Jerry Yang and David Filo, Ph.D. candidates in Electrical Engineering at Stanford University created a web site called “Jerry’s Guide to the World Wide Web”. Jerry’s Guide to the World Wide Web was a directory of web sites organized in a hierarchy rather than being organized in a searchable index of pages. In April of 1994, “Jerry’s Guide to the World Wide Web” was renamed “Yahoo!”. The name Yahoo! is usually taken to be as an acronym for “Yet Another Hierarchical Officious Oracle” but Filo and Young insisted that they chose the name Yahoo! as they liked the general definition of Yahoo!: “rude, unsophisticated, uncouth”. Initially Yahoo! resided on Yang’s workstation “Akenbono” while the software was stored on Filo’s computer “Konishiki”; both computers were named after famous sumo wrestlers. The first URL for Yahoo! was http://akenbono.stanford.edu/yahoo .
Soon the word spread about Yahoo! and hundreds of people were accessing Yahoo! and were becoming regular users of the service. By fall of 1994, Yahoo! received more than a million hit and had close to 100 thousand unique visitors. After observing the success of Yahoo!, Yang and Filo knew that the website had a big business potential. On 2nd March, 1995 Yahoo! was incorporated. Yahoo was already used by other companies as their trademark, so in order to get the trademark the exclamation mark was added to Yahoo. The founders met with many Silicon Valley venture capitalists to get some funding to start their own company. Sequoia Capital, the firm which had invested in Apple, Atari, Oracle and Cisco agreed to fund Yahoo! with an initial investment of around $2 million. Jerry and David hired Tim Koogle, an alumnus of Stanford and working in Motorola, as Chief Executive officer of Yahoo! and Jeffrey Mallett of Novell as Chief Operating Officer. After receiving another funding in 1995 from Softbank and Reuters Ltd., Yahoo! came out with its initial public offering (IPO) on 12th April, 1996. At tat time Yahoo! had only 49 employees. Yahoo! raised $33.8 million from the IPO by selling 2.6 million shares at $13 each.
Yahoo! started diversifying into Web portal just like other search engines and web directories were doing. The Web portal providers were acquiring companies to increase the number of services being offered by them. This was being done so that the user spends maximum time possible on the portal. Yahoo! acquired “Four11” in 1997 and the mail service being provided by Four11, Rocketmail, became now famous Yahoo! Mail. Yahoo! Games was a result of acquisition of “ClassicGames.com”. In 1998 Yahoo! acquired Yoyodyne Entertainment Inc., a direct marketing company and acquired “GeoCities” which is a web hosting provider. “eGroups” became Yahoo! Groups after being acquired by Yahoo! in 2000. Yahoo! messenger was launched by Yahoo! on 21st July, 1999. Most of the acquisitions by Yahoo! were controversial and didn’t go down well with the users of the existing service as Yahoo! often changed the terms of service.
Success of Yahoo! was evident when in early 2000 Yahoo! stocks climbed an all time high of $475 per share. In February 2000 Yahoo.com temporarily stopped working for a few hours and the failure was attributed to an attack by hackers rather than blaming an internal problem. In an agreement signed on 26th June, 2000 between Yahoo! and Google the searches made on yahoo.com were powered by Google.
Yahoo! was one of the few large Internet companies that survived the dot-com bubble burst. Still it had effect on the stock of the company which fell to an all time low of $8.11 on September 26, 2001. To enhance the search services being provided by it, Yahoo! started acquiring other search engines. It acquired “Inktomi” in December 2002, “Overture Services Inc” and its subsidiaries “AltaVista” and “AlltheWeb” in July 2003. In February 2004 Yahoo! decided not to use searches powered by Google and decided to use its own technology to provide search results.
Google forced Yahoo! on back foot after it released Gmail, its own web mail service which offered 1 GB storage space, on 1st April 2004. Yahoo! in a desperate bid to retain users upgraded the storage space of all Yahoo! mail accounts from 4 MB to 100 MB and of all Yahoo! Mail Plus accounts to 2 GB. Yahoo! acquired “Oddpost”, an email provider, to add an Ajax interface to Yahoo! mail Beta. After Google again gave Yahoo! a run for its money by launching Google Talk, an instant messaging and Voice over IP service on 24th August 2005, Yahoo! announced that Yahoo! messenger and MSN messenger would become interoperable.
In an effort to expand the services provided by it, Yahoo! kept on acquiring companies with a clear emphasis on Web 2.0 based services. In February 2005, Yahoo! Launch became Yahoo! Music. Yahoo! purchased the photo sharing service “Flickr” on 20th March, 2005. The company forayed into blogging business by launching Yahoo! 360°, a blogging and social networking service, on March 29th 2005. Yahoo! acquired “blo.gs”, a RSS feed based service. “Upcoming.org”, a social event calendar site was bought by Yahoo! on 4th October, 2005. Yahoo! took acquisition of “del.icio.us”, a social bookmark site on 9th December and acquired playlist sharing community “webjay” in 2006 January.
Yahoo! Next contains forums where users can give feedback on the next generation Yahoo! technologies being developed. Currently, Yahoo! mail is the largest e mail service in the world and Yahoo! Search is the second largest search engine on the internet. Yahoo! Mobile provides Yahoo! services such as email, instant messaging, and search on the mobile phones. CNBC had reported during the dot-com boom that Yahoo! and eBay were thinking about 50:50 merger between the two companies. Though the said merger never took place, both companies decided to form a marketing and advertising partnership in 2006.
On March 20, 2007, Yahoo! introduced a new Internet search system called oneSearch specifically developed for mobile phones. Yahoo! stated that using this too users can get relevant data such as for a particular movie you will get the list of theatres screening that particular movie along with the ratings. To use oneSearch, a zip code or a city name is required for local search results. The results are listed on a single page and listed in categories.
Yahoo! also has online commerce services such as Yahoo! Shopping and Yahoo! Auctions. Yahoo! also provides services to small business owners which include Yahoo! Domains, Yahoo! Web Hosting, and Yahoo! Store etc. Yahoo! provides job services through HotJobs.
Yahoo! earns its major revenue by online advertising. The major segment of the revenue comes from search advertising. In search advertising, advertisers bid for search terms to display relevant ads on the search results. Yahoo! earns 2.5 cents to 3 cents from each search. With the new search advertising system “Panama” Yahoo! is trying to increase revenue generated from search. Yahoo! closed down user created chat rooms in June 2005 after media criticized the lack of control on child predators on these chat rooms.
On the Yahoo! homepage there is an Easter Egg. If the exclamation point in the Yahoo! logo is clicked upon, the famous Yahoo! yodel will play. Yahoo! is currently headquartered in Sunnyvale, California and has its offices around the world.