After 5 months of bidding, on 25/7 telecommunications company Verizon agreed to acquire Yahoo!’s core businesses for USD 4.83 billion.
Yahoo! A fairy tale in Silicon Valley
Even now, Yahoo's early story remains legendary in Silicon Valley. In 1994, two young recent Stanford University graduates—Yang, a Taiwanese immigrant who graduated in mathematics, and Filo, a reserved programmer from Louisiana—created a guide to links called “Jerry and David's Guide to the World Wide Web.” It was a handwritten map to what would become digital space, and web surfers especially loved it.
With a dictionary's help, the two agreed on Yahoo, an acronym for ‘Yet Another Hierarchical Officious Oracle’ (another piece of advice on unofficial order). However, David and Jerry insisted on the name not really because of that lengthy phrase, but because its initials formed Yahoo, an English word meaning ‘wild.’
Yahoo! created applications and services used widely around the world such as a chat application Yahoo! Messenger on computers, email services Yahoo! Mail, Yahoo! Search, Yahoo! 360°, Flickr owns an enormous photo archive,. At the time, the giant Yahoo! was worth around 40 billion.
In 1995, Seuoia Capital invested in Yahoo! and brought in a new CEO, former Motorola executive Tim Koogle. This meant that the greatest authority in steering Yahoo no longer belonged to the 2 recent graduates, but to a director with extensive experience competing in the market.
Although they should have stepped aside, Filo and Yang remained deeply involved in the company's operations. Filo was then the technology leader who had written Yahoo's first search engine and made many decisions about the underlying technical architecture. Yang was heavily involved in strategic decisions and helped bring about Koogle's departure as CEO, replacing him with longtime Warner Brothers co-CEO Terry Semel.
Semel brought a group of local media executives to Yahoo, including names now familiar in Silicon Valley such as LinkedIn CEO Jeff Weiner and textbook retailer Chegg CEO Dan Rosensweig. This gave Yahoo multiple personalities and led to the long-debated question: Is Yahoo a technology company or a media company?
While Yahoo! was still banking on the media business, Amazon's Jeff Bezos expanded his unprofitable online retail operation, accepted that the company's shares were worth little more than scrap paper, and cut workers, ultimately creating an entirely different business called Amazon Web Services. At Google, Larry Page and Sergey Brin brought in Eric Schmidt as CEO, but all 3 functioned as an equal trio and achieved a breakthrough.
A bittersweet ending for the Yahoo! legend
Throughout the 2000s, Yahoo's greatest mistake was a failure of resolve. In 2002, Yahoo had the opportunity to acquire Google, but its then CEO, Terry Semel, passed up a 5 billion USD purchase after months of negotiations. In 2006, Yahoo! also came close to buying Facebook, but after Yahoo! released a disappointing report, Semel lowered the offer from 1 billion to 850 million, angering Mark Zuckerberg and causing him to reject it.
Those acquisition decisions were clearly quite risky for Yahoo! However, a willingness to take risks is fundamental to a technology company's survival. That is why concentrating power in the founders' hands is an important factor in enabling it.
Yang returned as Yahoo!'s CEO in 2007, but he was too ‘gentle’ and lacked the confidence to make difficult decisions. He should have laid off some employees and focused the company more on technology and the emerging smartphone trend. Yang was also responsible for Yahoo!'s greatest mistake: missing the opportunity to negotiate a merger with Microsoft in 2008, an effort by Microsoft CEO Steve Ballmer to compete with Goolge. Once again, Yahoo!'s CEO was not quick or decisive enough.
In 2012, Yang left the company’s leadership after his disastrous decision to hire PayPal’s Scott Thompson as CEO, only to have to dismiss him soon afterward upon discovering that he had lied on his résumé. Filo remained loyal to the company. He joined the board after Mayer took over.
Major mistakes in the past left Mayer unable to turn things around. And Yahoo! met a bittersweet end when telecommunications company Verizon acquired it for USD 4.83 billion.
Collected
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