History of Yahoo! facts for kids
Yahoo! started at Stanford University in January 1994. It was created by two Electrical Engineering graduate students, Jerry Yang and David Filo. They first made a website called "Jerry and David's Guide to the World Wide Web." This guide was like a big list of other websites, organized into different topics, instead of being a search engine.
In April 1994, their website was renamed "Yahoo!". The name "YAHOO" is said to stand for "Yet Another Hierarchically Organized Oracle" or "Yet Another Hierarchical Officious Oracle." The website address, yahoo.com, was officially created on January 18, 1995.
Yahoo! grew very quickly in the 1990s. It became a web portal, which is a website that offers many different services. The company also bought many other businesses. Yahoo!'s stock price went way up during the dot-com bubble, reaching its highest point of US$118.75 in 2000. But after the bubble burst, it dropped to its lowest point of US$8.11 in 2001.
In 2008, Yahoo! said no to an offer from Microsoft Corporation to buy the company. In early 2012, Yahoo! had its biggest job cuts ever, with 2,000 employees losing their jobs.
Carol Bartz became the CEO in January 2009, taking over from co-founder Jerry Yang. She was later fired in September 2011, and Tim Morse became the temporary CEO. Then, Scott Thompson, who used to be the president of PayPal, became CEO in January 2012. After he left, Ross Levinsohn became the temporary CEO on May 13, 2012. Finally, on July 16, Marissa Mayer, a former executive from Google, became the CEO of Yahoo!.
Contents
Early Days of Yahoo! (1994–1996)
When "Jerry and David's Guide to the World Wide Web" was renamed Yahoo! in April 1994, Yang and Filo explained that the name was a backronym for "Yet Another Hierarchical Officious Oracle." However, they also said they liked the word's meaning from Gulliver's Travels by Jonathan Swift, where it means "rude, unsophisticated, uncouth." The website's first address was akebono.stanford.edu/~yahoo.
Even though the yahoo.com address was created in January 1995, Yahoo! had already received one million visits by the end of 1994. Yang and Filo realized their website had huge business potential. So, on March 2, 1995, Yahoo! became an official company.
Yang and Filo got advice from entrepreneur Randy Adams, who introduced them to Michael Moritz. On April 5, 1995, Michael Moritz from Sequoia Capital invested about $3 million in Yahoo!. On April 12, 1996, Yahoo! offered its shares to the public for the first time (initial public offering). They raised $33.8 million by selling 2.6 million shares at $13 each.
The word "Yahoo" had already been trademarked by other companies for things like barbecue sauce and knives. To get control of the name, Yang and Filo added the exclamation mark to "Yahoo!". That's why it's officially "Yahoo!".
Srinija Srinivasan, who also went to Stanford University, was hired as Yahoo!'s fifth employee. Her job was to help Yang and Filo organize all the content on the internet.
Growing Bigger (1997–1999)
In the late 1990s, Yahoo!, MSN, Lycos, Excite, and other web portals were growing very fast. These companies wanted to buy other businesses to offer more services. Their goal was to make users stay on their portal for longer.
On March 8, 1997, Yahoo! bought an online communication company called Four11. Four11's email service, Rocketmail, became Yahoo! Mail. Yahoo! also bought ClassicGames.com and changed it into Yahoo! Games. Later, on October 12, 1998, Yahoo! acquired Yoyodyne Entertainment, a direct marketing company. In January 1999, Yahoo! bought web hosting provider GeoCities. Another company Yahoo! took over was eGroups, which became Yahoo! Groups in June 2000. On March 8, 1998, Yahoo! launched Yahoo! Pager, an instant messaging service that was renamed Yahoo! Messenger a year later.
When Yahoo! bought other companies, they often changed the rules for using their services. For example, they sometimes claimed ownership of content that users put on their servers, which was different from the original companies' rules. This made some users unhappy.
The Dot-Com Bubble (2000–2001)
Yahoo! stock prices doubled in the last month of 1999. On January 3, 2000, at the peak of the dot-com boom, Yahoo! stock reached its highest price ever at $118.75 a share. A couple of weeks later, shares in Yahoo! Japan became the first stock in Japan to trade for over ¥100,000,000.
