
What Happened to Yahoo - yagibear
http://www.paulgraham.com/yahoo.html
======
mrshoe
Apple is very conspicuously absent from this article.

 _...the kind of single-minded, almost obnoxiously elitist focus on hiring the
smartest people that the big winners have had._

Is Apple a big winner, like Google, Microsoft, and Facebook (the other
companies he mentions repeatedly)? Bigger. (Check the last 1, 5 or 10 years on
Google finance for the GOOG or MSFT comparison. FB is not public, but...) Do
they have this obnoxiously elitist focus? No. They still manage to hire great
engineers, though.

 _So which companies need to have a hacker-centric culture?... any company
that needs to have good software._

I wouldn't say that Apple is dominated by a hacker culture at all. It's
dominated by Steve Jobs and a focus on design and attention to detail. Yet
that seems to produce much better software than Google or Microsoft, IMHO.
That's _very_ subjective, I realize, but the market seems to agree. At any
rate, Apple does produce _good software_.

So are the hacker culture and the elitist focus really necessary for a
technology company to succeed? Is Apple a complete anomaly while Google,
Microsoft, and Facebook are typical? What say you, pg?

I realize it's borderline suicidal to post an HN comment that simultaneously
calls out pg and lauds Apple, but it's criminal to completely leave the best
(imho) technology company out of a discussion about attributes of great
technology companies.

~~~
pg
I don't know enough about what it's like inside Apple now to say. Certainly
from what I've heard there used to be a hackerly culture in the past. I
remember reading how mystified and offended Gil Amelio was by it. But I don't
know what things are like now. Is there anyone here who can talk about it? Is
the atmos hackerly or corporate?

~~~
IdeaHamster
It's a very hackerly culture (in some ways still living off the inheritance of
Woz), but you won't ever hear about that for two reasons:

1\. Secrecy is part of the culture.

2\. Engineers work _hard_ at Apple, and many teams are _surprisingly_ small.
There are no 20% projects at Apple because nobody has the time.

~~~
nostrademons
2\. That is not all that different from Google.

~~~
mortenjorck
Most Googlers I've talked to call it the 120% project.

------
srslydude
[edit: this thread has some insightful replies by others that are worth
reading.]

I'm sorry, this may be PG's backyard, but I've gotta call bullshit. Note: I am
not a Yahoo employee or corporate shill.

1\. "At Yahoo this death spiral started early."

Apparently this death spiral took TWELVE YEARS (the WWW is 20 years old), and
Yahoo is still #1 (or #2) in terms of total properties on the web. How is this
a death spiral?

2\. "If there was ever a time when Yahoo was a Google-style talent magnet, it
was over by the time I got there in 1998."

Are you kidding me? You're implying all the current Yahoo engineers are
idiots? Then how come each piece of code they release is revered, lauded and
used by everybody?

Speaking of talent: Yahoo got best paper at EVERY data-related conference in
2010. No single lab(Google,MS) or university(Stanford etc) has ever done this.
Clearly you can achieve this without talent, pg!

3\. "In the software business, you can't afford not to have a hacker-centric
culture. Probably the most impressive commitment I've heard to having a
hacker-centric culture came from Mark Zuckerberg, when he spoke at Startup
School in 2007."

Which company is responsible for inventing the term "Hack Day": Yahoo. Which
is the only company to _promote_ hacking culture to students? Yahoo. Yahoo !=
Hacker-friendly? WTFFF!!! (edit:goog does soc, but it doesnt have engineers
travel around the world teaching kids hands-on like yahoo does)

4\. Google and Apple are shiny and get all the attention. Yahoo's the
internet's underbelly. It's audience may not be SF hipsters, but they exist
and there are a lot of them. Just because they're not like you doesn't mean
they dont exist. Just because Yahoo doesnt cater to you doesn't mean it
doesn't exist.

5\. pg's product got hosed after inclusion into Yahoo. This happens. Reading a
Yahoo critique from pg is like reading a Google critique from Evan Williams
(Blogger), or a Google critique from the Dodgeball guys. It's a biased
opinion.

6\. It's a miracle Yahoo has survived for so long despite being criticized by
the media /market for more than half its lifetime. The only other company that
has had it worse was Apple, when they fired Steve Jobs. Yahoo doesnt have a
Steve Jobs, and has been managed badly, but the engineering is SO GOOD that it
STILL does a good job overall.

~~~
pg
I never implied all the Yahoo engineers are idiots. In fact I explicitly said
the opposite: that the quality was uneven. Uneven means some good, some bad.

Also, Viaweb didn't get hosed after being bought by Yahoo. It prospered
enormously. I don't bear them any ill will.

~~~
ratsbane
I'd like to hear you talk more about what's happened to Yahoo stores. I worked
with a Yahoo store (side consulting) for about five years now. Your Yahoo
essay seems consistent with what I've noted. The Viaweb/Yahoo Store thing was
very good in the late '90s but they haven't changed much since then and it's
very dated now. I think they're coasting on the revenue, which I imagine is
slipping away to eBay, Amazon, Shopify, etc.

