Yahoo: A Retrospective of Microsoft's Acquisition Target

Yahoo's Fan Base Builds

From the early days it was clear that users loved Yahoo.

"David Filo and Jerry Yang should be given a Medal of Honor, then locked in a room and never allowed to get lives: they are already doing an excellent job of categorizing the Web with Yahoo's Hostlist," wrote one user in response to a September 1994 Usenet posting asking for a directory of Web sites.

Word of the service spread through the Internet, often from enthusiastic users passing on details of the resource, but sometimes with a little promotion by Yang and Filo themselves.

"We have a pretty comprehensive listing at the Yahoo Database," wrote Yang on Usenet in September 1994. "It's an attempt to be organized by subject (although not very well) -- but we are working on it. Searchable too," he wrote.

All the time Yang and Filo continued to live everyday lives, unaware they would become billionaires in less than a decade. A look at old Usenet postings reveals Yang campaigning for fair funding for college students while Filo was trying to trade World Cup tickets online.

Raising Yahoo's Profile

As 1995 began, Yahoo was serving up 200,000 pages per day from its index of about 25,000 Web sites, and was about to hit the big time. During that year Yang published a book about Yahoo and earned an interview on National Public Radio's Fresh Air. Both cofounders appeared on a PBS Frontline TV documentary about the Internet called "High Stakes in Cyberspace."

"What Yahoo does is make your wasting your time easier. It wants you to get where you want to go to waste time faster so you don't have to waste time wasting time," is how Yang explained Yahoo in the documentary, according to a transcript of the show.

The publicity came just as thousands of people started piling onto the Web and new sites were popping up faster and faster. As a result by the middle of June 1996 Yahoo had jumped to 9 million pages per day and in the third quarter of that year traffic for the three-month period hit 1 billion page views.

Investment in the popular and fast growing site wasn't far behind its rising popularity. In April 1995 Sequoia Capital provided Yahoo with two rounds of venture funding just as Yang and Filo decided to put their studies on hold and start running Yahoo full time.

"We [hadn't] done anything on our research in the last few months," Filo told CIO magazine in a June 1995 interview. "We had to decide which thing to pursue, and we're not really interested in what our PhDs were in."

An initial public offering and international expansion was next on the cards, and by the end of 1996 Yahoo had sites in the U.K., Germany, France and Japan, and had launched the Yahooligans service for kids.

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