What went wrong for Yahoo

> In 1998, Yahoo turned down the opportunity to acquire Google for $1 million. Yahoo made six acquisitions that year, spending $107.3 million.

> In 2002, Google offered to sell again for $1 billion. Yahoo hesitated and Google raised its price to $3 billion. Yahoo declined at the higher price. Google went on to become a trillion dollar company.

> Yahoo attempted to acquire Facebook for $1 billion in 2006, but Mark Zuckerberg turned down the offer. Had Yahoo increased its offer by just $100 million, Facebook’s board would have forced Zuckerberg to take it. Facebook also became a trillion dollar company.

In inclined to believe that neither would have become trillion dollar companies if they had been acquired by Yahoo.

I do miss them being one of the biggest FreeBSD contributors. For a long time in the late 90s / early 2000s Yahoo was to FreeBSD what Netflix is now (and maybe a bit more). They used to host a lot of the FreeBSD build/test infrastructure and employed several src committers and they contributed heavily to a LOT of work that has made FreeBSD a viable OS going forward.

For example, they contributed heavily to the SMPng project (which made FreeBSD into a modern, multi-theaded kernel with fine grained locking). They even hosted the kickoff meeting: https://people.freebsd.org/~fsmp/SMP/SMPmeeting.html They employed Peter Wemm, who did the majority of the work for the AMD64 (eg, x86-64) port. And lots that I'm forgetting about probably..

I think the issue was the people running it were the type of people who are taught to ruthlessly look at a spreadsheet and decide if Coca Cola can invest X in marketing and product development they can expect to get Y back (with reasonable accuracy). Of course with software small teams can do big things so these calculations are almost impossible.

Investing a billion dollars in your search engine in ~2008 might be considered insane of course. We were told by Carol Bartz at an all hands that they had done the work on their spreadsheets and they could not compete with the investment Microsoft and Google were planning. It still annoys me to this day that there was no discussion or attempt to decide if the engineers and the company were up for the challenge with Google, even with less money. I'm not saying Yahoo! would have won, but to not even have bothered trying still irritates me - where is your vision? where is your fight?

Anyway this is my take on it, the management decided to just give up on being technically excellent and even being a software company at some point. The mind boggles why you would do this while software was eating the world and you had loads of fantastic engineering talent...

An underreported part of the Yahoo story is its relationship to India. I worked there during the Verizon years and heard the history. Yahoo was a forerunner of the "offshoring" of technology jobs to India. It moved lots of core operations to a small army of engineers there. They figured out that their American counterparts made substantially more money than they did, especially the middle managers. Waves of Indian employees began moving to Santa Clara and getting market rate wages. Suddenly, Yahoo wasn't saving as much money as they used to. I don't think it was a major factor in its overall financial decline, but it had some effect I'm sure. On a side note, I heard a couple of Indian engineers say they were moving back to raise their kids because they didn't like the cultural influences in our schools. There were many interesting lunchtime conversations about things like that.

It was only just over a decade ago I used to play lots of the online games hosted on Yahoo and it was great! I had just started dating my (now) wife and we used to hang out every evening in an online video conference and play online versions of Pool, Risk etc, and as it was all inside Yahoo's ecosystem we only had to login once and we could automatically play each other.

Going further back, Yahoo's web directory was also a good and fun way to explore the world wide web. When Google appeared, and its search was so good, the concept of "people don't need bookmarks any more" seemed to spread, but in the process the joy of discovery was lost. Rather like how browsing DVDs in Blockbuster means you could find something really cool by accident, but searching a database means you have to have an idea what you want to find to begin with.

I am still a Yahoo! pinger as well.

  ~  ping yahoo.com
  PING yahoo.com (74.6.231.20): 56 data bytes
  64 bytes from 74.6.231.20: icmp_seq=0 ttl=50 time=42.366 ms
  ^C
  --- yahoo.com ping statistics ---
  1 packets transmitted, 1 packets received, 0.0% packet loss
  round-trip min/avg/max/stddev = 42.366/42.366/42.366/0.000 ms

    ping 1.1

As a Y! employee for a couple of years - although my time was brief, I can say with confidence that had Yahoo successfully acquired Google or Facebook, both would have been destroyed in short order.