------
tailrecursion
In 2002, Yahoo! began a serious effort to compete with Google in search by
buying Inktomi (plus Altavista and FAST). In what must have been early 2004, I
came over with the rest of the Inktomi crew to work on search. The Inktomi
people were top notch, Yahoo! seemed earnest about doing what it took to go
head to head with Google, and the integration efforts were done really well.
While I was there I worked in an island of Inktomi people (plus some from
Altavista), and I repeatedly got the impression that Y! people, technical and
otherwise, were a little soft, maybe even complacent, relatively speaking.

I do feel Y! did a great job -- and made a great decision -- in integrating
its search acquisitions; but those acquisitions threw into sharp relief what
Y! really was. It's hard to get into too much trouble when all you're doing is
throwing horoscopes onto web pages; but Yahoo! never struck me as being
serious about software, and as Paul says, they didn't seem to think that was a
problem.

Somewhere in 2005-2006, Y! made an attempt to revamp its search ad services
with a large-scale software project called Panama. It was going to do a lot of
things, including ad ranking refinements to improve revenue per query, and
allowing advertisers to create more complex ad campaigns. This project seemed
to undergo huge troubles, and I wonder if it was ever completed in any real
sense, because I heard so little about it, and everything I heard suggested
disaster.

Honestly I don't know if the fruits of Panama -- such as improved auctions for
ads on search result pages, which is a critical thing -- were ever deployed.
But a couple years later they made the Microsoft deal. Over the last couple
years, select people at Y! have moved on to Google, and many many others are
now at Microsoft.

~~~
nl
Panama was eventually deployed (end of 06:
[http://techcrunch.com/2006/12/13/yahoo-begins-panama-roll-
ou...](http://techcrunch.com/2006/12/13/yahoo-begins-panama-roll-out-in-the-
us/)), but it didn't compare well to Google's offerings in that it still
didn't give as good relevancy for advertisers.

------
strlen
> _" You can get programmers who would never have come to you as employees by
> buying their startups. But so far the only companies smart enough to do this
> are companies smart enough not to need to."_

Yahoo did do this through the Inktomi (Yahoo Search, 2003-2010) acquisition.
I've worked in that organization and learned a tremendous amount from the
people. At that time the hiring bar had been considerably raised from what
Graham describes (I have no idea whether that was the rule or the exception at
that time, I was there 8 years later), nobody was shy of rejecting weak
candidates. Much of the knowledge did diffuse to rest of the organization and
it's important to note that along side the "dot-com-wannabe-millionaire-
vesting-in-peace" crowd the essay describes, there _was_ plenty of genuine
technical talent (anyone who has worked there can attest to presence and
influence of hackers).

Unfortunately, for many reasons, that talent has slowly bled out. There was
also a great amount of friction between Search and rest of the organization
e.g., resistance (by Search engineers) to dog-fooding of what was often
inferior technology. Search was, however, able to maintain a different
platform, remaining on Linux, with their own platform/software stack, but were
some "wtf" moments like porting and forcing the adoption of a custom user
space locking library from FreeBSD when Linux already had futex (on the other
hand, the fact there was a custom locking library built in a "media company"
does say something).

The other key mistake made is that they would position bright, capable new
hires in areas that weren't directly correlated to revenue and treated as cost
centers. That just seemed highly illogical to me. It's a mistake that's often
difficult to fix: once young graduates are used to working on glamorous
projects, it's much harder to get them to work on more mundane, but revenue
critical projects such as advertiser systems. Google's strategy of a uniformly
high hiring bar (vs. some teams hiring people other teams rejected for roles
involving the same skill-set) and assigning hires to business priority
projects (while allowing individuals to transfer if the project wasn't their
cup of tea, with proper incentives in place for some projects) seems to be (at
least from an outside point of view, I've never worked at Google) better.

~~~
blantonl
_Unfortunately, for many reasons, that talent has slowly bled out_

This reverts back to the original article. Poor _strategic_ leadership.

------
shalmanese
"In technology, once you have bad programmers, you're doomed. I can't think of
an instance where a company has sunk into technical mediocrity and recovered."

In any conflict, there is always a risk of fighting the last battle. I see
today many companies, inspired by the lessons learned from the first dot-com
bubble, making the opposite mistake; thinking that they need to be a
technology company when they're really a experience providing company.

Twitter is the refutation to pg's thesis. Despite their initial technical
incompetence, they managed to attract a top-notch technical team because they
managed to deliver a crawl-over-broken-glass experience (it's so compelling
people are willing to crawl over broken glass to experience it, see also:
craigslist, plentyoffish).

It was interesting attending the YC work at a startup day and seeing RethinkDB
present. Their pitch, in not as many words was basically "Look, we're the only
company here that is actually working on a problem that demands world-class
engineers (in the non-debased sense of the term)". For most of the other
startups, despite all their bluster, the technology platform they were using
was commoditized and technology was not their differentiating factor.

~~~
encoderer
I disagree with your "incompetent" assessment of Twitter.

First, there's a lot of false info out there about what parts of Twitter were
built using which technologies and why it had uptime issues.

Second, their issue was massive scalability. A high-class problem.