On February 7, 2000, yahoo.com stopped working for a few hours because of a DDoS attack. This is when hackers flood a website with too much traffic to make it crash. The next day, Yahoo!'s shares went up because people blamed hackers, not a problem with Yahoo!'s own systems.
During the dot-com boom, there were talks about Yahoo! and eBay joining together. Even though they didn't merge, the two companies later formed a marketing and advertising partnership in 2006.
On June 26, 2000, Yahoo! and Google made a deal. Google's search engine would power the searches made on yahoo.com.
After the Dot-Com Bubble (2002–2005)
Yahoo! was one of the few companies that survived after the dot-com bubble burst. However, on September 26, 2001, Yahoo! stock dropped to its lowest point ever at $8.11.
Yahoo! started working with phone and internet companies to offer more content-rich internet services. This was to compete with companies like AOL. For example, in June 2002, SBC and Yahoo! launched a joint internet service. In July 2003, BT also partnered with Yahoo!. In August 2005, Yahoo! and Verizon launched a combined DSL internet service.
In late 2002, Yahoo! began to improve its search services by buying other search engines. In December 2002, Yahoo! bought Inktomi. In February 2005, Yahoo! bought Konfabulator and renamed it Yahoo! Widgets, which were small desktop programs. In July 2003, it acquired Overture Services, Inc. and its search engines AltaVista and AlltheWeb. On February 18, 2004, Yahoo! stopped using Google's search results and started using its own technology.
In March 2004, Yahoo! started a program where commercial websites could pay to be listed higher in Yahoo!'s search results. This made money for Yahoo!, but some website owners didn't like paying, and the public was unhappy because these paid listings looked the same as regular search results.
In 2004, after Google released Gmail, Yahoo! increased the storage for all free Yahoo! Mail accounts from 4 MB to 1 GB, and for paid accounts to 2 GB. On July 9, 2004, Yahoo! bought an email provider called Oddpost to add a new, faster interface to Yahoo! Mail Beta. Google also released Google Talk, a voice and messaging service, in August 2005. On October 13, 2005, Yahoo! and Microsoft announced that Yahoo! and MSN Messenger would work together. In 2007, Yahoo! gave users unlimited storage for their emails.
Yahoo! kept buying companies to offer more services, especially for Web 2.0, which focused on user-generated content and social networking. Yahoo! Launch became Yahoo! Music in February 2005. On March 20, 2005, Yahoo! bought the photo sharing service Flickr. That same month, the company launched its blogging and social networking service Yahoo! 360°. In June 2005, Yahoo! acquired blo.gs, a service for collecting RSS feeds. Yahoo! then bought the online social event calendar Upcoming.org in October 2005. Yahoo! acquired the social bookmarking site del.icio.us in December 2005 and the playlist sharing community webjay in January 2009.
Yahoo! in the Mid-2000s (2006–2008)
Yahoo! Next was a place where Yahoo! tested new technologies that were still in their early stages. It had forums where users could give feedback to help develop these future Yahoo! technologies.
In early 2006, Yahoo! let users try out a new version of its homepage. However, it only worked well with Internet Explorer and Mozilla Firefox. Users of other browsers, like Opera, were not happy about this. Yahoo! said they planned to support more browsers later.
On August 27, 2007, Yahoo! released a new version of Yahoo! Mail. It included Yahoo! Messenger (which worked with Windows Live Messenger) and free text messages to mobile phones in the U.S., Canada, India, and the Philippines.
On January 29, 2008, Yahoo! announced that it was laying off 1,000 employees. This was because the company was struggling to compete with the leading search engine, Google. These job cuts affected 7 percent of Yahoo!'s 14,300 employees.
In February 2008, Yahoo! bought Maven Networks, a company that provided internet video players and video advertising tools, for about $160 million.
On November 17, 2008, Yahoo! announced that Jerry Yang would be stepping down as CEO.
