How Yahoo ignited the Web -- and then got burned

The portal brought millions of newbies to a nascent online resource, but now it's fighting for relevance

Yahoo Corporate

How Yahoo ignited the Web -- and then got burned

When Yahoo burst onto the scene in the mid nineties, it immediately became a favorite of early web users and soon became the Internet's hottest site. Over the years it's had ups and downs and been criticized for falling behind the times -- but it remains in business. One of the few web pioneers to successfully avoid bankruptcy or acquisition.

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Jerry's Guide to the World Wide Web

Students Jerry Yang (right) and David Filo created "Jerry's Guide to the World Wide Web" in 1994 while studying at Stanford University. The web was still in its early days and was largely being used by university students and scientists, but consumers were slowly starting to come online and new websites were popping up daily.

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Yahoo is born on this computer

After just a few months, Yang and Filo decided to rename the site "Yahoo" in 1995. The name was an acronym for "Yet Another Hierarchical Officious Oracle. It didn't take much to run a website in those days. This is the Digital Equipment Corp. DEC 3000 that ran an early version of Yahoo at Stanford University in 1995.

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Internet Archive

The Yahoo directory

Early Internet users loved Yahoo because it laid out the web as a directory. There weren't the millions of websites there are today, so often clicking through to categories resulted in lists of a handful of sites. The site's roots at Stanford's computer science department are indicated in an abbreviation on the front page here, with "CS" under Science. Instantly recognizable to any engineering student, the term wasn't and still isn't widely used outside of universities. Perhaps surprisingly in a world that became dominated by search, the Yahoo directory lived on until late 2014 when it was finally closed. It still remains accessible on Yahoo Japan.

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First steps to a portal

One of Yahoo's first big expansions was the addition of news articles from Reuters. It would be among the site's first steps from pure directory service to a portal that provided information for users rather than pointing them somewhere else. This article from Network World's edition of July 31, 1997, mentions the new service and "colorful advertisements." Advertising, like many other things, was also just getting started on the web.

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Internet Archive

Geocities and acquisitions

Among Yahoo's biggest acquisitions of the nineties were the takeovers of Geocities and The Dot-Com bubble was growing and the Internet was hot. Yahoo bought Geocities, which provided free home pages, for $3.6 billion in stock, back when everyone wanted to have their own website (most likely with blinking "under construction" messages!) and investors wanted to own Yahoo stock. An even bigger acquisition came soon after. Yahoo picked up for $5.7 billion in cash. The site streamed Internet radio stations.

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Internet Archive

Flubbing Flickr

Flickr looked like a smart buy for Yahoo, but it was also symbolic of how Yahoo managed to flub the simplest things. As online photo sharing boomed, Yahoo did nothing to improve Flickr's awkward interface or reward the site's loyal users. Only years later did Flickr get a more modern redesign that worked well on phones and tablets. By then, everyone was putting their photos on Facebook anyway.

CES Yahoo
Elizabeth Montalbano

Keeping Yahoo relevant

In early 2008, when button-down shirts and tan pants were all the rage in Silicon Valley, Yahoo co-founder Jerry Yang was back as CEO and there was enough buzz around the company to earn it a CES keynote. With co-founder David Filo, the two discussed how they planned to make Yahoo an essential starting point for all Internet users. But the web portal model was breaking down and users were increasingly relying on search to find what they needed.

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The Microsoft bid

On Feb. 1, 2008, Microsoft made a $44.6 billion bid for Yahoo! The bid surprised the tech industry but was soon rejected as too low by Yahoo.

Despite Steve Ballmer's best efforts, Microsoft gave up on the acquisition three months later.

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Bartz kicks some butt

Carol Bartz took over from Jerry Yang in 2009 with the tough job of turning the company around and raising morale. She lasted just over two and a half years, leaving when the board concluded she couldn't deliver a financial and technological rebirth for Yahoo. Bartz was known for her colorful language. When she took the job, she told analysts she wanted to "kick some butt" and give Yahoo "some friggin' breathing room." Later the same year she famously told TechCrunch CEO Michael Arrington to "f**k off" when he asked her if Yahoo's marketing was "BS" and in a later call with analysts regarding Yahoo's personnel structure said, "nobody is f**king doing anything."

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Martyn Williams

Marissa Mayer takes over

Marissa Mayer joined Yahoo in July 2012, jumping ship from Google where she was in charge of Google's Local, Maps and Location. She had been Google's 20th employee and was a visible face of the company at the time.

The top job for Mayer was boosting revenue but she's fought a losing battle ever since she took the hot seat.

Just about the only good news for her has been her pay check. Her total compensation was valued at $42 million last year.

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James Niccolai

The celebrity experiment

One of Mayer's most notable pushes to turn around Yahoo was her attempt to turn the web portal into a news entertainment site. She hired big-name stars like TV journalist Katie Couric to produce original content for Yahoo. Her high point may have been at CES two years ago, when she was joined by Kouric, David Pogue and the cast of Saturday Night Live. But none of it drew the additional susbcribers Yahoo needed.

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Earnings calls go Hollywood

Under Mayer's reign, it hasn't been just big-name stars appearing in original productions. She took Yahoo's quarterly earnings presentation online, turning what was a dry telephone talk through a bunch of Powerpoint slides into something much more digestable. The shows have become a regular feature and are presented from Yahoo's own TV studio at its headquarters in Sunnyvale, California.

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We won't screw it up

Yahoo's relaunch of Flickr on May 20, 2013, in New York City came with an extra surprise. The company announced it was acquiring Tumblr for $1.1 billion and, in an unusually direct appeal to the blogging platform's users, Mayer pledged "We won't screw it up."

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The mobile push

Yahoo was an early entrant onto the mobile web and much of Mayer's recent activities have focused on building up its mobile presence as more and more content is consumed on smartphones. Many of the dozens of acquisitions the company has completed under Mayer have been in the mobile and advertising space.

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The next era begins

The reverse spin-off announced by Yahoo on December 9 means more uncertainty for the company. Yahoo's chairman told CNBC that the company isn't looking to sell off anything, but that won't stop the rumors. For her part, Mayer said she is "leading a very different company than the one I started at," citing the company's new sites and services added over the last few years. "I remain aligned with our board and our management team. We're focused on shipping great products and features. I remain convinced that Yahoo is on a better path and the right one."

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