~~~
shalmanese
I've talked to people who currently work at twitter who are pretty open that a
large part of their job is paying down the technical debt from the early days.
The engineers who were at twitter in the early days were by no means bad but
it's pretty open within the company that they weren't "world class"

------
sh1mmer
Disclaimer #1: My job is technology evangelist for Yahoo! So refuting this is
probably the definition of my job.

Disclaimer #2: This is my own completely unsanctioned opinion and does not
necessarily represent Yahoo!'s views or opinions.

I'm obviously biased here, but I have a great respect for HN and PG so I
wanted to talk about this.

PG accuses Yahoo! of two things right at the very top of the article and the
rest of the article is more details on those things. They are a) access to
easy money removed Yahoo!'s desire to find the next big thing b) ambivalence
about being a technology company.

I'm not going to substantially repute a) because I think it is true. However,
I think it's a pretty big ask to expect someone being successful to see past
the current success to the next big win. PG admit's neither he nor Larry and
Sergey really understood how big search was. As such I feel it's a slightly
ad-homonym attack to blame Yahoo! for not being Google. We didn't win the big
prize, but we also aren't AOL, Lycos or Ask.com either. Just because we didn't
become Google doesn't mean Yahoo! has failed.

As an engineer though PG's second point strikes me as deeply unfair. I joined
Yahoo! in 2004 in the UK. The team I joined was exceptional. For a team of 30
people there were about 15 book authored by the team. I personally had written
W3C standards and multi Web Standards Project founders littered the team. The
rest of the team were coders, much better than I.

Now I work in US for the developer network and I get to see the vast range of
technologies that Yahoo! does from Y! Research through to the engineering
teams. There is a reason 'Hack Days' started here, because the engineers here
are passionate about those technologies and playing with them.

I'm also on the Yahoo! Open Source Working Group and I see all the open source
we put out of the door. We should probably do a better job of telling people
how much, but it's a lot more than you think. I find it troubling that PG who
left the company 10 years ago, can now, accuse me and my colleagues of apathy
about technology when it's so fundamental to what Yahoo! does.

I think what PG is really talking to is two things. Firstly, it's important
for a company to have a 'core competency'. Describing ourselves as a media
company makes it clear to our investors and our employees the field of play.
Secondly, the ease at which a cash-cow, such as Google's search war chest,
allows them to make their presence felt in the technology community reminds
people about all the things they touch. I am both proud an envious that Google
have the freedom to do that, but again, it doesn't mean Yahoo! failed because
we don't.

~~~
321speak
My sense from meeting Yahoo devs is that they are ok, in that they have the
credentials, but didn't seem very passionate or excited about new tech. Can
you bring up some examples where Yahoo is pioneering a new field? (search,
media delivery, social etc, what ever Yahoo as a company is really excited and
passionate about internally...)

~~~
sh1mmer
How about Hadoop? Sure Google released the Map/Reduce paper, but it was Yahoo
who wrote 90+% of the current industry standard.

What about Node.js? That's pretty en vogue right now. We are currently hiring
Node.js engineers and have a number of core contributors in various parts of
the company.

YUI and our other front-end work at Yahoo! is world class. People like
Crockford are considered leading experts in doing quality front-end web
engineering.

Our data centers are also cutting edge, I'm not an expert in this area, but
I'm told we are at least on par with Google. Some of the new project are
completely cooler-free, the whole building being designed to control heat and
power flow.

~~~
bambax
Yahoo Search API (whatever its real name is... BOSS or something?) is also
fantastic and much superior to Google's (which isn't even really a search
api).

~~~
davidu
Agreed, it's awesome. Yahoo should be focusing resources on it.

------
PanMan
I heared that when one of the large investment banks (forgot which one) got a
new CEO, the first thing he did was stopping all IT outsourcing projects. He
did realize a modern bank is, in fact, a software company, and you shouldn't
outsource your core activity.

~~~
mediaman
I believe you're referring to Jamie Dimon, now of JPMorgan Chase, who canceled
a $5bn IBM IT outsourcing contract because he believed that technology was a
core competency of a modern bank.

~~~
ivenkys
Yes - he did cancel the Billion Dollar contract but not because I.T suddenly
became a core competency. Non-front office facing I.T is being pushed to
cheaper locations - primarily to Scotland and Southampton in the UK and is not
considered a Core Competency , its outsourcing in a different form , its
called IN-Sourcing.

The primary reason for the cancellation of the contract was the sheer amount
of beauracracy IBM imposed. Their modus-operandi was - pick up staff who were
working in "non-critical" areas and make them report to IBM managers. So now
all-of a sudden if i need to get something from our DBA i can't walk upto him
and ask him , i need to raise a request in a god-awful system which goes to
his manager who would be sitting in a remote location in a different time-zone
"managing" the work-load of the DBA who sits 5 feet away from me. In the
majority of the cases for access to sysadmins and DBA's who were an integral
part of your team before you now had to go through this route.

I will leave the readers to draw their own conclusions to this marvellous
scheme.

~~~
StuffMaster
I conclude that the marvelous scheme was, in fact, slightly non-marvelous.

