and she left the company in 2017.

In the meantime, some employees say they have been caught in the crosshairs of changing priorities. After the merger with Verizon closed in 2017, Verizon laid off 2,100 employees. Verizon continued to ax people since then, according to numerous reports.

Apollo website
In a statement released today, Apollo doubled its commitment to Yahoo, saying it “intends to invest significantly in user experience and develop exciting new offerings that can build on its leading brands in sports, finance, news, technology and more “.
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Former reporters at the Verizon media conglomerate told The Post that Verizon has never had a company that owns news sites, but management generally stays away from news management. They don’t hope Apollo has a better formula.

“Having all of these brands under one roof never made sense,” a 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 was running it?” “

With Apollo running the companies, some insiders expect the private equity firm to end up chopping the business into pieces, hanging on to Yahoo Finance and Yahoo Sports and selling the other assets.

This is indeed what Lanzone would be examining when it comes to Yahoo properties, according to the Wall Street Journal. The Journal reported on Friday that Lanzone plans to expand Yahoo Finance and Yahoo Sports – as well as the company’s ad technology business.

Rich Greenfield, analyst and partner of LightShed Partners pointed out that one of the most compelling aspects of Yahoo is its fantastic sports leagues. He commented on the Post ahead of Lanzone’s appointment being announced.

“They have a great group of passionate sports fans and that would be a great ramp for sports betting – it would be the most obvious thing for them to do.” The sports betting industry – which brings in well over $ 100 billion a year – should be worth nearly $ 180 billion by 2028.

Yahoo Finance, which offers data on various stocks, also generates significant traffic and advertising revenue. But those divisions faced internal angst that could complicate the takeover.

In recent months, remote working has left people isolated and frustrated, several reporters told The Post. And some say that a “deaf-mute” position of executives has added to resentment, former employees told The Post.

After Apollo completed the Yahoo Media merger last week, Yahoo executives sent out a company-wide memo telling employees that they would be getting a leave of absence this Friday, September 3 to thank you for everything. that they had done.

News staff took the memo as a slap in the face: their sites couldn’t really take time off from the news.