Yahoo! was founded by Jerry Yang and David Filo in January 1994 and was incorporated on March 2, 1995. Yahoo was one of the pioneers of the early Internet era in the 1990s. In 2000, it was the most popular website. Usage slowly declined as it lost market share to Google. However, Yahoo domain websites are still among the most popular websites, ranking 11th in global engagement according to Alexa Internet and 10th according to SimilarWeb.
In January 1994, Yang and Filo were electrical engineering graduate students at Stanford University, when they created a website named "Jerry and David's guide to the World Wide Web". The site was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In March 1994, "Jerry and David's Guide to the World Wide Web" was renamed "Yahoo!". The human-edited Yahoo! Directory, provided for users to surf through the Internet, became their first product and the company's original purpose. The "yahoo.com" domain was created on January 18, 1995.
The word "yahoo" is a backronym for "Yet Another Hierarchically Organized Oracle" or "Yet Another Hierarchical Officious Oracle". The term "hierarchical" described how the Yahoo database was arranged in layers of subcategories. The term "oracle" was intended to mean "source of truth and wisdom", and the term "officious", rather than being related to the word's normal meaning, described the many office workers who would use the Yahoo database while surfing from work. However, Filo and Yang insist they mainly selected the name because they liked the slang definition of a "yahoo" (used by college students in David Filo's native Louisiana in the late 1980s and early 1990s to refer to an unsophisticated, rural Southerner): "rude, unsophisticated, uncouth." This meaning derives from the Yahoo race of fictional beings from Gulliver's Travels.
In 1995, a search engine function, called Yahoo! Search, was introduced. This allowed users to search Yahoo! Directory. Yahoo soon became the first popular online directory and search engine on the World Wide Web.
Yahoo grew rapidly throughout the 1990s. Yahoo became a public company via an initial public offering in April 1996 and its stock price rose 600% within two years. Like many search engines and web directories, Yahoo added a web portal, putting it in competition with services like Excite, Lycos and America Online. By 1998, Yahoo was the most popular starting point for web users, and the human-edited Yahoo Directory the most popular search engine, receiving 95 million page views per day which was triple the number compared to rival Excite. It also made many high-profile acquisitions. Yahoo began offering free e-mail from October 1997 after the acquisition of RocketMail, which was then renamed to Yahoo! Mail. In 1998, Yahoo decided to replace AltaVista as the crawler-based search engine underlying the Directory with Inktomi.[40] Yahoo's two biggest acquisitions were made in 1999 – that of Geocities for $3.6 billion, and Broadcast.com for $5.7 billion.
Its stock price skyrocketed during the dot-com bubble, closing at an all-time high of $118.75/share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $8.11 on September 26, 2001.
Yahoo began using Google for search in June 2000. Over the next four years, it developed its own search technologies, which it began using in 2004 partly using technology from its $280 million acquisition of Inktomi in 2002. In response to Google's Gmail, Yahoo began to offer unlimited email storage in 2007. The company struggled through 2008, with several large layoffs.
In February 2008, Microsoft made an unsolicited bid to acquire Yahoo! for $44.6 billion. Yahoo formally rejected the bid, claiming that it "substantially undervalues" the company and was not in the interest of its shareholders. By 2011, Yahoo had a market capitalization of $22.24 billion (only half of what it had been offered by Microsoft three years earlier). Carol Bartz replaced Yang as CEO in January 2009. In September 2011, she was removed from her position at Yahoo by the company's chairman Roy Bostock, and CFO Tim Morse was named as Interim CEO of the company.
In early 2012, after the appointment of Scott Thompson as CEO, rumors began to spread about looming layoffs. Several key executives left, including Chief Product Officer Blake Irving. On April 4, 2012, Yahoo announced a cut of 2,000 jobs, or about 14 percent of its 14,100 workers. The cut was expected to save around $375 million annually after the layoffs were completed at end of 2012. In an email sent to employees in April 2012, Thompson reiterated his view that customers should come first at Yahoo. He also completely reorganized the company.
On May 13, 2012, Yahoo issued a press release stating that Thompson was no longer with the company, and would immediately be replaced on an interim basis by Ross Levinsohn, recently appointed head of Yahoo's new Media group. Thompson's total compensation for his 130-day tenure with Yahoo was at least $7.3 million.
On July 15, 2012, Marissa Mayer was appointed president and CEO of Yahoo, effective July 17, 2012.
