Why his success became loud failure

In 2021, a brand that was synonymous with the Internet and asserted about US $125.000 million returned to the media with a new negative news: the closure of one of its most popular services.

These were Yahoo Answers, one of the last survivors of the glory era of a company that lived golden times but that broke out of a series of wrong decisions, which culminated in July 2016.

Some 22 years after he began as a hobby for graduate students of the Californian University of Stanford Jerry Yang and David Filo, Yahoo agreed five years and a half years ago selling his main operational business to the American telecommunications operator Verizon.Few today remember how gloriously this company began.Before Google or Facebook, Yahoo was the king of the Internet.

Origins and ascent

Jeremy Ring was one of Yahoo's main sales executives from 1996 to 2001.His memoirs, We were Yaofo.

"Our company was five years old," Ring wrote.«We were worth more than Ford, Chrysler and GM together.Demons, we were worth more than Disney, Viacom and News Corp.together.Each of those great American brands could have been swallowed by us, ”he recalled.

Thanks to its business instincts and strategic acquisitions, Yahoo was far ahead of the curve in almost all Internet categories.But he failed to capitalize on his first advantages, and left the field dominated by later participants.Yahoo Briefcase, for example, made cloud storage long before Dropbox, Box and Google Drive.

For many in the 1990s, this company with the fun name was Internet synonymous.It began as a web directory, cured and categorized manually by humans, simply known as "navigators".

Much more than a directory

Yahoo was the first place to add news sources, sports and finance to its web directory.These three services are still very popular as part of Oath, the name of Verizon for its combination of Aol-Yahoo media.In early 1998, Yahoo had added:

At that time, he competed with search portals such as excite, Infoseek and Lycos to provide everything on the network in one place.He didn't want to define himself as a portal, because a portal is a door to another place, and Yahoo wanted people to stay there.

Video, photos and advertising pioneer

On the way, Yahoo opened new roads.In addition to being the first web directory, it was the first portal to offer localized directories for the main cities and the first to allow users to customize their own versions of the site.Many of the applications and services that we now take for granted were invented in Yahoo or quickly found a home there.

Before YouTube existed, there was Broadcast.com, which became Yahoo TV.Before Instagram, was Flickr.Before Evernote, there was Yahoo Notebook.Before Spotify, Yahoo Music.And so on.

More important from the business point of view, Yahoo was a pioneer in the payment advertising model per click that was soon omnipresent on the Internet.The first click banner was an MCI ad;To ensure that people click on it, they embedded the word "naked" within the announcement text.

In 2001, Yahoo bought a startup called Launchcast and made it the basis of its own music transmission service.Before there existed Spotify or Pandora, a freeemium model followed: listen up to 1000 songs a month for free or for payment of US $ 4 per month for the quality of CD, without unlimited ads and jumps.

A symbol of Silicon Valley

Although Yahoo did not invent exactly the culture of Silicon Valley, he quickly became his representative.It was informal at the university level.David Filo did not wear shoes.You could wear shorts and flip flops to go to work.It was super entrepreneur, which is now a kind of cliché.The first employees used to sleep in their desks after spending all night writing code or updating content.

For the American public, Yahoo was the company with the fun television ads.I had personality in abundance, which for technology companies in the 90s was very rare.It was those first television ads that made Yahoo a global brand overnight.

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When Yahoo launched a television campaign in the US, there were at least 130 search engines.But none of them had that blatant name, and they were the first to leave and announce in a large and memorable way.

When Yahoo was about to buy ... Google and Facebook!

Good times did not last.Yahoo lost many of its advertisers, and almost all its value, in the fall of the Puntocom that began in April 2000.Never really recovered.Now what people remember most are lost opportunities.

In 1998, Yahoo had the opportunity to acquire a new and innovative Internet search technology created by a couple of Stanford graduate students for one million dollars.

Instead, David Filo convinced Sergey Brin and Larry Page, who had asked Yahoo for a financing fund for that million dollars, so that they were launched on their own and presented one of Google's first investors, MichaelMoritz, from Sequoia Capital, who invested that figure..

In 2002, Yahoo had a second chance to buy Google.This time, the company's CEO, Terry Senil offered US $ 3.000 million for the company.Page and Brin rejected it, because they expected US $ 5.000 million.