~~~
jbooth
Yeah, but it probably worked out pretty well for IBM, and lazy/mediocre
managers could pretty easily abdicate responsibility for things while not
getting fired for buying IBM.

------
ojbyrne
Hindsight is easy. If you look back at the two decades before 1998, it was
basically Microsoft, Intel (and to a lesser extent Oracle) buying (hopefully)
or crushing every single engineering-centric company out there. They used good
ol' monopoly power and FUD, which is pretty far from an engineering culture.
Borland, Lotus, Apple, etc. IBM had successfully made a transition to a
service company and the conventional wisdom was that that was all that saved
them from being crushed in turn. Jerry Yang was just following the
conventional wisdom.

EDIT: Most importantly they had just witnessed the spectacle of Netscape, a
company that seemed unstoppable, just completely buried by MS.

------
gojomo
PG: "But [Yahoo] had the most opaque obstacle in the world between them and
the truth: money."

Sounds like yet another variant of Upton Sinclair's Law: "When a man's
paycheck depends on his not understanding something, you can depend upon his
not understanding it."

~~~
portman
The actual quote, from _I, Candidate for Governor: And How I Got Licked_ :

"It is difficult to get a man to understand something, when his salary depends
upon his not understanding it."

A terrific read. <http://www.amazon.com/dp/0520081986>

------
zmmmmm
I find it interesting that Yahoo is considered not to have a "hacker" culture
when they produce things such as YUI, YQL and YSlow which seem to have no
reason to be there other than that they think of themselves as a company that
has hackers and coding in their DNA. I guess these are small examples in the
large scheme of things but it still seems odd that there is this disconnect -
at the high level, they are just media company, at the low level they are
right there in the hacker community producing, I would say, above their
weight.

------
gojomo
Rich Yahoo in 1999 overlooked the value of search.

Rich Google in 2004 overlooked the value of social networking (both their in-
house hit Orkut and outside services).

~~~
matthew-wegner
What is Rich Facebook going to overlook?

~~~
mixmax
In a few years it will be glaringly obvious.

~~~
wolfhumble
It is easy to be a general AFTER the war.

------
sliverstorm
As far as I was concerned (admittedly I was still a kid at the time), all that
mattered was the Yahoo homepage was garish and full of ads, and the results
were hard to sift through (because they were full of 'sponsored links' and the
page was equally garish). Google was the antithesis of all that, and that's
why I used, liked, and rooted for Google.

~~~
forgottenpaswrd
That's exactly what I felt. Google respects me(no flashing ads), I respect
Google.

I was a kid too when I used Altavista, it was a great search tool back in the
day... until they f _ck_ d it totally.

I had seen it happen with other services like ftpsearch(you know the name of a
file, you got it instantly).

When I saw the first Ad blinking on my face(Altavista put suits on place,
"monetizing stuff") I discovered reading on searchlores "Google": It was so
easy and powerful and NO annoying ads!!

I couldn't believe it, and expected it to surrender to the MBAs forces soon as
the other had. But they got money to buy some freedom.

------
Alex3917
"It's probably too much to hope any company could avoid being damaged by
depending on a bogus source of revenue. But startups can learn an important
lesson from [the fact that] in the software business, you can't afford not to
have a hacker-centric culture."

I think Yahoo made the correct decision on both counts. As far as depending on
a bogus source of revenue, all new advertising mediums are massively
undervalued at first, then massively overvalued, and then only eventually even
out. It would be a huge mistake not to plan your entire business model around
this cycle. Yahoo did this, and they made literally billions of dollars
because of it. Sure, if they had chosen to go into a different sort of
business they could have perhaps extended their reign, but it's hard to argue
that they made the wrong choice.

As for not having a hacker-centric culture, I think they made the right choice
here as well. Every time Yahoo bought a startup, their stock rose more than
they paid for the company, meaning every time they acquired their tech through
a buyout the execs took home massive paychecks. Whereas every dollar they
spent on elite programmers was money out of their pocket.

I think the lesson here, if anything, is that you can make mostly the right
decisions and your business can still decline over time.

Incidentally, I heard a great story about one of the Yahoo sales guys.
Apparently he bought his own inventory at the end of every month to meet his
quota, because the stock he was getting vested was worth more than the 100K or
so he was required to fork over each month. (Because he obviously couldn't
actually make any sales.)

------
plinkplonk
"Most technology companies eventually get taken over by suits and middle
managers."

Interesting statement. I suspect this process is well under way at Google
these days.

But _why_ does this happen? Is it just that once companies grow large enough,
you need middle managers, (who then consolidate power and control)? Is there a
more nuanced explanation?

~~~
enneff
"I suspect this process is well under way at Google these days."

What's your basis for this speculation?

~~~
plinkplonk
""I suspect this process is well under way at Google these days."

What's your basis for this speculation?"

Conversations with friends who work there mostly. One of the advantages of
being older is that you know people in most companies who talk to you off the
record over beer, sometimes in very "high" positions.