On May 19, 2013 Yahoo! announced the $1.1 billion acquisition of blogging site Tumblr. Tumblr's CEO and founder David Karp became a large shareholder. The announcement reportedly signified a changing trend in the technology industry, as large corporations like Yahoo, Facebook, and Google acquired start-up Internet companies that generated low amounts of revenue as a way in which to connect with sizeable, fast-growing online communities. The Wall Street Journal stated that the purchase of Tumblr would satisfy Yahoo's need for "a thriving social-networking and communications hub." The company also announced plans to open a San Francisco office in July 2013.
On August 2, 2013, Yahoo acquired Rockmelt; its staff was retained, but all of its existing products were terminated.
Data collated by comScore during July 2013 revealed that more people in the U.S. visited Yahoo websites during the month than Google; the occasion was the first time that Yahoo outperformed Google since 2011. The data did not count mobile usage, nor Tumblr.
On December 12, 2014, Yahoo completed the acquisition of video advertising provider BrightRoll for $583 million.
On November 21, 2014, it was announced that Yahoo had acquired Cooliris.
By the fourth quarter of 2013, the company's share price had more than doubled since Marissa Mayer took over as president in July 2012; however, the share price peaked at about $35 in November 2013. It did go up to $36.04 in the mid-afternoon of December 2, 2015, perhaps on news that the board of directors was meeting to decide on the future of Mayer, whether to sell the struggling Internet business, and whether to continue with the spinoff of its stake in China's Alibaba e-commerce site. Not all had gone well during Mayer's tenure, including the $1.1 billion acquisition of Tumblr that had yet to prove beneficial and the forays into original video content that led to a $42 million write-down. Sydney Finkelstein, a professor at Dartmouth College's Tuck School of Business, told The Washington Post that sometimes, "the single best thing you can do ... is sell the company."
On February 2, 2016, Yahoo CEO Marissa Mayer announced layoffs amounting to 15% of its workforce.
On July 25, 2016, Verizon Communications announced the acquisition of Yahoo's core Internet business for $4.83 billion. Following the conclusion of the purchase, these assets merged with AOL to form a new entity known as Oath Inc. on June 13, 2017; Yahoo, AOL, and HuffPost were to continue operating under their own names, under the Oath Inc. umbrella. The deal excluded Yahoo's 15% stake in Alibaba Group and 35.5% stake in Yahoo! Japan. Following the completion of the acquisition, these assets were retained under the name Altaba, with a new executive team.
On September 22, 2016, Yahoo disclosed a data breach that occurred in late 2014, in which information associated with at least 500 million user accounts, one of the largest breaches reported to date. The United States have indicted four men, including two employees of Russia's Federal Security Service (FSB), for their involvement in the hack. On December 14, 2016, the company revealed that another separate data breach had occurred in 2014, with hackers obtaining sensitive account information, including security questions, to at least one billion accounts. The company stated that hackers had utilized stolen internal software to forge HTTP cookies.
In response to these breaches, Bloomberg News reported that Verizon was attempting to re-negotiate the deal to reduce the purchase price by $250 million, causing a 2% increase in Yahoo stock prices. On February 21, 2017, Verizon agreed to lower its purchase price for Yahoo by $350 million, and share liabilities regarding the investigation into the data breaches.
On June 8, 2017, Yahoo shareholders approved the company's sale of some of its Internet assets to Verizon for $4.48 billion. The deal officially closed on June 13, 2017.
In a press release from October 3, 2017, Oath Inc., a subsidiary of Verizon, stated that all Yahoo user accounts, some 3 billion, were affected by the August 2013 theft.
On June 16, 2017, parts of the original Yahoo Inc, which were not purchased by Verizon Communications were renamed Altaba Inc. On October 4, 2019, after selling its stake in Alibaba Group, Altaba was liquidated and dissolved. In October 2020, Altaba made a liquidating distribution to its shareholders.
Chief Executive Officers
- Marissa Mayer (2012–2017)[119]
- Ross Levinsohn Interim (2012)
- Scott Thompson (2012)
- Tim Morse Interim (2011–2012)
- Carol Bartz (2009–2011)
- Jerry Yang (2007–2009)
- Terry Semel (2001–2007)
- Timothy Koogle (1995–2001)
Former chief operating officer Henrique de Castro departed from the company in January 2014 after Mayer, who initially hired him after her appointment as CEO, dismissed him. De Castro, who previously worked for Google and McKinsey & Company, was employed to revive Yahoo's advertising business.
