Moves: Yahoo, Yes, Names A New CEO
Let’s tell you a short story; in the online world, there was a time wherein a company named Yahoo ruled on the earth. It was a giant in its right, having the most market share of search and web portals before a newer incumbent named Google encroached on its turf and displaced it to become king.
- As Apollo has just completed acquiring Yahoo from its previous owner, Verizon Communications, the PE firm has moved to appoint a new CEO that’ll head the company. It’s poached Jim Lanzone, the CEO of online dating juggernaut Tinder, to take up the new job, seeing him switch from leading one of the world’s hottest online properties to one of the oldest and stale.
- This will be the fourth main CEO job for Lanzone, who has had a very good career in the tech industry. Previously, he served as CEOs of the search engine Ask.com, CBS Interactive, and Tinder in successive order beginning in 2005. He’s also an entrepreneur who co-founded Clicker, an online TV guide that sold to CBS in 2011 and saw Lanzone become CEO of the firm’s CBS Interactive division.
- To leave Tinder to run Yahoo, it seems that Apollo the new PE owner must have given many incentives to convince Lanzone. It’s one thing to run a fallen giant of old in the tech industry and it’s another to run it under the ownership of a PE firm that may just be looking to salvage it of its remnant value and exit.
- The current Yahoo comprises a collection of web properties grouped previously under a different name; Verizon Media. Verizon bought Yahoo for $4.8bn in 2017, then merged it with AOL which it bought for $4.4bn two years earlier to form Verizon Media. The telecoms giant took a hit selling combined assets it bought for $9.2bn to Apollo for $5bn.
Verizon Media (now renamed Yahoo) may be a stale business, but mind you is still far more successful than most companies out there. For a hint, it brought in $7bn in revenue in 2020, placing it still among the biggest online businesses in today’s sphere.
Apollo, the new owner is likely devising how to extract value from that $7bn a year business the private equity way, which can include job cuts to trim costs and pay bigger dividends to owners, saddling with debt to pay bigger dividends to themselves (yes, this happens), and so on…it’s a PE firm, after all, not just any firm but a giant one with over $400bn under management.