~~~
mkramlich
I had a similar realization this year. For the first time I realized I knew
people who currently work at, or very recently just worked at, all the big
software companies: Google, Amazon, Apple and Facebook. It may be partly
helped by age, but also perhaps if you've ever worked at a large company with
a ton of engineers, then leave, and those seeds scatter, eventually at least
one ends up taking root at each of the big shops.

------
ljlolel
Funny. I made a similar comparison with Facebook. PG said that Yahoo was a de
facto pyramid scheme, although ponzi scheme is a better analogy:
<http://blog.jperla.com/facebook-is-a-ponzi-scheme-0>

>> By 1998, Yahoo was the beneficiary of a de facto pyramid scheme. Investors
were excited about the Internet. One reason they were excited was Yahoo's
revenue growth. So they invested in new Internet startups. The startups then
used the money to buy ads on Yahoo to get traffic. Which caused yet more
revenue growth for Yahoo, and further convinced investors the Internet was
worth investing in. When I realized this one day, sitting in my cubicle, I
jumped up like Archimedes in his bathtub, except instead of "Eureka!" I was
shouting "Sell!"

------
tptacek
Summing up:

* The Innovator's Dilemma, _and_

* Mistaking a key driver of innovation and growth (software development) for a cost center.

------
kvs
Here is a Forbes article from 1998 Spring about Anil Singh and his team's
perspective: <http://www.forbes.com/asap/1998/0223/068.html>

~~~
revorad
Choice quote:

 _"I'm here to generate sales for the company, and whether that means we have
good products, bad products, or indifferent products," he says, "I have a job
to do -- meeting our plans from a top- line standpoint."_

------
10ren
Aside: sorting advertisements by bids originated with goto.com in Feb 1998
(from Idealab), years before Google started using it.

It was a great idea, original and effective, though I'm not how to feel about
their patenting it. If they hadn't, they would have been copied and crushed
without credit. <http://en.wikipedia.org/wiki/Goto.com#Origins_of_Goto.com>

As it was, they got 2.7 million shares from Google's infringement, and later
acquired by Yahoo for $1.63 billion.

------
mixmax
_"in the early days Facebook made a point of hiring programmers even for jobs
that would not ordinarily consist of programming, like HR and marketing."_

No offense, but hiring programmers for HR seems like a terrible idea. HR
people's main capacity is to understand people and relationships, not exactly
something programmers are known for being good at.

~~~
pxlpshr
If most (all) of your early employees are hackers, how does it not make sense
to hire a hacker to manage HR?

~~~
andrew1
Because different jobs need different skill sets? Why does being a 'hacker'
make you qualified or even appropriate to manage something like HR or
marketing?

~~~
pxlpshr
How many hackers are CEO's and how many of those were ever qualified for that
job at the start?

~~~
pxlpshr
Down vote and no opinion? Hmm.

<http://news.ycombinator.com/item?id=1596814>

------
drawkbox
How Software Companies Die:
[http://www.zoion.com/~erlkonig/writings/programmer-
beekeepin...](http://www.zoion.com/~erlkonig/writings/programmer-
beekeeping.html)

------
bdr
Don't miss the allusion ("Theirs was not to reason why") to the poem The
Charge Of The Light Brigade. Into the Valley rode the 500. Very funny.

------
newmediaclay
Great post. This left me wondering -- what do you think would have happened if
Yahoo had been successful in their $1b bid for Facebook? Would FB have turned
the company around by instilling a start-up/hacker culture. Or would it have
just died there, infected by Yahoo?

------
GFischer
It's bad to nitpick, but I take issue with the quote "It's hard for anyone
much younger than me to understand the fear Microsoft still inspired in
1995.":

I was born in 1981 and I clearly remember the fear and awe Microsoft inspired
in 1995 :) .

There were articles about how Bill took things personally and crushed
competition.

I read the 1992 biography "Hard Drive" ( [http://www.amazon.com/Hard-Drive-
Making-Microsoft-Empire/dp/...](http://www.amazon.com/Hard-Drive-Making-
Microsoft-Empire/dp/0887306292/ref=pd_sim_b_3) ); Bill was kind of a role
model back then (a successful and well-known technologist).

Edit: See also ojbyrne's comment:
<http://news.ycombinator.com/item?id=1596737>

------
demodifier
<http://www.wired.com/wired/archive/15.02/yahoo.html> Anyone remember this
article in Wired from way back in 2007? It goes into the details of the
technology company vs a media enterprise dilemma of Yahoo as identified by
Paul Graham in his piece and how then CEO Terry Semel messed it all up.

------
marknutter
Somebody please help poor pg and design him some prettier buttons than those
purple beveled monstrosities..

~~~
pg
It's Yahoo Store. Those buttons were slick in 1996.

~~~
jsyedidia
I wrote some Perl code that improved the look of those buttons (based on
Trevor Blackwell's engine) at Viaweb back in 1997. I distinctly remember Paul,
Trevor and others gathered around my screen to admire the new buttons. So
nobody criticize the Yahoo Store buttons!

