In the 1990’s Yahoo ruled the Internet, web search, and all the Advertisements. During the rise of technology, Yahoo made revolutions in search engines and advertisements. They made 10,000 dollars a month in the advertisements section alone. But, all for temporary. They had to make a huge decision to sustain their position in the Technology revolution. In various timelines, Yahoo had to switch its place from hand to hand. We will see everything about who owns Yahoo, opportunities, rises and falls, and the current Yahoo?
Yahoo at the Beginning – Who owns Yahoo?
Yahoo was founded by David Filo and Jerry Yang In March 1995. The founders had a brilliant idea of organizing uncharted websites into a neat human curator that would be highly convenient to some specific and average users. And this idea worked. At those time, people wanted to invest in something that they can trust as a new revolution in Technology. But, there are only a few countable search engines were present at the time. So, they started to invest in any company which had dot com at the end of the company name, which is a ridiculous idea. Still, that worked. At least for the web search companies and their allies investors.
Yahoo was one of the great brains which eventually used the idea of Banner Ads. The Yahoo search engine emerged as a bi-product of the directory. They experimented with putting the search box not at the top of the site but the bottom. By this practice, people have to scroll down the page and look at those advertisements even before they get to the search box. It was an enormous success for Yahoo. It got more investors and advertising campaigns for their company. And as a result, Yahoo was at its peak. And started to get a profit of 10,000 dollars per month in banner ads alone. And Yahoo ultimately ran out of space on their homepage for banners ads. That’s how important it became.
But, to be honest, the Yahoo website only made people look out for the ads more than their need to search on the website. This is because the founders didn’t concentrate on the people’s need for information more than ads. But, some others did. For example, the two Ph.D. candidates of Stratford, Larry Page, and Sergey Brin. They together found an efficient idea for search engines which is called Page Rank. The page rank had a higher probability of making the searching experience of people easier, and I wanted to sell that idea to Yahoo for just 1 million dollars. But, Yahoo executives criticized this idea by saying this will change the whole algorithm of Yahoo and make it easy for the people alone, not to the banner ads. Thus, Yahoo declined this negotiation.
Yahoo and Google
This portal war finally came to an end when the two scholars approached Google to sell this idea. While Google raised its flag higher, its easy methods and high quality got more support from the people. And other websites are stuck in-between. Yahoo indeed got more profits from its banner ads. But, they spent most of them on new portals for shopping, Jobs, and game portals for kids rather than spending them on search engines. Eventually, Yahoo negotiated a license to Google search 7 million dollars for the year. Even though they are not stable enough to buy Google completely, at that time, Google had to take a huge decision. Do or Die.
Instead of giving up the company to Yahoo, Google adapted this Page Rank idea in a better manner than the thought of Yahoo. By using page rank, Google can’t use ads at the home page but, they can add their advertisements at one of the answer pages like pop-ups. This made a drastic change in the portal wars, and Google became the top rank holder of the search engine history. All other websites started to float without lifeboats.
Google improved its search engine significantly. Moreover, it introduced Google adworks which helps to buy advertisements directly from google for their website portals. This process crushed the industry and all the dot com companies vanished where yahoo was competed with. Somehow, Yahoo survived this storm but, It knows they have to develop the company.
At that time in 2000, Yahoo made a radical decision. The management of yahoo bought in a CEO who had no experience in any technology company. He is none other than Terry Semel, the CEO of Warner Brothers production, who had a good reputation in the movie industry. He joined Yahoo in 2001, and the idea was he would give a fresh perspective in changing things. And he did that. He thought that Banner ads became an ancient idea and page rank is the future of web search. He knows that yahoo must adapt page rank ideas. He had some clear conclusions about these conflicts. That is, yahoo need to get into paid search. To make this happen, he approached his own strategies.
In 2002 Being a straightforward person, he went to Google and negotiated that he wanted to buy the entire company for three million dollars. At this moment, Larry and Sergey know that they are in the driver’s seat. They came to know there is no other way for Yahoo and approaching them directly. They raised the amount of negotiation to five billion dollars. Yahoo already crashed in the web storm in 2002 with other companies, and their debt was around five million dollars. As a negotiator like a warner, this idea of buying Google with all the debts flooding them is not at all a good idea. Thus, Yahoo gave up Google for the second time in history.
Warners Another Plan
After plan A he has to switch his plan B. That is, he has to save Yahoo and crash google to buy his own strategies. At first, he approached some other search engine websites and united with them. Those are Inktomi – like Yahoo, Inktomi had crashed incredibly in the dot com clash of 2002. That’s why Yahoo could be bought it for dirt cheap. In 2002 Inktomi was worth 250 billion dollars. And after the dot com crash, it became 25 million dollars. With the search engine in hand, Terry needs an ad platform to monetize the company.
In 2003, he bought the original platform Goto.com which by then renewed its name to Overture. Now he had all the ingredients. Now he needed to mix all the ingredients in one pot to stop his starving. But, it was not easy as it seems. The databases of Inktomi and Overture was outdated, and he needs to improve all the database to the current situation. It took Yahoo’s two full years completely to process the outdated data systems to change to the current one. But, at that point, they are already too late. When Yahoo bought Overture in 2003, it was already tied up with google ad revenue from just three years. Google’s revenue was twice as big, and this trend continued eventually.
After the Portal Wars
In 2006, Yahoo offered to buy Facebook for One Billion dollars. But, Mark Zuckerberg refused to this negotiation. In 2008, Microsoft offered 44.6 Billion dollars to acquire Yahoo. But, Yahoo wanted to sustain the war. Thus, they declined this offer. However, this is the highest negotiation that Yahoo got in its history. Then, Yahoo started to fall apart. They desperately needed leadership. At that time, their only hope was Marissa Mayer, the former executive of Google comes on board in 2012. Yahoo invested heavily in mobile updates, and three years later, they bought Tumblr. But, all their efforts are not enough to get on the board.
In 2016, the company was suffering a loss of 4.4 billion dollars. At the end of 2016, Verizon bought Yahoo for 4.8 billion dollars. That was just one percent of what Microsoft offered to pay for yahoo. In the course of its lifetime, Yahoo had bought a hundred and fourteen companies. But, none of them turned to a hit which could save the company from the drastic loss.
The Major Causes of the Loss
After the dot com crash, people started to use Google to acquire news for what they wanted to know. They started to look at their answers on Google, Facebook, Twitter, dedicated news websites, and Youtube. In contrast, Yahoo was working only through Gmail and Hotmail. But, Unfortunately, they both are replaced by Whatsapp, WeChat, Facebook messenger, and other messaging apps. In contrast, people started to fall apart from Yahoo also the advertisement companies. This was when Yahoo started to experience a tragic loss. Yahoo required leadership to sustain itself in the industry. But, Yahoo had to switch four CEO’s in six years, which reflects the lack of leadership in the company.
Indeed, Yahoo achieved a lot at the beginning of its journey. But, when the time comes, Yahoo refused to change itself to fit the people’s needs. If we take ignoring the Page Rank was a misfortune of Yahoo. At least They must have accepted Google’s second-time negotiation. Or at least must have accepted Microsoft offers to Yahoo. In the end, Yahoo shows that the lack of focus, inability to change, and lack of company direction/leadership can be lethal.
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