Another football in the Verizon Yahoo/Shuffle are those Verizon customers who were sold to Frontier but had verizon.net email addresses.

Verizon kept control of those lightly-maintained email accounts and pushed them into the Yahoo/AOL infrastructure. Users with a verizon.net email address had webmail access at mail.aol.com.

Verizon didn't make life easy. They changed POP/IMAP/SMTP servers every year or so. Just this May they changed again, from smtp.mail.yahoo.com to smtp.verizon.net - but the old servers still worked until the AOL outage 2 days ago.

During the years in between, customers got caught between AOL's mandate to use OAuth and Microsoft's refusal to support it in Outlook.

FF to now-ish and Verizon is purchasing those same FiOS customers back again. One more smack with the Verizon ping-ping paddle.

Just checked Marissa Mayer's X account, can someone explain why is her account not getting enough views/reach - https://x.com/marissamayer

She apparently has 1.4M followers with barely 20 likes. This was even worse a few months back.

Are those followers bought / dormant? Or is twitter suppressing it?

Yahoo literally did every wrong move and turned every move that could make it become successful again down, almost as if it deliberate. I can't believe it still exists.

In an odd turn of events I have ben one a regular user of Yahoo! despite how terrible the experience and content is. It shipped as a Safari default years and years ago and has remained in my neglected Safari bookmarks for no particular reason. I’ve recently reverted to using Safari on iPhone as my default mobile browser and used to rely on my recently used tabs for a quick dopamine hit. Several months ago Apple removed that from the new tab experience, putting my bookmarks front and center. So I use Yahoo. It’s mostly clickbait content, heavily monetized, with all of the excrement of 20 years of AdTech on display. Ads routinely load in the wrong unit size, or with a double quote character that breaks the sticky container making it impossible to view the next page of comments. Most often the ads are mobile redirects that just crash the page and lose your scroll position. It’s really a terrible experience to behold. At least I don’t use social media.

Everyone is a genius writing what went wrong but never have the guts to short it as it unfolds.

I wonder what went right with Yahoo Japan, and how it was so successful here that it's still a mainstay for many to this day

Related post I saw an hour after writing this: https://www.linkedin.com/posts/edmund-ho-1277b2125_yahoo-jap...

This doesn't actually answer what went wrong for Yahoo!. The main insight is that Yahoo! saw that it made money from traffic, so it bought traffic generators without regard for if the traffic could be profitable. I buy this argument, but Yahoo!'s problem was people stopped going to Yahoo!, and none of its acquisitions were big enough to offset that.

I recall the Zookeeper paper from Yahoo scientist which basically details a more useful version of Google’s chubby. I find reliability and design of Zookeeper fascinating these days cool kids use etcd mostly because of relatively complex protocol of Zookeeper (there is a few implementations but they lack the polish of Java client).

In summary, decades of failed leadership resulting in zero corporate focus.

They're the epitome of a corporate melange of services and products that resulted in far, far less than the sum of its parts.

I wonder how much macroeconomics and politics had to do with Yahoo's situation.

During this period, the US had been exporting large amounts of dollars to foreign investors (US going into deficit) and these foreign investors didn't know what to do with all those dollars so they dumped them onto the US stock market. This has been going on for decades. It was the premise of the Japan carry trade.

US companies like Google or Facebook would have had access to plenty of capital during this time and maybe it allowed them to be picky.

Yahoo did have a unique ability to smother any business that it acquired -- and I think the reasons go way beyond an inability to monetize them. In fact, I'd argue that it was actually Yahoo's fixation with short-term monetization strategies that eventually turned everything to dust.

Consider Flickr, which Yahoo bought for about $25 million in 2005. If you're a tech visionary, you look at this popular little photo-sharing site and say: "Wow, everyone's connectivity speeds are soaring, and we could morph this into a video site, too!" And then, maybe, you've invented YouTube.

Or, you look at the way Friendstr and Facebook are getting traction, and you say: "Wow, what if we built out easier commenting and a social-network feed with abundant sharing of popular photos among users' pals?" And then maybe you've invented Instagram.

