How Yahoo Went From Internet’s First Superstar To A Struggling Brand | Business News

Listed on the stock market in 1996, Yahoo was the most popular site of the 90s. (AP/File)

In the 90s, Yahoo emerged as the symbol of the internet era, becoming an internet superstar that introduced the world to the online age. Yahoo was the first major internet company to understand what people were searching for on the web. After going public in 1996, its stock soared.

Yahoo Mail, Yahoo Messenger, Yahoo Finance, and Yahoo News were all top services. By 2000, the company’s value surpassed $125 billion, making Yahoo the first stop for anyone coming online.

In 1998, Google’s founders were ready to sell their company to Yahoo for just $1 million, but Yahoo declined, believing they did not need a search engine. This decision would shape the future. Google grew to become the world’s most powerful tech company, and Yahoo’s decline began. Rather than developing its own search technology, Yahoo relied on others. This costly mistake led to a sharp fall in value, and in 2021, Apollo Global Management acquired 90 percent of Yahoo for just $5 billion.

It All Started With Two Students

Founded in 1994 by students Jerry Yang and David Filo, Yahoo started as a simple directory called Jerry and David’s Guide to the World Wide Web. It was renamed Yahoo! in January 1995, an acronym for “Yet Another Hierarchical Officious Oracle.” Within months, Yahoo! became known as the gateway to the internet.

Listed on the stock market in 1996, Yahoo was the most popular site of the 90s. During the dot-com bubble in 2000, its value reached around $125 billion.

Google Was Once Up For Grabs

Yahoo missed several opportunities to acquire Google. In 1998, Google’s founders were prepared to sell for just $1 million, but Yahoo declined. In 2002, Yahoo had another chance to buy Google but missed it again. In 2008, Microsoft attempted to buy Yahoo for $44.6 billion, but Yahoo refused. A few years later, Verizon bought Yahoo for just $4.83 billion.

Missing Out On Developing Search Technology Was Costly

Yahoo’s dependence on others for search technology, such as Inktomi, Google, and later Bing, contrasted with Google’s continual improvement of its own technology, leading to Yahoo’s stagnation.

Despite its popularity, Yahoo Messenger failed to keep pace with the mobile era. It was slow to enhance voice and video chat features, launched its smartphone app late, and was overtaken by WhatsApp and Facebook Messenger.

After 2007, during the smartphone revolution, the world shifted to mobile. While Facebook and Google focused on mobile-first strategies, Yahoo remained web portal-centric. Leadership instability plagued Yahoo, with seven CEOs in ten years, each attempting different strategies without lasting success.

Acquisitions Dragged The Company Down

Yahoo acquired over 100 companies, most of which were poor investments. Notably, Yahoo’s purchase of Tumblr for $1.1 billion led to a significant loss, as it was valued at only $3 million a few years later.

Data Breach Triggered Serious Challenges

The most severe blow came from the massive data breach in 2013–14, where data from over 3 billion users was hacked—the largest theft in history. This led to a decline in Yahoo’s reputation, with many users switching to Gmail.

Acquired By Apollo Global Management

In 2021, Apollo Global Management acquired 90% of Yahoo, reviving the brand. Today, Yahoo operates as a media and digital services company with over 900 million monthly users. Yahoo Finance and Yahoo News remain strong in their categories. However, it is evident that Yahoo is far from its golden days. Against competitors like Google, Facebook, TikTok, and other new companies, Yahoo has struggled to maintain its former prominence.