But even that was not the most famous lost opportunity of Yahoo.That happened in July 2006, when Yahoo tried to buy Facebook, then a university -oriented network with approximately 7 million members, for US $1,1 billion.

The internet tradition says that Mark Zuckerberg moved away from the proposed treatment when Senel reduced the offer to US $ 800 million after a drop in the price of Yahoo shares.According to Peter Thiel, one of the three members of the Facebook board at that time, Zuckerberg never seriously considered the possibility of selling.

Microsoft slam

Yahoo rejected offers, the most famous when the company then CEO of the company, Jerry Yang aggressively rejected Microsoft's attempts to buy Yahoo for US $ 44.6 billion in 2008.It was one of the most famous portzos in Internet history.

Yahoo was reaped with great acquisitions.For example, he bought geocities for US $ 3.700 million, wasteed US $5.700 million by Broadcast.com, spent US $1.100 million that then dropped into Tumblr.

In the light of the destination of these purchases, it can be deduced that Google or Facebook would be the giants that are today if they had become part of Yahoo.If Yahoo would not have spoiled those acquisitions, it could have ended up being the most valuable company in the world.Or would have delayed the Internet for a couple of years, because they would have lost Google and Facebook, and the world would have had to reinvent them}.

For example, in 1999, Geocities allowed millions of people to build their own websites, with enthusiastic but ugly results.WordPress today allows to create sites that are much more attractive, but the web lost some of its soul when Yahoo eliminated geocities in 2009.

Why did Yahoo fail?

Perhaps Yahoo's biggest error was not allowing search ads paid to coexist with organic search results.During the first years of its existence, the search results were considered editorial content, which should not be tarnished or diluted by advertising.

When Yahoo realized his mistake and acquired Overture, the company that invented the advertising of paid search, for US $1.600 million in 2003, Google was already at the head of that market.Instead of refining Overture to compete with the most sophisticated Google system, Yahoo decided to build its own advertising platform almost from scratch.

With the Panama Project Code name, the new platform took almost three years to be completed.By then, the battles for the web searches market had finished: Google had won.

But beyond that, Yahoo never really decided what he wanted to be when he grew up.Was it a technology company?A search advertising platform?A flourishing social network?

His second executive director, Terry Senil, tried to turn Yahoo into a new media giant.Her eighth and last executive director, Marissa Mayer, wanted to transform her into a mobile technology company.Neither of them was willing to get rid of the business generating income inherited from Yahoo, and both finally failed.

Yahoo Answers, Swan Song

Yahoo Answers farewell, which closed on May 4, 2021, was understood as one more exhalation on the road to the last sigh of what was one of the greatest Internet giants.

After 16 years of knowledge exchanges, the platform stopped admitting new questions or answers on May 20 and maintained the possibility that users download their contents until the end of June.After more than 15 years of being a reference on the Internet, the question and answers site argued that it had become less popular.

In his time of glory, Yahoo had the idea of creating a platform in which people could ask all kinds of questions for other users to answer them.The Questions and Answers page par excellence, or at least the best known and used by millions of users, was born in 2005.

Given the popularity of social networks, it is not surprising that one of the reasons, if not the most elementary, whether the platform has become less popular over the years and the company seeks to redirect its investments towards other products.

The footprint of a giant

Today, Yahoo DNA can be found in all Silicon Valley and beyond.You can't go to any company in the Californian Valley and not find Yahoo's footprint.The list of new companies launched by Yahoo former employees includes WhatsApp and Slack.And Yahoo exejecutive are part of LinkedIn's Management Councils, Facebook, Google, Microsoft, Twitter, Airbnb, Dropbox, and Capital Sequoia, to name just a few.

It could even be argued that Alibaba, China's massive online market, may not be a company of U $ S160 billion without the investment of one billion dollars in Yahoo in 2005.

The one that covers, little squeezes and ... fails

Trying to be all for everyone was Yahoo's ruin.He had some basic products such as mail, which survives today and was the best in his class, but most of his products were in second place and arrived late to the market.

With adequate leadership, Yahoo could have evolved to become a combination of what Google, Facebook and Netflix are today.But he lacked vision.