~~~
photon_off
I remember waiting for them to load on 56k. You really had to go all out with
the bevel instead of regular text?

~~~
jsyedidia
The images that are used by a Yahoo Store website are created once and for all
and then stored as very small .gif files. For example, all the buttons in Paul
Grapham's web-site are stored as the .gif file
<http://ep.yimg.com/ca/I/paulgraham_2117_16484650.gif>. You can download that
file for yourself and examine it and learn that it has a size of 2896 bytes.
So even on a 56K connection, it should take a fraction of a second to download
all of the buttons Paul uses.

~~~
photon_off
It's possible that my memory is faulty on the matter. I was probably around 14
or 15 at the time, but I remember looking for a nice heatsink/fan combo so I
could try overclocking, a project which would later lead me to make a really
awesome water-cooling contraption (it involved a sizable A/C radiator soaked
in ice water, hooked up to a doubly stacked set of 60w and 80w peltier coolers
-- I ultimately had problems with frost which ended up frying things).

At any rate, I (think) I remember waiting forever for each individual and
unappealing icon to load at this store. It's completely possible that the
store was a Yahoo Store knock-off, or that it was before the optimization you
mention. I guess we'll never know, since I've probably cleared my cache since
then.

~~~
jsyedidia
It wasn't Yahoo Store. We always had optimized buttons because of Trevor's
engine. It was one of our key advantages.

------
ariels
There is no single Yahoo (part of the identity problem Yahoo has) and
therefore you cannot generalize a culture across Yahoo.

Each division within Yahoo really had its own culture. The search group
culture was entirely different from the media (news, sports, etc.) group which
was entirely different from the listings (real-estate, etc.) business.

A group like Yahoo Search (prior to its sale) was an entirely tech centric
organization. Many of the top engineers from Yahoo Search Yahoo! are now co-
founders within top Silicon Valley startups.

------
cletus
Yahoo went bad because:

1\. It has no notable engineering foundation;

2\. It has no clear vision about what it is and where it's going; and

3\. Like Microsoft, it's put a business person in charge, which is the death
knell of any tech company. You need someone with a technical foundation or a
product person, not a business wonk.

~~~
werrett
Yahoo went bad because a business person was put in charge? From my point of
view I would say that is generally the rule rather the exception. Particularly
for those firms wanting to go public.

I'm going to defer to mixmax's quip about putting a gardner in charge of a
gardening firm's finances [1] as the alternative.

You can't argue Jobs or Schmidt are not business people. Although Schmidt
could be used to either refute or backup your point depending on how you feel
about Google these days.

[1] <http://news.ycombinator.com/item?id=1596850>

~~~
philwelch
Schmidt has a technical background though. Among other things he was the co-
author of lex.

------
wilschroter
I think there's something to be said for focusing on what the market rewards,
and clearly the market wasn't rewarding yahoo for having great technology in
1998. Nor did it reward Google for having great enterprise search. You can't
fault Jerry and David for not seeing search when the market had clearly
supported banners with no basis for search as a viable model yet.

~~~
paul
When did Google have great enterprise search?

~~~
seregine
I remember trying a Google intranet search "appliance" around 2003 and it was
way better than the previous (homebrew?) intranet search we had.

------
bl4k
Relevant question on Quora: Why did the web services (Web 2.0) group at Yahoo
faill after acquiring Flickr, delicious, upcoming, mybloglog et al:

[http://www.quora.com/Why-did-the-web-services-group-at-
Yahoo...](http://www.quora.com/Why-did-the-web-services-group-at-Yahoo-fail-
after-acquiring-Flickr-Delicious-Upcoming-MyBlogLog-and-others)

------
yurylifshits
What Yahoo employees think about Yahoo:
<http://www.glassdoor.com/Reviews/Yahoo-Reviews-E5807.htm>

------
stcredzero
_So which companies need to have a hacker-centric culture? Which companies are
"in the software business" in this respect? As Yahoo discovered, the area
covered by this rule is bigger than most people realize. The answer is: any
company that needs to have good software._

In my time, I've heard and seen an number of non-software companies choke,
stumble, and even become acquisition targets because of bad software. Budget
car rentals was one that immediately comes to mind that I can actually talk
about. For awhile I had a spate of bad customer service experiences where the
reps explained that "our system crashed."

If PG is right, all companies are going to need a hacker-centric culture!

Another takeaway from the article: Bogosity kinda works, but only on shorter
timescales and for a minority of participants.

------
markbao
> _"I remember telling David Filo in late 1998 or early 1999 that Yahoo should
> buy Google, because I and most of the other programmers in the company were
> using it instead of Yahoo for search. He told me that it wasn't worth
> worrying about. Search was only 6% of our traffic, and we were growing at
> 10% a month."_

I'm assuming that their other 94% of traffic came from their content/media
business, mail, and other portal-related activities. Since search seems to be
a large part of the internet now, has their numbers changed today, or have
they stayed about the same?

And search was such a small thing back then—did Google set the example for
search becoming one of the most important actions on the internet?

~~~
kenjackson
Search has always been important to the web. But as it wasn't at all sticky,
it didn't seem to have money making value. This is why Google originally tried
to do enterprise search. NOBODY got that targeted ads via search was the way
to go.