But Yahoo's metrics-driven managers refused to stretch their brains in this direction. I've been told by two famous-name insiders at the time that Yahoo's approach to everything was to set short-term targets focused on existing metrics, with rigid focus on hitting quarterly targets. It was all about driving orderly growth of what was already there, rather than any desire to explore new and uncharted areas.

In essence, Yahoo had a Silicon Valley address but a Battle Creek, Mich., mindset. Purple logo aside, Yahoo owed a lot more to the way W.W. Kellogg had been running its cereal business for decades, as opposed to anything going on in the 650 area code.

del.icio.us was my favorite tool on the internet for a few years (perhaps even still in retrospect). And not far off from the same functionality as Facebook (today). Why purchase such a thing to shut it down?

Money which needed to be burned I guess (for accounting tricks).

As a ex-Yahoo! from 20 years ago, I have a very clear opinion about the downfall of the company: Yahoo! had spent years structuring itself as a "media" company - not a technology company - but nonsensically, it also wanted to be Google. Yes, Yahoo! had parts of the company that were extremely technologically advanced, but they hired Hollywood execs and MBAs to run the company through the 2000s - people who had no real technological vision at all.

Yahoo!'s greatest strength and primary role in the Internet could be summarized as this: It was the most useful site on the web. Users relied on it for their start page, email, finance, weather, news, sports, maps, casual multiplayer games, forums, instant messaging, answers, fantasy sports, evites, photos, and an amazing amount of search traffic. It was a one-stop shop for everything you needed online. Maybe not the best in every area, but always pretty good.

You know how Google starts and kills products constantly? Yahoo! rarely did that. It saw interesting business models, copied them or bought into them and kept them going and users loved them for it.

And all of this was profitable, just not Google-level profits. Remember Jack Welch's mantra of GE not having to be number one in every market as long as they were number two or three and were profitable? At one point, this was Yahoo! and they could have remained relevant to this day had they embraced this role.

But the company's divisions were siloed and competed against each other in a way that makes Microsoft machiavellianism seem like a Sunday picnic. And the leadership was obsessed with Google and wanted to outdo them, even though they had a completely different culture and mindset. It was never going to happen. Regardless, they ignored Yahoo!'s bread and butter services, confused their employees and customers, and generally ran the company into the ground.

Yahoo! needed strong leadership that understood the company's strengths and built on them to continue to be useful to web users. Sadly, that never happened.

I am reminded of LICRA v. Yahoo. Another puzzling choice of Yahoo's that seems very wrong in hindsight.

https://en.wikipedia.org/wiki/LICRA_v._Yahoo!

To me, Yahoo always seemed more trustworthy than Google or Facebook.

I feel like the correct, boring answer is "they didn't focus on getting people the best website for what they were searching for"

I think that Marissa Meyer had given yahoo back a bit of its lustre. That meant cutting dividends in favour of investment. Restoring a reputation takes time. I stopped taking an interest when she was ousted by impatient shareholders. I am not an insider, maybe I am wrong.

Does anyone have a good book recommendation on Yahoo? I’d love to read more on the people who ran it into the ground.

First Yahoo did Yahoo Serious, then Yahoo got did

I wasn't there but from talking with people working there it was a culture of waiting for the next paycheck and staying under the radar, not caring and not doing much work.

Some 20-30 people I chat with were all the kind you should immediately fire and escort out of the building. Some had their next job lined up already just in case. lol

Yahoo is still quite popular in Japan.

I think Yahoo faded into irrelevance since it viewed itself as a media company and not a technology company.

Many internet companies fancied themselves media companies in the 1990s and 2000s. They all are on the scrap heap now, some examples: AOL, Yahoo, Excite@Home, Lycos, iVillage, About.com.

The companies of the time that fancied themselves technology/infra/logistics did well: Google, Amazon, eBay/PayPal, Salesforce, Akamai, DoubleClick.

Of course any lists like this have selection bias, so maybe I am wrong.

"In 1998, Yahoo turned down the opportunity to acquire Google for $1 million."