History of Yahoo

Yahoo is a company based in Sunnyvale (California) and has over 500 million users worldwide. It is the most successful and largest Internet portal with online products and services for both private and business customers.

David Filo and Jerry Yang founded the company in March 1995. The company and its range of deals grew rapidly after its foundation. In 1996, Yahoo went with 46 employees onto the stock market and in 2005 a total of approximately 7,600 people worked for Yahoo. Yahoo’s service is now available in more than 20 different languages.

In 1994, the founders, David Filo and Jerry Yang – at that time doctoral students at the Faculty of Electronics at the University of Stanford – made a navigation aid for the Internet. The list of Internet sites listed in the web catalog grew rapidly, as the founders arranged the contents by categories.

Thus the foundation for one of the most successful brands on the Internet was put into place. After the page, which was first published under the name “Jerry and David’s Guide to the World Wide Web”, was recorded in autumn 1994, already one million requests and has 100,000 users had used the site. Yahoo was officially founded the following year.

Yahoo is an acronym for Yet Another Hierarchical Officious Oracle. In 1995, Yahoo was converted into a corporation, a year after the launch it entered the stock market.

Yahoo was founded in Germany in January 1996, the German-language portal was launched in October 1996. The Yahoo Germany GmbH was formed in November 1996 as a joint venture with Softbank (Ziff Davis). In subsequent years, Yahoo opened up other national markets with the opening of its portals in Japan, Britain, France (1996), Singapore, Australia, Korea, Denmark, Norway, Sweden (1997), Italy, Spain (both 1998), People’s Republic China (1999), Argentina, India and Canada (both 2000).

Yahoo is among the pioneers of the Internet and has greatly benefited from the boom in the 1990s of the Internet. With the increasing advertising revenue through online advertising, Yahoo’s share price rose to record levels. With the collapse of the so-called dotcom bubble in 2000/2001, advertising revenue fell back massively. Revenues fell heavily, and stagnated in the following quarters.

In this difficult situation and under the new chief executive Terry Semel, Yahoo changed its business strategy. Until that time, Yahoo offered many services such as e-mail accounts, online scheduler, etc. to users free of charge to generate the greatest possible number of customer contacts on its pages.

The more customer contacts, the more expensive Yahoo could sell banner ads on its pages. Yahoo expanded its product range and now also offered fee-based services. For this example, the Job site Yahoo HotJobs and the photo page on Flickr were integrated into its offerings.

Yahoo initially used the databases of Altavista, Inktomi, and finally Google as a basis for its own search engine. In February 2004 contracts were terminated with Google. Since then, Yahoo uses its own search algorithms and indices. In order to offer a good search engine on 19th March 2003 they incorporated the search engine provider Inktomi.

2005 saw Yahoo climb to one billion U.S. dollars in the Chinese online portal operator Alibaba.com. On 30th April 2007 Right Media took over as Yahoo’s advertising specialists. The price was 680 million U.S. dollars (500 million euros).

Beginning in May 2007 the New York Times reported merger talks between Microsoft and Yahoo, but these were unsuccessful. On 18th June 2007 Yahoo CEO Terry Semel stepped back. The co-founder Jerry Yang took over his position. At the end of 2007, Yahoo acquired the globally active online advertising network BlueLithium for nearly 300 million U.S. dollars.

Despite the aborted talks in May 2007, Microsoft announced in February 2008 that Yahoo was going to be taken over for 44 billion U.S. dollars. A similar offer had been submitted to the shareholders. Yahoo rejected that offer and demanded around nine million dollars more.

On 4th May 2008 Microsoft pulled back the offer. On 18th November 2008 Jerry Yang resigned as CEO of Yahoo. On 14th January 2009, Carol Bartz took over as the software manager. At the end of July 2009 it was announced that Microsoft and Yahoo had a comprehensive cooperation agreement in the fight against Google.

Origin of name

The Internet portal Yahoo takes its name from part of Jonathan Swift’s story of Gulliver’s Travels. The shipwrecked Gulliver is shipwrecked on an island and the horses live in houses with humanlike creatures called Yahoos.