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Nextdoor bets on real neighbors reviews over AI algorithms

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Yahoo Finance Executive Editor Brian Sozzi sits down with Nextdoor ( NXDR ) CEO Nirav Tolia to discuss the company's new Local Faves hub, which puts recommendations from real neighbors front and center rather than relying on AI algorithm recommendations. Tolia also breaks down Nextdoor's turnaround strategy and how the company is using AI to make its local conversations more useful.

00:00 Speaker A

Is there one big thing to happen on Next door that's going to unlock massive growth? Because I when I listen to your earnings call, like I I hear what you're saying. I mean, rolling Thunder, you have all these great updates, but it's like the street just wants to see this one big thing that completely reinvents the platform. It doesn't exactly work that way.

00:20 Speaker B

Well, the one big thing is the result of a hundred small things. And so you will continue to see small incremental improvements that ultimately add up into something big and ultimately add up into great results. And so there is the myth of the one big thing that turns a company around. But we all know that the reality is you have to do a lot of things, and when you do a lot of things well, and you put those things together, it makes a big difference. Now, that said, local business recommendations, which is what we're talking about today, is a big, big part of this turnaround. We've talked about local recommendations from the very beginning because it's been historically 30% of the content on next door, and we know that almost 100% of internet users go to the internet to find local recommendations. So, this is a really good fit between what we're good at and what we've been good at since the beginning and what users are looking for, particularly in an age of AI where over 50% of internet users have found fake reviews. You won't find a single fake review on next door, you'll only find the recommendations from neighbors you can trust.

01:21 Speaker A

How is AI being implemented inside of next door and where do you see the monetization opportunities happening?

01:27 Speaker B

Well, AI is throughout next door, both in terms of how we're running the company more efficiently and in terms of how we're making the product better. And so, before you would go to next door and you would read the newsfeed of what neighbors are saying. You still do that on next door, but AI can now help those neighbors answer the questions faster, can help summarize the answers that those neighbors are giving and can act almost as an agent. I mean, increasingly, we are turning from search-based interfaces to agentic interfaces. What is an agentic interface? It's just a conversation. That's what Next door has always been. and as we integrate AI into that conversation, neighbors can get information faster, they can get it better. They just get a lot more leverage. In terms of the business opportunities, there is no stronger symbol of intent than when a neighbor is looking to find out how best to spend their money in the neighborhood. How best to spend their money on a local service provider or a local business, and that's where Next door really shines. because when you're talking about looking for advice on how to spend your money, you want to know who that advice is coming from. The internet has largely been about what? And as synthetic content starts to flood the internet now, we don't really know where it's coming from. even when we go to Chat G PT and ask a question, we don't know where the answers are coming from. Next door is totally different. We can use the power of AI to summarize and make that information more easy to access, but you know that information is coming from your neighbors. You know that the information is coming from real humans. That's different, that's better, and it's going to show up in the results.

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