Yahoo! was founded in January 1994 by Jerry Yang and David Filo, who were graduate students at Stanford University when they created a website named "Jerry and David's Guide to the World Wide Web". The Guide was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In April 1994, Jerry and David's Guide to the World Wide Web was renamed "Yahoo!". The word "YAHOO" is a backronym for "Yet Another Hierarchically Organized Oracle" or "Yet Another Hierarchical Officious Oracle." The “yahoo.com” domain was created on January 18, 1995.
Yahoo! grew rapidly through 1990–1999 and diversified into a web portal, followed by numerous high-profile acquisitions. The company's stock price rose rapidly during the dot-com bubble and closed at an all-time high of US$118.75 in 2000. However, after the dot-com bubble burst, it reached an all-time low of $8.11 in 2001. Yahoo! formally rejected an acquisition bid from the Microsoft Corporation in 2008. In early 2012, Yahoo laid off 2,000 employees (14 percent of the workforce). This was the largest layoff in Yahoo!'s history.
Carol Bartz replaced co-founder Yang as chief executive officer in January 2009, but was fired by the board of directors in September 2011. Tim Morse was appointed as interim CEO following Bartz's departure. Former PayPal president Scott Thompson became CEO in January 2012 and after he resigned was replaced by Ross Levinsohn as the company's interim CEO on May 13, 2012. On July 16, former Google executive Marissa Mayer became the CEO of the company.
Mayer resigned as CEO of Yahoo in 2017, when it sold to Verizon for $4.48 billion, following Yahoo's disclosure of security breaches. Guru Gowrappan was CEO of Yahoo from 2018 to 2021.
Jim Lanzone is the current CEO of Yahoo, appointed September 2021.
Early history (1994–1996) Jerry Yang and David Filo, who were electrical engineering graduates at Stanford University, founded "Jerry and David's Guide to the World Wide Web" in January 1994. When the site was renamed to "Yahoo!" in March 1994, Yang and Filo said that "Yet Another Hierarchical Officious Oracle" was a suitable backronym for this name, but they insisted they had selected the name because they liked the word's general definition, as in Gulliver's Travels by Jonathan Swift: "rude, unsophisticated, uncouth." Its URL was akebono.stanford.edu/~yahoo.
The “yahoo.com” domain was created in January 1995, although by the end of 1994, Yahoo! had already received one million hits. Yang and Filo realized their website had massive business potential, and on March 2, 1995, Yahoo! was incorporated. Yang and Filo sought the advice of entrepreneur Randy Adams for a recommendation of a venture capital firm, and Adams introduced them to Michael Moritz. On April 5, 1995, Michael Moritz of Sequoia Capital provided Yahoo! with two rounds of venture capital, raising approximately $3 million. In November 1995, Masayoshi Son initially investmented $2 million, but 4 months later this was expanded to $105 million for a 33% stake. The Yahoo! commercial website, including advertisements and news feeds from Reuters, launched in August 1995. That same month, Tim Koogle became the company's CEO.
On April 12, 1996, Yahoo! had its initial public offering, raising $33.8 million by selling 2.6 million shares at the opening bid of $13 each. It closed at US$33.00 – up 270 percent from the IPO price — after peaking at $43.00 for the day. The company's shares traded on Nasdaq under the ticker symbol YHOO. In September 1996, Yahoo! UK was launched.
The word "Yahoo" had previously been trademarked for barbecue sauce, knives (by EBSCO Industries) and human propelled watercraft (by Old Town Canoe Co.). Therefore, in order to get control of the trademark, Yang and Filo added the exclamation mark to the name. Srinija Srinivasan, an alumna of Stanford University, was hired as Yahoo!'s fifth employee as "Ontological Yahoo!" to assist Yang and Filo with organizing the content on the internet.
Growth (1997–1999) In the late 1990s, Yahoo!, MSN, Lycos, Excite, and other web portals were growing rapidly. Web portal providers moved to acquire companies to expand their range of services, generally with the goal of increasing the time each user stays within the portal.
The company invested in Singapore in January 1997, for the creation of the Singapore ONE network. The goal was to create a version of its search engine for the Asian market. On October 8, 1997, Yahoo! acquired online communications company Four11 for about $94 million in stock. Together with the ymail.com domain name, Four11's Rocketmail is incorporated into Yahoo! Mail the following June. That same month, Yahoo! acquired Viaweb, co-founded by Paul Graham, for $49 million, turning it into Yahoo! Store. The company also acquired ClassicGames.com and re-branded it Yahoo! Games. Yahoo acquired direct marketing company Yoyodyne Entertainment, Inc. in October 1998. In January 1999, Yahoo! acquired web hosting provider GeoCities, followed by Broadcast.com in April 1999. It acquired Pager, an instant messaging service that was renamed Yahoo! Messenger a year later.
When acquiring companies, Yahoo! often changed the terms of service. For example, they claimed intellectual property rights for content on their servers, unlike the previous policies of the companies they acquired. As a result, many of the acquisitions were controversial and unpopular with users of the existing services.
Dot-com bubble (2000–2001) Yahoo! stock doubled in price in the last month of 1999. On January 3, 2000, at the height of the dot-com boom, Yahoo! stock closed at a high of $475.00 (pre-split price) a share. Sixteen days later, shares in Yahoo! Japan became the first stock in Japanese history to trade at over ¥100,000,000, reaching a price of 101.4 million yen ($962,140 at that time).
