Yahoo () is an American web portal based in Sunnyvale, California. It provides the search engine Yahoo Search and related services including My Yahoo, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Sports, y!entertainment, yahoo!life, and its advertising platform, Yahoo Native. It is operated by the namesake company Yahoo! Inc., which is 90% owned by Apollo Global Management and 10% by Verizon.
Yahoo was established by Jerry Yang and David Filo in January 1994 and was one of the pioneers of the early Internet era in the 1990s. However, its use declined in the 2010s as some of its services were discontinued, and it lost market share to Facebook and Google.
Etymology The word "yahoo" is a backronym for "Yet another Hierarchically Organized Oracle" or "Yet Another Hierarchical Officious Oracle". The term "hierarchical" described how the Yahoo database was arranged in layers of subcategories. The term "oracle" was intended to mean "source of truth and wisdom", and the term "officious", rather than being related to the word's normal meaning, described the many office workers who would use the Yahoo database while surfing from work. However, founders Filo and Yang insist they mainly selected the name because they liked the slang definition of a "yahoo" (used by college students in David Filo's native Louisiana in the late 1980s and early 1990s to refer to an unsophisticated, rural Southerner): "rude, unsophisticated, uncouth." This meaning derives from the Yahoo race of fictional beings from Gulliver's Travels.
History
Founding
In January 1994, Jerry Yang and David Filo were electrical engineering graduate students at Stanford University, where they created a website named "Jerry and David's guide to the World Wide Web". The site was a human-edited web directory, organized in a hierarchy, as opposed to a searchable index of pages. In March 1994, "Jerry and David's Guide to the World Wide Web" was renamed "Yahoo!" and became known as the Yahoo Directory.The Yahoo Directory – Once The Internet's Most Important Search Engine – Is To Close September 26, 2014. Retrieved June 3, 2017Yahoo schließt seinen Katalog from golem.de, September 27, 2014. Retrieved June 3, 2017 The "yahoo.com" domain was registered on January 18, 1995.
Yahoo was incorporated on March 2, 1995. In 1995, a search engine function, called Yahoo Search, was introduced. This allowed users to search Yahoo Directory. Yahoo soon became the first popular online directory and search engine on the World Wide Web.
Expansion and the dot-com bubble
Throughout the 1990s, Yahoo grew rapidly and became a public company via an initial public offering in April 1996 and its stock price rose 600% within two years. Like many search engines and web directories, Yahoo added a web portal, pitching itself against Excite, Lycos, and America Online. By 1998, Yahoo was the most popular starting point for web users, and the human-edited Yahoo Directory the most popular search engine, receiving 95 million page views per day, triple that of rival Excite. It also made many high-profile acquisitions. Yahoo began offering free e-mail from October 1997 after the acquisition of RocketMail, which was then renamed Yahoo Mail. In 1998, Yahoo replaced AltaVista as the crawler-based search engine underlying the Directory with Inktomi. Yahoo's two biggest acquisitions were made in 1999: Geocities for $3.6 billion and Broadcast.com for $5.7 billion.
Its stock price skyrocketed during the dot-com bubble, closing at an all-time high of $118.75 per share on January 3, 2000 and bottomed out at $8.11 on September 26, 2001.
Leadership Yahoo's corporate direction was heavily influenced by a series of leadership changes and missed opportunities. The company had two failed attempts to acquire Google; in 1998, Larry Page and Sergey Brin approached Yahoo to sell their nascent search engine for $1 million, but Yahoo declined the offer. In 2002, CEO Terry Semel entered into negotiations to purchase Google for a reported $5 billion. After weeks of negotiation, Yahoo's final offer was $3 billion, a figure that Google's leadership rejected. The failure to acquire Google in this second instance is widely considered one of the largest strategic errors in corporate history.
In February 2008, Microsoft made an unsolicited bid to acquire Yahoo for $44.6 billion. Yahoo rejected the bid, claiming that it "substantially undervalues" the company and was not in the interest of its shareholders. Although Microsoft increased its bid to $47 billion, Yahoo insisted on another 10%+ increase to the offer and Microsoft cancelled the offer in May 2008.
The company subsequently cycled through several chief executives. Carol Bartz, formerly the CEO of Autodesk, replaced Yang as CEO in January 2009. After failing to meet performance targets, she was fired by chairman Roy J. Bostock in September 2011, and CFO Tim Morse was named as interim CEO. Following the appointment of Scott Thompson as CEO in April 2012, several key executives, including chief product officer Blake Irving, resigned. On April 4, Yahoo announced 2,000 layoffs, or about 14% of its 14,100 workers by the end of year, expected to save around $375 million annually. In an email sent to employees that April, Thompson reiterated his view that customers should come first and completely reorganized the company.
Thompson's tenure proved brief; he was fired on May 13, 2012, and replaced on an interim basis by Ross Levinsohn, who himself had recently been appointed head of Yahoo's new Media group. Several associates of Third Point Management, including Daniel S. Loeb, were also nominated to the board of directors. Thompson's total compensation for his 130-day tenure with Yahoo was at least $7.3 million. On July 15, 2012, Marissa Mayer was appointed president and CEO of Yahoo, effective July 17.Matt McGee, Search Engine Land. "Confirmed: Marissa Mayer Leaving Google For Yahoo CEO Role ." July 16, 2012 . Retrieved March 27, 2017. Under Mayer's leadership, doubts about the company's turnaround emerged by January 2014 when she fired her own first major hire, Henrique de Castro.