And if Search didn't turn out to be a big money maker via ads, Yahoo would
probably still be the biggest web company and Google would probably be a niche
company last FAST -- making a profit, but not being the new software power.

------
maxklein
I really don't get these Yahoo is dead stories. It's still the biggest site in
the world if all it's properties are put together.

~~~
edash
[http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...](http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1281573170623&chddm=589628&chls=IntervalBasedLine&cmpto=NASDAQ:YHOO&cmptdms=0&q=NASDAQ:GOOG&ntsp=0)

Saying "Yahoo is dead" (pg didn't, btw) is a sensationalist way of saying
"Yahoo is in a slow, steady decline."

To predict this, look at the leading indicators:

    
    
      - new products
      - strategic acquisitions
      - flow of talent
      - company morale
      - growth relative to competition
      - positions in key emerging markets
    

Yahoo seems to be struggling in all these areas.

Also, using "biggest site" as a metric is one of the problems with Yahoo that
pg mentions in this article.

~~~
elblanco
It probably doesn't hurt to look at one of Yahoo's contemporaries along the
same metrics, AOL.

~~~
notahacker
it probably looks healthier still when compared with the traditional "media
companies" they stole the brand advertising market share from.

------
hrabago
So Yahoo's problem was they were trying to get big, and one way was to call
themselves a media company (earn ad dollars, avoid MS radar). However, by
doing this, they stopped acting like a technology company, and lost their
focus on technology and solutions, but rather chasing the next banner ad
buyer.

In contrast, Google was concerned about perfecting its search product, and
therefore was focusing on what would help in that regard (hackers), which
helped sustain its hacker culture.

------
jacquesm
Yahoo! is definitely not beyond being turned around, though it will take a
huge effort.

------
grandalf
Try logging into yahoo domains. It's nearly impossible. I think Yahoo's
problems are 100% UI and navigation related.

------
netcan
"In the software business, you can't afford not to have a hacker-centric
culture."

I think you have to tread carefully in an area like this if you are a
programmer. Many opportunities to to confirm a bias.

First, the world is not composed of productive hackers and politicians. In a
media company, for example, there are writers, producers, actors, etc. Some of
them brilliant. A good strategy for a media company could be to have the best
of these.

Second, it's not always obvious what business you are in. I think this is
especially for startups because they don't have a big version of themselves to
look at. If you are a budding fast food chain, you know what business you are
in and you've got examples. Yahoo didn't.

Not all internet companies turned out to be technology companies. Not all such
companies in the future will either.

I'm sceptical that Yahoo was ever a great media company either.

------
msort
How about the 3rd universal factor: growing too big too soon?

------
5teev
I would remind people that PG's credibility as a successful "big thinker" is
largely based on the cash he made winning the dot-com lottery by selling his
first company to people who, as he says, had little idea of, and less interest
in, what they were buying.

------
justlearning
"But they had the most opaque obstacle in the world between them and the
truth: money."

rings true for humans too.

------
shalmanese
From Quora: [http://www.quora.com/How-valid-are-the-reasons-for-Yahoo-
pro...](http://www.quora.com/How-valid-are-the-reasons-for-Yahoo-problems-
mentioned-in-Paul-Grahams-new-article-What-Happened-to-Yahoo-Are-they-still-
valid-in-current-Yahoo)

The main point of Graham's article is that Yahoo! didn't have a hacker-centric
culture. If there was a time when that was true, it must have been before I
joined.

A company without a hacker-centric culture doesn't encourage the kind of risk-
taking and experimentation I saw when I was at Yahoo! Search. As an engineer,
I had direct input into product features at every level, from ideation to
design to implementation to launch. If I had a crazy idea, I was encouraged
not just to tell people about it (up to and including executives), but to
implement it and see if it tested well with users. I was able to add my own
personal touch to parts of the product (sometimes big parts) without needing
to ask permission or wade through excessive red tape.

This may not sound impressive to someone who's used to the way things work at
startups or small companies. But this was at one of the largest Internet
companies in the world, on one of the most visited websites in the world. For
Yahoo! to give me and other engineers the kind of freedom and power we had is
not normal for a company or a product that operates at this scale.

------
elblanco
The essay seems to draw the conclusion that the difference between Yahoo and
Google was more or less a matter of historical happenstance. Google did well
because at the time Google was being built, they simply weren't (and couldn't
be) part of the typical business model of the day, while Yahoo simply became
trapped by it.

------
evanjacobs
"The worst problem was that they hired bad programmers."

Can you provide any specific examples of how bad programmers hurt Yahoo?

~~~
jrockway
Bad programmers wrote a bad search engine, and Yahoo lost all their traffic to
the good search engine?

~~~
strlen
> Bad programmers wrote a bad search engine, and Yahoo lost all their traffic
> to the good search engine?

Yahoo didn't have their own search technology, until acquisition of Inktomi in
2003 (they used Inktomi to serve their results prior to using Google, whom
they used until ~2004).

Correct way to put it is "they didn't hire enough good programmers to build a
search engine". A web search engine isn't something bad programmers can build.
They acquired a _great_ search engine (the algorithms were, IMO, better than
Google's and more immune to gaming, they were a first distributed search
engine paving the way for Google's "cluster of commodity hardware"
architecture [1]), but it came too late.

[1] See
[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.83....](http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.83.4274&rep=rep1&type=pdf)
for what I mean by "paved the way". Their mistake was using Solaris on SPARC
(appropriate choice in 1996) for a few years too long (Google started on
Linux/x86 right away, Inktomi transitioned by the time of Yahoo's
acquisition).