On December 10, 2008, Yahoo! started laying off another 1,520 employees worldwide as the company dealt with a tough economy.
Microsoft Tries to Buy Yahoo!
Microsoft and Yahoo! had talked about merging in 2005, 2006, and 2007, but nothing ever happened. Experts at the time weren't sure if it was a good idea for the two companies to join forces.
On February 1, 2008, after Yahoo! turned down its friendly offer, Microsoft made a public offer to buy Yahoo! for $44.6 billion in cash and stock. A few days later, Yahoo! thought about other options, like merging with Google or a deal with News Corp. But on February 11, 2008, Yahoo! decided to reject Microsoft's offer. They said it "substantially undervalued" Yahoo!'s brand, users, investments, and future growth.
On February 22, some pension companies sued Yahoo! and its board of directors. They claimed the board was not doing what was best for shareholders by rejecting Microsoft's offer. In early March, Google CEO Eric Schmidt said he was worried that a Microsoft-Yahoo! merger might harm the internet's openness. The value of Microsoft's offer dropped to $42.2 billion by April 4 because Microsoft's stock price went down. On April 5, Microsoft CEO Steve Ballmer sent a letter to Yahoo!'s board. He said that if they didn't accept the deal within three weeks, Microsoft would go directly to shareholders to try and elect a new board that would agree to the merger. Yahoo! replied on April 7, saying they weren't against a merger, but they wanted a better offer. They also said Microsoft's "aggressive" approach was making their relationship worse.
On May 3, 2008, Microsoft took back its offer. During a meeting, Microsoft had offered to raise its bid by $5 billion to $33 per share, but Yahoo! wanted $37 per share.
Analysts said that Yahoo!'s shares, which were $28.67 on May 2, would likely drop below $25. On May 5, 2008, after Microsoft pulled its offer, Yahoo!'s stock dropped about 15% to $23.02 per share. This reduced its market value by about $6 billion.
On June 12, 2008, Yahoo! announced that it had ended all talks with Microsoft about buying any part of the company. Also on June 12, Yahoo! announced a partnership with Google for search advertising. After this announcement, many Yahoo! executives and senior employees planned to leave, as they seemed to have lost faith in Yahoo!'s plans.
On July 7, 2008, Microsoft said it would consider making another offer for Yahoo! if the company's directors were removed at the annual meeting on August 1, 2008. Microsoft believed it could negotiate better with a new board.
Billionaire investor Carl Icahn tried to replace Yahoo!'s board, calling them unreasonable. On July 21, 2008, Yahoo! reached an agreement with Carl Icahn, allowing him and two of his allies to join an expanded board.
On November 20, 2008, Yahoo!'s stock dropped to a 52-week low of $8.94 per share. This was almost 10 months after Microsoft's first offer of $33 per share.
On November 30, 2008, Microsoft offered to buy Yahoo!'s search business for $20 billion.
On July 29, 2009, Yahoo! and Microsoft announced a 10-year deal. Microsoft would have full access to Yahoo!'s search engine to use for its own search engine, Bing. Microsoft didn't have to pay any money upfront to Yahoo!. The day after the deal was announced, Yahoo!'s share price dropped more than 10% to $15.14 per share, which was about 60% lower than Microsoft's takeover bid a year earlier.
The Carol Bartz Years (2009–2011)
On January 13, 2009, Yahoo! named Carol Bartz, who used to be the executive chairman of Autodesk, as its new chief executive officer. Yahoo! tried to change its direction after Carol Bartz took over from co-founder Jerry Yang.
In July 2009, Microsoft and Yahoo! agreed that Yahoo!'s websites would use both Microsoft's search technology and search advertising. Yahoo! would then handle the sales of banner advertising for both companies. Microsoft would provide the search results, but Yahoo! would control how they looked on its pages.
On July 21, 2009, Yahoo! launched a new version of its front page called Metro. This new page allowed users to customize it and connect with other web services.
In September 2011, Carol Bartz sent an email to Yahoo! employees saying she had been removed from her job by the company's chairman, Roy Bostock. Tim Morse, the CFO, was named the temporary CEO.