Business During the 2000s and 2010s, Yahoo continuously adapted its products and services to keep pace with shifting internet trends. Yahoo began using Google for search in June 2000, but over the next four years, it developed its own search technologies. It began using these in 2004, partly incorporating technology from its $280 million acquisition of Inktomi in 2002. In response to Google's Gmail, Yahoo began to offer unlimited email storage in 2007, though it struggled with competition and laid off hundreds of people in 2008.
The company's product strategy frequently experienced turbulence. In August 2010, Yahoo! Groups rolled out a major software change that was denounced by a vast majority of users, prompting vice president Jim Stoneham to announce on September 29 that the site would roll back the changes based on member feedback.Latest Update on Our Changes | Yahoo! Groups Blog . Ygroupsblog.com (2010-09-29). Retrieved 2013-06-16. Despite these setbacks, Yahoo achieved a brief traffic milestone in July 2013 when comScore data revealed that more people in the U.S. visited Yahoo websites than Google—the first time Yahoo had outperformed Google since 2011. This data did not count mobile usage or Tumblr, the blogging platform Yahoo had acquired in June 2013 for $1.1 billion in cash. Under the deal, Tumblr's CEO and founder David Karp continued to run the site. That same month, Yahoo announced plans to open a new office in San Francisco, and on August 2, it acquired Rockmelt, retaining its staff but terminating all of its existing products.
To bolster its media and advertising presence, Mayer hired Katie Couric to anchor a new online news operation and launched an online food magazine. Yahoo further expanded its advertising capabilities on November 21, 2014, with the acquisition of Cooliris,By TechCrunch " ." and on December 12, it acquired video advertising provider BrightRoll for $583 million. Yahoo's acquisition strategy continued into the 2020s, targeting modern technology and financial platforms. In August 2023, the company acquired the San Francisco-headquartered social investing platform Commonstock, and in April 2024, it acquired the AI-driven news aggregator app Artifact.
Strategic errors and security breaches
Yahoo's decline was punctuated by a series of strategic missteps and severe security incidents. In March 2004, the company launched a paid inclusion program that guaranteed commercial websites listings on the Yahoo! search engine in exchange for payment. While initially lucrative, the scheme proved highly unpopular with marketers who resisted the fees, and the public, who disliked that paid listings were indistinguishable from organic search results. By October 2006, Yahoo eased the program, ceasing to guarantee commercial listings and instead using paid inclusion only to crawl customer sites more frequently and provide search statistics. Security vulnerabilities also plagued the company; in January 2014, a large-scale malware attack dating back to December 30, 2013, was discovered by Fox IT in the Netherlands. Targeting Java, the attack delivered malware to 300,000 Yahoo! users per hour before it was stopped, heavily affecting users in Romania, France, and the UK. Yahoo! faced heavy criticism for failing to provide public guidance on the number of affected users or advice on remediation."Questions left unanswered about Yahoo malware attack" , Dan Farber, CNET (CBS Interactive), 5 January 2014. Retrieved 8 January 2014. These security issues culminated in the massive Yahoo data breaches, which later directly impacted the company's financial valuation.
Controversies under Mayer's leadership Marissa Mayer's tenure as CEO became increasingly defined by internal controversy and deteriorating performance metrics. By December 2015, as the company's performance declined, Mayer faced intense scrutiny from the board regarding the future of Yahoo's core business. She was subsequently ranked as the least likable CEO in the tech industry. Product overhauls also alienated users; when Flickr unveiled a redesigned layout in May 2013—featuring one terabyte of free storage and a dynamically re-sized photo grid—Tech Radar noted it represented a "sea change" in the site's purpose, but the help forum was flooded with thousands of negative comments from critics who felt Yahoo had lost its mind.
Mayer's human resources policies and performance-rating systems drew severe legal challenges. In October 2016, Scott Ard, a prominent editorial director who had been fired in 2015, filed a lawsuit accusing Mayer of leading a sexist campaign to purge male employees. Ard, who had received "fully satisfactory" reviews since starting in 2011, alleged that Mayer encouraged the use of an employee performance-rating system to accommodate management's subjective biases against men. He claimed his role was eliminated as a pretext and given to a woman recently hired by editor-in-chief Megan Lieberman. As the lawsuit noted, Lieberman stated she was terminating Ard because she had not received a requested breakdown of his duties, despite him having already provided that exact information. A second sexual discrimination lawsuit was filed separately by Gregory Anderson, who had been fired in 2014, echoing claims that the performance management system was arbitrary and unfair. A California magistrate dismissed all the plaintiffs' claims except one: that Ard was passed over for promotion to editor-in-chief in favour of a woman prior to his dismissal. The judge found that "Anderson has not provided any evidence that his termination had anything to do with his gender".
Amid these internal crises and a $4.4 billion loss, Mayer announced layoffs amounting to 15% of the Yahoo workforce on February 2, 2016.
Sale to Verizon and Apollo