Yahoo is moving back toward online search with an AI-powered “answer engine” called Scout, Chief Executive Jim Lanzone said as the company tries to rebuild momentum more than two decades after it helped shape how people find information on the internet.
In a question posed by The Associated Press, Scout characterized Yahoo as an example of how an early advantage can fade without continuous innovation, while also returning hyperlinks to other sites. The company is now betting that AI answers can help it reassert itself in the way users discover news, sports, finance and other content.
Lanzone said Scout is being introduced to Yahoo users in the United States, and that the rollout includes 250 million users. He also said the company wants Scout to simplify search and produce more personal results tailored to users’ interests, with the goal that the answer engine becomes a “flywheel” that keeps users flowing through Yahoo’s other services.
Yahoo’s competitive target is Google, which remains the dominant force in search and has been layering AI into its search engine with Gemini technology, according to the reporting. The company also expects to face competition from other AI tools and answer engines, including OpenAI’s ChatGPT and Anthropic’s Claude, as well as answer engines such as Perplexity.
The effort also comes as Yahoo positions itself to use AI without trying to replicate the human-chat experience that many consumers associate with large language models. Lanzone said Scout “doesn’t simulate human conversations so users can ‘have a fake personal relationship with it,’” and he described Scout as “very unique,” adding that “we didn’t invent AI in the first place.” He said Scout is running on AI technology licensed from Anthropic.
Yahoo’s turn to Scout is part of a larger turnaround effort that Lanzone has led since taking the top job after Apollo Global Management paid $5 billion to take over Yahoo in September 2021. The reporting described the acquisition as a fraction of Yahoo’s peak $125 billion market value during the dot-com boom, after Verizon bought Yahoo’s online operations in 2017 and later bungled an attempt to blend those services into AOL.
Lanzone’s renovation work initially focused on shedding parts of Yahoo that he viewed as dysfunctional, including jettisoning some advertising technology, selling publishers such as TechCrunch and Rivals, and closing down AOL’s internet dial-up service. As those cleanup steps progressed, Lanzone shifted to overhauling what remained, including upgrades to Yahoo’s fantasy sports business and a major overhaul of its email service, which the reporting said ranks as the second largest on the web behind Google’s Gmail.
Even as the company looks to Scout for a new search strategy, some early Yahoo employees remain skeptical that AI alone can erase the company’s history. Jeremy Ring, who worked for Yahoo in the 1990s and wrote the 2018 book “We Were Yahoo!,” said Yahoo has not become a “Blockbuster or Radio Shack” story, but he questioned whether the best engineers would choose Yahoo and what would “enable them to compete against all the bigger companies using AI.”
Lanzone, meanwhile, said Yahoo is “very profitable” and bringing in billions of dollars in revenue, while declining to provide more specifics. He also said the company’s path could include returning to the stock market more than 30 years after its 1996 initial public offering—framing Scout as a potential engine for that longer-term comeback. He said Yahoo still has “one of the biggest audiences on the internet,” and that the company should aim to “super-serve” them.