Unspoken Truth About Success & Failure of Yahoo

 Yahoo is a Web Services provider which was first introduced at Stanford University. In this chapter, we outlined the story of a company which has seen unprecedented highs and lows. Yahoo once was one of the biggest tech company in the world. Unfortunately less known to people of the generation today.

On the other hand, started as a hobby for Stanford graduates Students Jerry Yang and David Filo. The journey of Yahoo is a lesson for all company out there. Let’s find out and dig deep inside the success and failure of a Yahoo.

History of the Company

Jerry Yang and David Filo founded Yahoo in January 1994. Both of them are a Standford graduate student. At first, they developed a website named”Jerry and David’s Guide to the World Wide Web”. It was simply a directory site of other websites, organized in a hierarchy as a searchable index of pages.

Later in April 1994, Jerry and David’s Guide to the World Wide Web was renamed “Yahoo!“. The word “YAHOO” is an acronym for Yet Another Hierarchically Organized Oracle“. The yahoo.com domain was created on January 18, 1995.

Yahoo! grew rapidly throughout the ’90s and diversified into a web portal, followed by the numerous high profile company. The company’s stock has skyrocketed during the dot.com bubble and closed at an all-time high of US$118.75 in 2000. After dot.com bubble crash, it reached an all-time lowest of low as trading in US$8.11.


Yahoo founder Jerry Yang and David Filo

Yahoo! acquired various companies such as Rocketmail and ClassicGames.com, which eventually became Yahoo! Mail and Yahoo! Games, respectively. The domain yahoo.com was registered in 1995 but the website had already got one million hits at the end of 1994. Yahoo acquired various companies from the period of 1994-1999 seeking for the expansion.

Growth Years

For many people in the 90s Yahoo was the internet. It was one of the initial sites to add news, sports, and finance feeds to its web directory; those three services remain hugely popular as part of Oath, Verizon’s name for its AOL-Yahoo media mashup.

By early 1998, Yahoo had added email, shopping, classifieds, personals, games, travel, weather, maps, people search, celebrity chats, a kid-oriented version called Yahooligans, and an online magazine. At the time, it was competing with search portals like Excite, InfoSeek, and Lycos to provide everything on the net in one place.

yahoo success and failure story


Before the arrival of YouTube, there was Broadcast.com, which turned into Yahoo TV.  Ahead Instagram, there was Flickr. Similarly, as like as Evernote, there was Yahoo notebook. Even more, there was Yahoo music before Spotify. Yahoo had such wide coverage of web services at the past.

On the other hand, Yahoo pioneered the pay per click system on the internet, which soon became popular across the internet. In early 2001, Yahoo gave the platform for people to listen to online music. People could stream up to 1000 songs a month for free, or pay $4 a month for CD quality, no ads, and unlimited skips.

Yahoo Greatest Mistakes

Yahoo truly never recovered from the dot.com crash on the internet. Now we all remember yahoo for the missed opportunities and wrong decision made by it. In 1998, Yahoo came close to buying Google for 1 billion dollars. But founder David Filo convinced Jerry Lang and Lary Page to create their own platform. It was one of the best deals available at Silicon Valley.

Yahoo got second chance to buy Google in 2001 but Yahoo turned the offer from Google. Yahoo missed one of the best opportunities ever. In 2006, Yahoo had a chance to acquire Facebook for 1.1 billion dollars but yahoo only offered 800 million dollars. Yahoo also had the opportunities to acquire eBay and Youtube.

yahoo success and failure story

Instead of Google, Facebook, Youtube, eBay, etc Yahoo acquired broadcast.com for 5.1 billion dollars. Broadcast.com is recognizable as the proto-YouTube of the dial-up era. Yahoo also acquired Geocities in 3.7 billion dollars, which gave a platform for millions of people to build their website.

Everyone has their own theory on the success and failure of Yahoo. Even more, Yahoo’s biggest mistake was not allowing paid search ads to happen with organic search results. By the time Yahoo realized its mistake–and acquired Overture, the company that invented paid search advertising, for $1.6 billion in 2003–Google was already flat out ahead.

Instead of polishing Overture to compete with Google’s more sophisticated system, Yahoo decided to build its own advertising platform mostly from scratch, says Flake, who came to Yahoo as part of the Overture acquisition. Code-named Project Panama, the new platform took nearly three years to complete. By then, the search wars were over; Google had won.

The failure of Yahoo comes to lack of clear vision and identity crisis. Yahoo missed several opportunities to make a deal with a high acquisition. We can say it was the biggest mistakes ever. Was it Technology Company or a search advertising platform? Trying to be everything to everyone was Yahoo’s downfall. It was once valued at 126 billion dollars on its imperious height. Unfortunately, Yahoo Sells to Verizon on July 25, 2015. That was one of the  Saddest $5 billion deal in tech history.

Happy Reading 🙂

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