Date: 01/01/1994Yahoo Inc. (also known simply as Yahoo!, styled as YAHOO!) is an American multinational technology company headquartered in Sunnyvale, California. 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. Marissa Mayer, a former Google executive, serves as CEO and President of the company.
It is globally known for its Web portal, search engine Yahoo! Search, and related services, including Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Finance, Yahoo! Groups, Yahoo! Answers, advertising, online mapping, video sharing, fantasy sports, and its social media website. It is one of the most popular sites in the United States. According to third-party web analytics providers, Alexa and SimilarWeb, Yahoo! is the highest-read news and media website, with over 7 billion views per month, being the fifth most visited website globally, as of September 2016. According to news sources, roughly 700 million people visit Yahoo websites every month. Yahoo itself claims it attracts “more than half a billion consumers every month in more than 30 languages”.
Once the most popular website in the U.S., Yahoo slowly started to decline since the late 2000s, and on July 25, 2016 Verizon Communications announced its intent to acquire Yahoo’s internet business for US$4.8 billion—the company was once worth over US$100 billion. Its 15% stake in Alibaba Group and 35.5% stake in Yahoo! Japan will remain intact.
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 “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.
Yahoo grew rapidly throughout the 1990s. Like many web search engines and web directories, Yahoo added a web portal. By 1998, Yahoo was the most popular starting point for web users. It also made many high-profile acquisitions. Its stock price skyrocketed during the dot-com bubble, Yahoo stocks closing at an all-time high of $118.75 a 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 2000. Over the next four years, it developed its own search technologies, which it began using in 2004. 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 Corporation made an unsolicited bid to acquire Yahoo for US$44.6 billion. Yahoo formally rejected the bid, claiming that it “substantially undervalues” the company and was not in the interest of its shareholders. Three years later Yahoo had a market capitalization of US$22.24 billion. 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, such as Chief Product Officer Blake Irving left. 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 US$375 million annually after the layoffs are 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 16, 2012, Marissa Mayer was appointed President and CEO of Yahoo, effective the following day.
On May 19, 2013 the Yahoo board approved a US$1.1 billion purchase of blogging site Tumblr, and the company’s CEO and founder David Karp will remain a large shareholder. The announcement reportedly signifies a changing trend in the technology industry, as large corporations like Yahoo, Facebook, and Google acquire start-up Internet companies that generate 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 the company’s need for “a thriving social-networking and communications hub.” On May 20, the company announced the acquisition of Tumblr officially. The company also announced plans to open a San Francisco office in July 2013.
On August 2, 2013, Yahoo Inc. announced the acquisition of social Web browser concern RockMelt. With the acquisition, the RockMelt team, including the concern’s CEO Eric Vishria and CTO Tim Howes, will be the part of Yahoo team. As a result, all the RockMelt applications and existing Web services were terminated on August 31.
Data collated by comScore during July 2013, revealed that more people in the U.S. visited Yahoo Web sites during the month in comparison to Google Web sites; the occasion was the first time that Yahoo outperformed Google since 2011. The data did not incorporate visit statistics for the Yahoo-owned Tumblr site or mobile phone usage.
On March 12, 2014, Yahoo officially announced its partnership with Yelp, Inc., which will help Yahoo boost its local search results to better compete with services like Google.
On November 11, 2014, Yahoo announced it would be acquiring video ad company BrightRoll for $640 million. Video is one of the company’s key growth areas and the acquisition will make Yahoo’s video ad platform the largest in the U.S.
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 has gone well during Mayer’s tenure including the $1.1 billion acquisition of Tumblr that has yet to prove to be beneficial while the forays into original video content 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.” The closing price of Yahoo! Inc. on December 7, 2015 was $34.68.
The Wall Street Journal’s Douglas MacMillan reported that Yahoo’s CEO Marissa Mayer is expected to cut 15% of its workforce. The announcement is expected after the market closes on February 2, 2016.
On September 22, 2016, Yahoo disclosed a data breach in which hackers stole information associated with at least 500 million user accounts in late 2014. According to the BBC, this was the largest technical breach reported to date.