Yahoo, which led the internet era in the 1990s, has moved to court Generation Z with artificial intelligence (AI). Although it ceded the lead in the internet market long ago to rivals such as Google, its strategy is to use more than 30 years of brand history and data as competitiveness in the AI era. In particular, it is aiming for a comeback by presenting the identity of an "internet original" to young users who were not even born in 1994, when Yahoo launched.
According to the Financial Times (FT) on the 23rd, Jim Lanzone, Yahoo's chief executive officer (CEO), said in an interview that Yahoo's long history is perceived as "vintage" by young users and can inspire trust.
Lanzone described Yahoo as the internet's "OG." OG is short for "Original Gangster," a slang term meaning an original or pioneer in a particular field. "There is an inherent trust that comes from us being the OG in this space," he said. "We are the original guide to the internet. We want to make the Yahoo brand known again," he said.
Yahoo is putting its old-brand image front and center because, with trust in newly founded tech corporations waning recently, the familiarity it has built over a long period could be an opportunity. It plans to turn the "long history" that once led to it being seen as behind the times into a trust asset to attract young users.
Founded in 1994, Yahoo grew into a corporation representing the early internet with search, news, and email. In January 2000, when it was a listed company, its market capitalization surpassed $125 billion (about 173.375 trillion won). However, it later declined under pressure from rivals such as Google, and its owner changed several times.
Yahoo is currently owned by U.S. private equity firm Apollo Global Management. Apollo acquired Yahoo and AOL from Verizon Communications Inc. in 2021 for about $5 billion (about 6.935 trillion won). The same year, Lanzone, who moved to Yahoo from the dating application (app) Tinder, reorganized the business around core consumer services such as news, finance, sports, and email.
Yahoo still reaches hundreds of millions of users through services such as finance, sports, news, and email. However, in core internet services such as search, it has fallen behind Google and AI-based competing corporations.
In this situation, the key card Yahoo has pulled for a comeback is AI. Yahoo plans to fully launch its own AI-based answer engine, "Scout," within the year. Scout uses publicly available web information along with Yahoo's own content and user data, as well as search logs accumulated over 30 years. The AI technology itself is licensed from several AI corporations.
"We have all the data on the content and user side, and 30 years of search logs," Lanzone said, explaining that using this will provide differentiated ingredients for generating AI answers.
Yahoo is also not entering into license deals to provide its content for training rival AI corporations' models. Rather than providing its own content to grow other corporations' AI models, its strategy is to use its content and data as competitiveness for its own AI services. Yahoo plans to monetize Scout's AI answers through advertising. Yahoo believes that if users move from traditional search to AI answers, advertisers will follow.
Yahoo is also expanding consumer businesses beyond AI. This year it launched the investment platform "AlphaSpace," which provides market data, news, and analysis to retail investors. It later added real-time options data.
Whether Yahoo can stage a comeback is expected to affect its future corporate value. On Wall Street, Yahoo is being mentioned as a candidate that could pursue an initial public offering (IPO) as early as next year or be sold. Lanzone did not give a specific answer on potential transactions ahead, but said, "To be attractive to any investor or acquirer, we need to become a growth company again. That's what we've been focused on."