~~~
btilly
More than that, Yahoo's deliberate strategy at the beginning was to not build
their own search engine, but just to buy the services of whatever was best out
there. At one point that was Alta Vista. Later it was Inktomi. After all
search was a well-studied problem, and they thought it was pretty much solved.
So why put a lot of energy into building expertise in how to build what they
thought would be a commodity.

Then Google demonstrated that search was not a solved problem, search was not
a commodity, and it was too late.

~~~
encoderer
I don't think anybody thought search was "solved" in the 90's, nor today.

~~~
btilly
Read _Founders at Work_. You'll find that the founders of Yahoo thought of it
that way.

------
Aegean
I loved the last sentence on hacker culture:

"But there are worse things than seeming irresponsible. Losing, for example."

------
ruang
Difference is the focus:

Business people -> ROI,IRR -> fast profits

Hackers -> hard-to-do -> sustainable profits

------
fleaflicker
Very similar to AOL's situation except they went even further in becoming a
media company.

Dial-up access was their inflated source of revenue and their focus for much
of the 2000s was on ad sales and not hacking.

------
toddh
They hired many very good programmers. That's just crazy to say otherwise. But
if you lead programmers into a dessert you can't blame the troops when you die
of thirst.

------
hello_moto
The definition of hackers back in the 90's is (and should be) different than
the definition of hackers today.

------
jteo
The interesting thing is that Yahoo could have solved their problems by buying
Google for a pittance.

------
davidw
A minor stylistic nit: I wouldn't have put 'hosed' in the lead. There are many
equally valid words that convey the same meaning without such a colloquial
feel to them; in other words, in 10/20 years they won't look as out of place
as 'hosed' might.

------
dougb
Excellent Essay PG! I was at Lycos about the same time, and what was going on
there was very similar to what you describe at Yahoo. Search was considered a
commodity and out sourced to FAST. Lycos wanted to be considered a "Media
Company" too.

------
huhtenberg
> _The prices seemed cheap..._

cheap -> low

~~~
huhtenberg
Why is this down-modded?

"Cheap" is a property of having a relatively low price. Therefore it's either
low prices or cheap products, but not cheap prices.

------
startupcto
Tens years from now, will you be writing the same article with the title "what
happened to Google?". I'd say likely. Companies come and go. Just like
assuming Facebook is the THE social graph because somewhere somehow another
entrepreneur is working on that next Facebook or Google.

~~~
loewenskind
10 years? I'd say it will happen in less than half that time. Personally, I
think the cycles (like everything else) are getting faster.

------
HilbertSpace
Sorry, PG, but I believe your post is an example of "dancing 'round and 'round
and suppose while the secret sits in the middle and knows".

The most important thing is, the CEO very much needs to know nearly everything
important for his company. For a company heavily involved in software, the CEO
needs to understand software in general and the software of his company in
particular.

In a startup, he needs to be able to understand all the software, in detail,
from the 'architecture' down to line by line. So, for this he needs to have
enough knowledge of computing to understand, evaluate, and construct the
architecture and have good knowledge of all the crucial 'software tools'. So,
if the software is in C++ and Apache, then the CEO needs to understand these
two. Windows? He needs to understand some or all of .NET, the CLR, C#, Visual
Basic .NET, ADO.NET, ASP.NET, etc.

Now we come to a curious point: For the CEO to acquire that knowledge takes
more of his time than writing the code, given the knowledge. So, really, once
the CEO has learned to write the code, he can, for less than the time
investment in learning the tools, just go ahead and write the code. He should.

Since the CEO wrote the code, maybe that makes his company a 'hacker culture'?
I hope not: There are things more important than ASP.NET, etc. While knowing
ASP.NET might be necessary, it is not sufficient. Just because the CEO drives
his car does not make him a chauffeur. Instead, the software is just part of
his job.

Next, my experience is that the best software developers and, in particular,
the ones best at the most technical details of software, and the best at
software 'architecture' are not 'hackers' and are not even 'computer
scientists' but are mathematicians who took out a few afternoons to
understand, say, AVL trees, extensible hashing, Cartesian trees, minimum
spanning trees, DeRemer's LALR parsing, and monotone locking protocols but
also understand dynamic programming, linear programming on networks,
Lagrangian relaxation and non-linear duality, Poisson and Markov processes,
and martingales. Sorry 'bout that!

With that technical knowledge and work, he has to pay close attention to the
product, customers, revenue, hiring, etc.

Not so strange.

------
kahawe
PG: And without good programmers you won't get good software, no matter how
many people you put on a task, or how many procedures you establish to ensure
"quality"

IMHO truer words have never been spoken.