The Scott Thompson Period (2012)
On January 4, 2012, Scott Thompson, the former President of PayPal, was named the new chief executive officer.
Job Cuts
In early 2012, after Scott Thompson became CEO, there were many rumors about big job cuts. On April 4, 2012, Yahoo! announced it would cut 2,000 jobs, which was about 14 percent of its 14,100 workers. Yahoo! said this would save about $375 million each year after the layoffs were finished by the end of 2012.
Lawsuit with Facebook
On March 14, Yahoo! filed a lawsuit against Facebook. Yahoo! claimed that Facebook was using 10 of its patents without permission. Facebook then sued Yahoo! back.
Company Changes
In April 2012, Scott Thompson sent an email to employees saying that customers should be Yahoo!'s top priority. He said customers included both users and advertisers. He also completely reorganized the company. This change took effect on May 1, 2012. Yahoo! was divided into three main groups: Consumer, Regions, and Technology.
The Consumer group focused on users and included Media, Connections, and Commerce. The Regions group focused on advertisers and covered three areas: Americas, APAC, and EMEA. The Technology group provided technology and support to the other two groups. The Corporate group (Finance, Legal, and HR) stayed the same.
Thompson Replaced by Ross Levinsohn
On May 13, 2012, Scott Thompson was replaced by Ross Levinsohn, who became the company's temporary CEO. In June 2012, Yahoo! hired Michael G. Barrett, a former Google director, as its Chief Revenue Officer.
The Marissa Mayer Era (2012–2017)
On July 16, 2012, Marissa Mayer, a former Google executive, was named Yahoo! CEO and President. She became the youngest CEO of a Fortune 500 company.
On May 19, 2013, the Wall Street Journal reported that Yahoo!'s board had approved buying the blogging website Tumblr for cash. This showed a new trend where big companies like Yahoo!, Facebook, and Google were buying smaller internet startups. These startups might not make a lot of money yet, but they help connect with large and fast-growing online communities. The Wall Street Journal said that buying Tumblr would give Yahoo! a "thriving social-networking and communications hub." Yahoo! paid US$1.1 billion for Tumblr, and its founder, David Karp, remained a major shareholder.
Yahoo! launched a new version of its photo sharing service Flickr on May 20, 2013, in Times Square, New York. They advertised it with the tagline "biggr, spectaculr, wherevr." Yahoo! also announced that it would give Flickr users a free terabyte of storage. The official announcement of the Tumblr acquisition was also made at this event.
In July 2013, Yahoo Inc bought Qwiki for $50 million. On August 2, 2013, Yahoo Inc announced it was buying RockMelt, a social web browser company. As a result, all RockMelt apps and services stopped working on August 31.
On August 7, 2013, Yahoo! announced that it would reveal its new logo on September 5, 2013. To celebrate, the company launched a "30 days of change" campaign, releasing a different version of the logo each day for 30 days.
Data from July 2013 showed that more people in the U.S. visited Yahoo! websites than Google websites that month. This was the first time Yahoo! had more visitors than Google since 2011. This data did not include visits to Tumblr or mobile phone usage.
On February 11, 2014, Yahoo! acquired a social diary company called Wander. On February 13, 2014, Yahoo! acquired Distill, a company that helps with technical recruiting.
On September 22, 2016, Yahoo! announced a data breach. Hackers stole information from at least 500 million user accounts in late 2014. The BBC reported this was the largest technical breach known at that time. The stolen information included names, email addresses, phone numbers, security questions and answers, birth dates, and encrypted passwords. The hackers also used fake web cookies to log into accounts without needing a password. On December 14, 2016, another data breach was reported. This one happened around August 2013 and affected over 1 billion user accounts. It is considered the largest discovered in the history of the Internet.
On January 9, 2017, Yahoo! CEO Marissa Mayer announced she would step down from Yahoo!'s board of directors if its sale to Verizon went through. She also announced that when the deal closed, Yahoo! would rename itself to Altaba.
