Yahoo spins off AI-scaling engine Vespa as an independent company

Yahoo Inc. announced today that it has spun out its enterprise artificial intelligence scaling engine Vespa as an independent company to broaden the accessibility of its technology platform.

Vespa was first created by Yahoo in 2005 following the acquisition of a small search company called AlltheWeb in 2003. The software was originally used to power Yahoo’s shopping services before being put to use in numerous other applications.

As of 2017, when the Vespa code was open-sourced, the technology was being used to tackle the issue of deciding what to show users in response to input, such as text typed into a search box. Fast forward to 2023 and Vespa has now morphed into a Big Data and AI tool, be it with a fully featured search engine and vector database.

Vespa’s technology is said to underpin a diverse portfolio of approximately 150 applications integral to Yahoo’s operations, delivering personalized content across all of the company’s pages in real time and managing targeted advertisements. The technology is said to serve a user base of nearly one billion individuals, processing 800,000 queries per second.

Notable non-Yahoo Vespa users include Spotify Technology SA, Wix.com Ltd., OkCupid Media Inc., OttoGroup Holding GmbH & Co. KGaA, RavenPack Analytics Ltd., Qwant SAS and several unnamed major financial institutions. Yahoo will retain a stake in the new entity and will also hold a seat on Vespa’s board of directors.

“Given Yahoo’s incubation and advancement of the technology over the years, now is the time to spin out Vespa and allow other companies to take advantage of Vespa Cloud in a meaningful way,” Jon Bratseth, chief executive officer of Vespa, said in a statement. “With Yahoo’s continued investment and support, Vespa will be able to maintain its position as one of the largest and most sophisticated machine learning and database management platforms globally.”

While officially, Vespa is being spun off to broaden access to the platform, it is likely part of moves by Yahoo to streamline the company ahead of a potential return to public markets. Yahoo Chief Executive Officer Jim Lanzone told the Financial Times in July that his goal was to take the company to an initial public offering again as part of a plan to return Yahoo to prominence.

In the interview, Lanoze said that while Yahoo was ready financially and was profitable, being a private company allows it to “make necessary structural changes, creating business units similar to the model used when he was head of CBS Interactive.” Spinning off Yespa would be indicative of that.

Image: Yahoo/Vespa