What Went Wrong for Yahoo

Summary

Reddit calls itself the front page of the Internet. But for a good decade or even a decade and a half, Yahoo had as legitimate of a claim as any to the title of front page of the Internet. On July 25, 2016, Yahoo met an inglorious end as an independent company, selling out to Verizon for $4.8 billion. That makes today as good of a day as any to look at what happened to Yahoo, the first front page of the Internet.How far Yahoo fellIn 1996, the front page of the Internet was little more than a collection of links.At the time, Forbes called it the saddest $5 billion deal in tech history, noting Yahoo was once worth $125 billion. Its 1996 IPO was highly anticipated, giving it a market capitalization of over $1 billion within an hour. The stock price cooled over the course of the day, settling at $33 per share, valuing it at closer to $750 million. Still, it was a good showing for a company that hadn’t turned a profit yet.Yahoo was founded as “Jerry’s Guide to the World Wide Web” by Stanford University students Jerry Yang and David Filo in January 1994. In March 1994, they changed its name to Yahoo. Initially the page was hosted at Stanford and its URL wasn’t easy to remember. It was common for college students to place a link to Yahoo on their own home pages so they’d be able to find it from any computer.Yahoo incorporated as a company on March 2, 1995, and the commercial version of its web site containing advertising launched in August 1995.Early Yahoo was little more than a curated collection of links, but with search engines still in their infancy, it served a very useful purpose. It called itself a directory or a portal. Today when you want to know about something, you enter a question into a search engine. In 1995, it was often easier to just go to Yahoo, click on a category, then follow a trail into subcategories until you found your ultimate destination. And you might find some other interesting stuff as you searched. Or not, with this being the very early days o...