Back in 1994, internet users had to search pretty hard before they stumbled upon anything of value, and so Stanford classmates David Filo and Jerry Yang decided to do everyone a favor by creating a humble, personally curated directory of the most popular websites. It has been called the Jerry and David's Guide to the World Wide Web.
As the number of pages increased, the guide organically evolved into what later analysts would classify as a so-called a hierarchical structure. What that means is when a user who signed up looking for the last night's soccer results, they must click on the "sports" section, then click on "soccer" and then click on his team before moving on to the key results.
That way the so-called Internet portal model was born and the pioneer Internet users were no longer forced to rummage through endless websites with slow loading processes in order to get the information they need. Thanks to this website, which quickly renamed to "Yahoo!", Internet users were able to enjoy a curated, one-stop-shop experience under the ambit of a cozy, omniscient, oracle-like homepage.
Yahoo wasn't the only portal of its kind at the time. As the team grew internally in the years to come, jokingly claimed that the Yahoo name stood for another hierarchically organized Oracle, but Yahoo was smarter and moved faster than its rivals going public in 1996 and leaving rivals like Lycos, excite, and America-online in the proverbial dust with a 600 percent surge in share by 1998.
During that white hot early winning streak the company became the number one portal and search engine on the web. With nearly 1 million daily page views and an astonishing (for the time anyway) 30 million unique users a month.
By early 1998, yahoo had added a suite of services to its core web directory business including Email, Shopping, classified-ads, online personals (a precursor to tinder you might say), celebrity gossip, and even a kid-friendly arm called "Yahooligans". The homepage was now customizable too. It was all very exciting.
Such was the feverish atmosphere that year, Yahoo execs turned away a couple of hopeful tech geeks called "Larry Page" and "Sergey Brin" who had the outrageous cheek to come to Yahoo's office in an effort to flog them a niche search engine called "Google" for a cool million dollars. Who knows what happened to those guys!
Things were on the up and up for Yahoo, and as the new millennium dawned its share price peaked at an all-time high of 118.75 dollars. in that brief shining moment Yahoo was worth more than Disney, Viacom, and News Corp put together.
Still, things were about to change. During a binge of acquisitions, the company had shelled out a cool 3.7 billion dollars for novelty website-builder "Geocities", and 5.7 billion dollars on mark cuban's TV streaming service, broadcast.com. anyway, It wasn't called the dot-com bubble for nothing. In a few months, yahoo stock will be trading at just eight dollars eleven cents a share.
So, what went wrong for Yahoo?
Looking back, Yahoo can certainly hold its head high as an early pioneer of much of what we take for granted online today. Like Launchcast, a 2001 startup acquired and nurtured by Yahoo that offered a pioneering freemium model for music with 1000 songs a month available for free, or for just four dollars a month at cd quality with no ads and unlimited skips. The almost-forgotten so-called "Yahoo Music" service existed almost a decade before Spotify came to dominate the music business.
Mark cuban's Broadcast.com was almost definitely overpriced at 5.7 billion dollars in 1999 money. The idea of watching TV over the internet really wasn't so ridiculous, but only when everybody got high-speed connections several years later.
Yahoo is also recognized within the industry as a pioneer of the pay-per-click advertising model that built so many overnight online fortunes. Yahoo was also a pioneer in its promotion of image sharing platform flickr. Although clearly it was smashed out of the park by Instagram following what most commentators agree was a lack of visionary investment by Yahoo in the platform.
The flicker situation is worth noting as it points to a wider malaise within Yahoo. Because with flickr the problem was poor leadership the problem, as with yahoo mail which of course ultimately gave ground to Gmail. It was in the market first with a huge audience that it simply squandered.
Yahoo certainly endured its share of less than stellar CEOs. Scott Thompson for one, laid off some 2000 workers and sold off tens of billions of dollars worth of the valuable stock founder Jerry Yang had purchased in chinese amazon equivalent, Alibaba.
All this after lying on his resume about having a degree in Computer Science. Scott Thompson succeeded Carol Bartz in the CEO chair, who herself was forced out in unedifying fashion, by a board she colorfully described as Doofus.
Still, Terry Semel, a former warner brothers executive is generally considered the worst boss Yahoo ever had. Not only did he miss the company's second and final opportunity to buy Google, still a snippet three billion dollars in 2008, but he also botched potential bottom dollar buyouts of Facebook and Doubleclick (itself the main engine of Google's world-beating revenue model).
Semel's real Pièce De Résistance, however, was turning down a 40 billion buyout offer from Microsoft in 2008, which valued the company way above what it would soon be worth. Even as Google and Facebook mercilessly devoured its user base.
