Ya-Who? The Rise and Fall of a Web Titan


I know what you’re thinking, Yahoo? Ya-who?? For those that don’t remember, Yahoo Inc. is an American multinational technology company, which during the 90s and early 2000s dominated the web as a leader in email, online news and search. Now, in 2016, it’s a sad story – a series of unfortunate events. But what went wrong? When did this web titan become tiny Tim?

Yahoo was founded in 1994 by Stanford University graduates Jerry Yang and David Filo, and soon grew to become one of the internet’s first and most used web portals. It was designed to be a one-stop-shop for the digitally inexperienced, which in the mid-90s was… everyone. Yang and Filo provided a new service to the world that was desperately needed.

The huge rates of traffic meant Yahoo become a premium advertising space. As an unprecedented venture, it meant they could set the price, and that every company wanting to advertise digitally went directly to the pioneer.

Not even the dot-com bubble crash in 2000 could shake off Yahoo’s strong hold. Due to the commercial growth of the internet, dot-com companies experienced a meteoric rise in stock prices. But like every bubble that grows too quickly… it burst. For instance, Books-a-Million stock price soared by over 1000% in the dot-com bubble, simply from announcing an updated website in November 1998. In one week, the stock for Books-a-Million flew from $3 to $38.94, two weeks later it had dropped to $10, and by 2000 it had returned to $3. And Yahoo? Between 2001 and 2008 Yahoo’s revenue increased tenfold, peaking at $7.2b.

So, what went wrong with Yahoo?

Simply put, Yahoo just hasn’t kept up with the ever-changing digital landscape. As the world became digitally savvy, the concept of web portals became outdated and redundant. Yahoo found itself being overtaken by rivals in every corner. Gmail and Hotmail began dominating mail servers, Google as a search and display ad business, and Whatsapp and WeChat as messaging platforms. By 2008, established news reporters had become computerised, and new, digitally native channels such as Huffington Post and Vice had grown into international phenomenon’s.

When the internet was in its foetal years, a general service was necessary – a “road map” if you will. But as the world caught up, and Yahoo failed to specialise, it paved the way for expert apps, websites and services to become leaders in their field – and consumers knew how to reach them without a content collecting homepage like Yahoo.

Yahoo has lagged behind in every aspect. Since its conception in 1994 it’s been rebranded once, in 2013 – five years after consistently slumping revenue figures began being recorded. The homepage is still to this day cluttered and uninspiring. Google, for example, has undergone four rebrands since 1996, and its clean and simple design has been pitching them above Yahoo since 1998.

In the pivotal years since founding partner and chief executive Mr Yang stepped down in 2008, Yahoo has seen a flurry of leadership changes – the shortest stint by Scott Thompson, who lasted just four months before resigning. Shaky leadership in a time of crisis is far from helpful.

And all of this before even mentioning the (not one, but TWO) hacking scandals that Yahoo has suffered. Of which the latest, most worryingly, happened back in 2013. Which means they either withheld the news (allowing users to be unaware of their sensitive information being stolen) or even worse, they only just noticed themselves.

As Yahoo slowly withers away and joins Woolworth’s in the ‘we used to be market leaders’ heaven, we can take two things from them:

1) Staying up-to-date is a whole load easier than clawing back revenue when trying to play catch up

2) Nothing can stop the unbeatable world domination of Google

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