How Yahoo! Went From Dot-Com Darling To $125 Billion Implosion

Yahoo! was Silicon Valley’s original star at the height of the dot-com boom they were the most visited site in the world and had a market cap of $125 Billion they were thought to be unstoppable much like the modern-day Tech Giants of Google, Facebook, Dropbox, and Spotify, in fact at some point Yahoo!’s product offerings basically made them the equivalent of all these companies combined they were so close to basically owning our entire online lives but in just over a decade they went from internet giant to a website where for anyone outside of Japan you use to help you find the google search engine. It’s a fall from grace that was quite evident when the tech firm which was once valued at over $100B was purchased for less than $5B by Verizon. This is the story that has it all: the dream startup with fast growth, the stagnation of a giant, bad decisions, and bad leadership
This is the story of Yahoo! The $125B implosion of a Tech Giant
Yahoo was founded by Jerry Yang and David Filo who at the time were Electrical Engineering Ph.D. students at Stanford. The initial concept of Yahoo was a website called Jerry’s Guide to the World Wide Web. It was the early 90s and the internet was starting to become more and more popular with thousands of new people accessing it every month. At the time the internet was quite difficult to navigate, when you found a website you liked you had to store the link somewhere so that you could find that website again, there was no search engine to help you find it again or web browser that kept you search history, it was all just a giant interconnected mess of computers. The first big step in making the internet more navigable was in 1993 with the introduction of Mosaic, Mosaic was the first graphical interface tailored for the web. Instead of seeing plain text only on websites, they were now more graphical and could include pictures and audio. David Filo would frequently use Mosaic to scour the internet for websites, he would write down the links of his favorite websites on a piece of paper so that he could type in their URLs and find them again later on. Jerry Yang found this list and created a website that had all the links in categorized groups of topics, he called the website Jerry’s Guide to the World Wide Web and that was essentially the first version of Yahoo! A simple Web Directory. Other graduate students began using the site and soon it became very popular on the Stanford campus. As it grew Its popularity extended far beyond Stanford, a couple of months after its creation it boasted users from over 40 different countries. The pair soon realized that “Jerry’s Guide to The World Wide Web” was a bad name for the rapidly growing site so they changed its name to “Yahoo!” With an exclamation mark, because the name “Yahoo” without an exclamation mark had already been trademarked by EBSCO for Barbecue sauce, the exclamation would prove to be very important in the creation of the famous Yahoo! yodel Ads.
Yahoo! Would officially be incorporated on March 2nd, 1995 soon after it would raise an investment worth $3 Million from Sequoia Capital. It was one of the first websites to incorporate news, sports, and finance feeds, making it hugely popular. They added ads to the site to monetize it, with this rapid growth and a solid business plan that revolved around selling ad space and ad clicks the company had its initial public offering in 1996. By this point competitors had sprung up; they included MSN, Lycos, and Excite but Yahoo! Continued to grow, It had funny TV ads and the famous yahoo yodel. It felt different and cool. It was truly innovative and ahead of its time, among its product offerings was Yahoo! Music, which was a music streaming service, it allowed users to play up to 1000 songs a month for free or pay $4 a month for CD quality, no ads, and unlimited skips. It was essentially Spotify before it existed. Another product that was ahead of its time was Yahoo! Briefcase, it was a cloud service that allowed users to store files online. It was precisely like Dropbox & Google Drive but it existed years before them. Its numerous features made it widely popular and it was leaving all its competitors behind. By 1998 Yahoo was the most popular starting point for web users and its human-edited Yahoo-Directory was the most popular search engine in the world receiving 95 million page views per day triple that of its biggest competitor Excite. In 1999 Yahoo was so big that in that year it made its biggest acquisitions ever, those acquisitions being Geocities for $3.6 Billion & Broadcast.com for $5.7 Billion the latter making Mark Cuban a billionaire. Its market cap reached an all-time high of $125 Billion making it one of the most valuable companies in the world at the time but then the dot-com bubble popped.

[@toyak7707]

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[@Tech_History_Channel]

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[@aliavais5764]

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[@Tech_History_Channel]

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[@foradome5204]

Great Video!

[@Tech_History_Channel]

Thanks

[@wlsmojo]

Excellent video :-) thank you

[@LMTF35]

Yahoo music was my go to early 2000s but then they messed it up.

[@victorn5179]

I enjoyed this!

[@Tech_History_Channel]

Glad to hear it!

[@timog7358]

great video

[@Tech_History_Channel]

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[@victorgw]

Yahoo should’ve owned the internet

[@Tech_History_Channel]

Indeed they should have!