On February 7, 2000, yahoo.com was brought down for a few hours as the victim of a distributed denial of service attack (DDoS). On the next day, its shares rose about $16, or 4.5 percent as the failure was blamed on hackers rather than on an internal glitch, unlike a fault with eBay earlier that year.
During the dot-com boom, the cable news network CNBC reported that Yahoo! and eBay were discussing a 50/50 merger. Although the merger never materialized, the two companies decided to form a marketing/advertising alliance six years later in 2006.
In LICRA v. Yahoo! in May 2000, a French judge ordered Yahoo to ban Nazi-related sites from its search engine, and to stop acting as an intermediary on bids for objects with racist overtones. Yahoo denied the French court's jurisdiction over a United States-based company, and the tribunal's requests were finally abandoned in 2003. Yahoo eventually quit voluntarily trading on Nazi and Ku Klux Klan bibelots.
Yahoo! acquired eGroups, which became Yahoo! Groups, in June 2000. On June 26, 2000, Yahoo! and Google signed an agreement which would engage the Google engine to power searches made on yahoo.com.
In 2000, Yahoo became one of the first companies to implement a BizOps or business operations team. Terry Semel was announced as the company's next CEO in April 2001, with former CEO Koogle remaining on Yahoo's board.
On September 18, 2001, hacker Adrian Lamo satirically modified various older Yahoo! News stories and pointed out security flaws. No charges were filed. The following month, Yahoo! acquired Australian online auction site Sold.com.au from Fairfax Media. In December 2001, Yahoo bid $436 million for the job search engine HotJobs, defeating rival TMP Worldwide (Monster.com).
Post dot-com bubble (2002–2005) Yahoo! was one of the few surviving companies after the dot-com bubble burst. Nevertheless, on September 26, 2001, Yahoo! stock closed at an all-time low of $8.11.
Yahoo! formed partnerships with telecommunications and Internet providers to create content-rich broadband services to compete with AOL. On June 3, 2002, SBC and Yahoo! launched a national co-branded dialup service. In July 2003, BT Openworld announced an alliance with Yahoo! On August 23, 2005, Yahoo! and Verizon launched an integrated DSL service.
In late 2002, Yahoo! began to bolster its search services by acquiring other search engines. In December 2002, Yahoo! acquired Inktomi. In February 2005, Yahoo! acquired Konfabulator and rebranded it Yahoo! Widgets, a desktop application, and in July 2003, it acquired Overture Services, Inc. and its subsidiaries AltaVista and AlltheWeb. On February 18, 2004, Yahoo Search dropped Google-powered results and returned to using its own technology to provide search results. A beta version of a video search engine debuted in December 2004. In April 2005, Yahoo pledged support to the Wikimedia Foundation.
In March 2004, Yahoo! launched a paid inclusion program whereby commercial websites were guaranteed listings on Yahoo Search after payment. This scheme was lucrative, but proved unpopular both with website marketers (who were reluctant to pay), and the public (who were unhappy about the paid-for listings being indistinguishable from other search results). In October 2006, Paid Inclusion ceased to guarantee any commercial listing and only helped the paid inclusion customers by crawling their site more often, by providing some statistics on the searches that led to the page, and posting additional smart links (provided by customers as feeds) below the actual url.
In 2004, in response to Google's release of Gmail, Yahoo! upgraded the storage of all free Yahoo! Mail accounts from 4 MB to 1 GB, and all Yahoo! Mail Plus accounts to 2 GB. On July 9, 2004, Yahoo! acquired e-mail provider Oddpost, adding an Ajax interface to Yahoo! Mail Beta. Google released Google Talk, a voice over IP service, and Yahoo Messenger and Yahoo message boards service, on August 24, 2005. On October 13, 2005, Yahoo! and Microsoft announced that Yahoo! and MSN Messenger would become interoperable. In 2007, Yahoo! removed the storage meters on Yahoo Mail, allowing users unlimited storage.
Yahoo! continued the acquisition of companies to expand its range of services, particularly Web 2.0 services. In 2004, Yahoo! acquired European shopping search engine Kelkoo. Yahoo! Launch became Yahoo! Music in February 2005, with the service providing streaming audio, music videos, Internet radio, artist features and music news. On March 20, 2005, Yahoo! purchased photo sharing service Flickr and its creator Ludicorp. That same month, the company acquired game platform provider Stadeon and launched its blogging and social networking service Yahoo! 360°. In June 2005, Yahoo! acquired blo.gs, a service based on RSS feed aggregation, and DialPad Communications, a VoIP provider. Yahoo! purchased the online social event calendar Upcoming.org, in October 2005, as well as British location technology company Whereonearth Ltd. Yahoo! acquired social bookmark site del.icio.us in December 2005, and the playlist sharing community webjay in January 2006.
In February 2005, the company launched a developer network providing an API to most of its search verticals. Yahoo! Developer Network PHP Center follow . Yahoo!'s PhotoMail service launched in May 2005. New partnerships included Yahoo! Research Berkeley, announced in July 2005, and a collaboration with TiVo, announced December 2005, where several Yahoo! features could be viewed on television via the Series2 TiVo set top box.