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AI: ‘You.com is the best search chat engine,’ CEO says

You.com Founder and CEO Richard Socher joins Yahoo Finance Live to discuss the company’s ChatGPT-like search assistant, privacy, user growth, AI innovation, and the outlook for the AI space.

Video Transcript

BRAD SMITH: You.com is entering the chat in the AI race. The young startup recently launched its next generation of You Chat, its ChatGPT-like search assistant. But how does it plan to go up against the big tech giants here? Well, here to discuss, we've got Richard Socher, who is the You.com founder and CEO. Richard, thanks for joining us here. So walk us through the ambition here to really add on or capitalize on top of what many who are looking to search engines and that next leg of growth or innovation, what they're looking to with AI.

RICHARD SOCHER: Yeah, You.com is the best search chat engine that gives you control over all of these latest AI features that you just mentioned, and also the content sources you might like. It's the best kinds of features combined of a chat bot like Chat GPT and a search engine like Google in a modern interface. So for example, as a marketer, it may generate a novel copyright-free image for you. As a programmer, it won't just give you a list of links, but it'll write an entire code for you. As a student, it may write an essay draft for you, depending on what you ask. So, ultimately, I think search engines are going to be much more than search engines. We want to help you actually accomplish more.

BRAD SMITH: Talk to us about the monetization. I mean, we layer on AI to search engines that typically made their money from advertising dollars. And so now, where does that monetization, where does that profitability model really come into play?

RICHARD SOCHER: Yeah, we will also explore private ads that don't follow you around the internet everywhere and invade your privacy. We try to be a lot better on privacy. But 80% of the signal in a search engine you actually get from the query. Someone searches for an air purifier, you can show them still a private ad for an air purifier. But we also want to help people actually do things. And when they actually use these AI apps, they can also just pay a subscription for these AI applications that are within the search engine.

BRAD SMITH: OK, and so for the number of users that you're anticipating to really engage with this, how does the model itself-- because this is a language learning model, essentially, that we've heard from so many different generative AIs. How does your own model continue to improve with the number of users that are then engaging with it?

RICHARD SOCHER: Yeah, that's a great question. We already have millions of users. We really had the sort of proverbial hockey sticks starting in December, when we launched You Chat. And it's been incredible to see and also get feedback from users. They can vote on saying this answer was right or not right for them. That helped us to be much more factual. We now have multimodal responses, also, where you can see, for instance, the stock price directly within the chat interface, instead of the chat bot making up things. And I think these are all very important pieces of making this whole chat interface work for a search engine.

BRAD SMITH: So what have the responses been from those users who have engaged thus far?

RICHARD SOCHER: It's been extremely positive. Of course, there are always a few folks who find an answer that you don't like, and sometimes it's hard with these models. You might not know whether the user wants to create a new story and make something up or if they really want to just ask for a specific fact. And we are pulling in more and more information now from Wikipedia and different content sources that you can control also, such as stock and weather apps and things like that. And so with the combination of these apps that we have in the search results page, the AI capabilities, and free-form text that you can ask follow-up questions to, it's been very, very positive.

BRAD SMITH: So let's be clear about the market that you're in right now, especially on the search engine front. You've got some behemoths, and it's unlikely to be able to outspend them because of the cash flow that they already have and where they can deploy that. But perhaps in the out innovating some of those larger players that are in the search engine game here, how do you go about layering on different elements that users can expect to really round out the experience or make the experience for the users that much better?

RICHARD SOCHER: Yeah, you have some very big tankers that are following our little speedboat here. Especially since we've launched You Chat, we've seen big players like Google and Microsoft trying to get into the space. You're exactly right. What we mostly want to focus on is outcompeting them on speed and getting the most exciting features into the search engine more quickly.

And then hoping for a little bit of them also being stuck in an innovator's dilemma. You know, when you make $150 billion or more in advertisements, I don't think you're going to want to replace half of all those ads with a beautiful AI chatbot that just gives you the right answer and helps you accomplish more. You kind of want people to continue clicking on those ads. Otherwise, you probably lose a couple hundred million dollars a day in revenue. And so that is an opportunity for us to move quickly and build new kinds of ways to interact with content and create and accomplish things online.

BRAD SMITH: $20 million raised for you.com in 2021. 2022, you saw $25 million raised for the company and further expansion. Do you anticipate needing to raise additional capital this year?

RICHARD SOCHER: Yeah, it's a good question. We definitely have a lot of interest from VCs reaching out. We're contemplating that. It is not cheap, and we had focused mostly on growth, like most consumer companies have. We're now thinking also stronger and working on our monetization to get private advertisements going, to get subscription models going for the most cutting edge AI capabilities. Yeah, we'll see what this year holds. It'll be an exciting year for search. I don't think we've seen this much excitement about how different and better search can be for the last 10 years. And I can guarantee you in three to six months, most people will search very differently on the web than they did the last 10 years.

BRAD SMITH: You.com's founder and CEO, Richard Socher, thank you so much for joining us here today. We appreciate it.