
The Glory That Was Yahoo - ohjeez
https://www.fastcompany.com/40544277/the-glory-that-was-yahoo
======
russellbeattie
IT's amazing that something so simple as a not having a clear vision/mission
could take down a successful company but that's the essentially what happened
at Yahoo! When I worked there in 2004 it was just confused, chasing
competitors and ideas, never deciding on what it wanted to be when it grew up.
I left a year or so later and from what I saw it never figured itself out.

I always wanted the company to focus on a mission about being "useful" \- like
the digital WD-40/duck tape of your life. Finance, news, fantasy-sports,
email, messenger, groups, My Yahoo!, Delicious, Flickr... They're all
_useful_. They could have continued to happily and profitably offer all of
these services - and expanded to dozens more - under the mantra of being
useful to our every day lives, but Yahoo! was never content with that. They
wanted to be eBay, or Google, or Facebook, or YouTube or whoever else was a
big player at the time, instead of focusing on the customer loyalty they had
already generated.

Having that clear core vision/mission seems like a small thing, but not having
one crippled Yahoo! and caused infighting, turnover and confusion that
eventually killed it. (Oh, and also Mayer was an idiot.)

~~~
paulryanrogers
Google seems to be falling into a similar pattern with it's many different
attempts at chat apps

~~~
stevenwoo
Google's income stream from advertising is not as vulnerable as Yahoo's home
page for the internet model as far as I know.

~~~
maxxxxx
They still haven't demonstrated that they can make significant money on
anything other than advertising. They do a lot of stuff but nothing really
turns into a profitable business. Compare that to Microsoft who have shown
over decades many times an ability to get into new lines of business
profitably.

~~~
kyrra
[https://www.sec.gov/Archives/edgar/data/1652044/000165204418...](https://www.sec.gov/Archives/edgar/data/1652044/000165204418000007/goog10-kq42017.htm)

Take a look at Google's earnings. in 2017 Google made $95 billion from ads,
and $14.2 billion from "other revenue". Which is classified as:

Other Revenue: Apps, in-app purchases, and digital content in the Google Play
store; Google Cloud offerings; and Hardware.

So Google is making money from other places, just not near as much as Ads yet.

~~~
cambalache
Around 13% of total revenue then, growing year on year, that's nice. I would
like to know what percentage of net profit is contributed by that fraction.

~~~
adventured
The other category is producing an operating loss.

Just as a stray example, for 3Q17 Alphabet generated $7.8 billion in operating
income.

Google, the subsidiary, generated $8.7 billion in operating income for that
quarter.

With continued solid growth of Google's cloud business, and the pull back on
burning red ink on Google Fiber, maybe they'll push that other category to
break-even soon. Regardless, Google is generating all of their profit. Google
is a cash production marvel, nearly on par with the iPhone at this point. They
should be able to hit around $40 billion in operating income in that
subsidiary this year.

~~~
jacksmith21006
You are confusing Alphabet other with Google other. Google other is material
and their fastest growing segment.

------
smacktoward
_> “We didn’t want to call it a portal, because a portal is a door to
somewhere else, and we wanted people to stay there,” says Shannon Brayton, a
senior manager in Yahoo’s corporate communications department from 1998 to
2001._

Of course the company that eventually killed them, Google, found its earliest
success by explicitly rejecting this ethos. Google was a search engine, they
didn't care if it sent you away; they _wanted_ it to send you away, because
that meant it was _working._ It meant you had found what you were looking for.
A search engine's entire _job_ is to send you away.

But then came AdWords and the IPO, both of which applied pressure on Google to
become something else, something other than a search engine. Something that
herded eyeballs together, rather than pushing them out. Something that
eventually became what Google ironically is today: a better Yahoo than Yahoo
ever was.

~~~
commandlinefan
> Google was a search engine, they didn't care if it sent you away; they
> wanted it to send you away

... only seems obvious in hindsight, though. I worked for a string of internet
companies in the late 90's back when people were still trying to figure out
what an internet company was supposed to be. The biggest task that they
consistently put on me, the tech guy who actually understood what "internet"
meant, was making sure that users didn't use too much of the company's
internet, because internet was expensive. When I first heard of MySpace, I was
floored - they're just letting people upload stuff to their servers? Like...
whatever they want? As often as they want? They don't charge each individual
user by the individual byte? This was heresy! (And then I checked to see if
they were hiring...)

~~~
rasen58
So how was MySpace able to do that back then? Did they just have a lot of
funding that they were able to use to give away all that free space?

------
rm999
I'm surprised that AOL isn't really discussed in this article. I always
assumed Yahoo's ethos, as the one-stop shop on the internet ("We didn’t want
to call it a portal, because a portal is a door to somewhere else, and we
wanted people to stay there") came straight out of AOL's playbook. What I know
for sure is that I, and a lot of other people, immediately felt comfortable
with Yahoo when we first started using the internet because we were so used to
AOL's vision of how you connect "online".

I think the connection run strong - I'd go as far as saying that Yahoo and AOL
failed for the same reason. To survive at their inflated valuations they had
to be everything to everyone, which stretched their vision thin. Meanwhile, it
was always impossible to do everything, so smaller, more agile players came in
and etched away at their business models.

~~~
jhayward
> To survive at their inflated valuations they had to be everything to
> everyone, which stretched their vision thin

Your comment is spot on.

It also handcuffed them to their established business model(s) and
"properties", because they couldn't afford to take a revenue hit or self-
cannibalize to transition to the next S-curve eating the world. Given that,
demise is inevitable.

------
onli
The Google search comparisons in the article are strange. Google did not win
the search engine war because it had integrated ads, I think it won because
the search results were so much better. There might be some indirect
connection - less revenue because of a different advertising model, leading to
less investment - but I rather think this was just about the technology not
being there. Which is maybe not that surprising when coming from curated links
and suddenly fighting, well, Google.

~~~
cpeterso
IIRC, Google was one of the first search engines to AND your search terms by
default, returning relevant pages from long tail sites. Other search engines
at the time would OR your search terms, returning irrelevant pages from
popular sites. I think this simple difference in defaults had almost as big an
impact as Google's PageRank/BackRub algorithm.

~~~
dpark
Every search engine of Yahoo's era supported ANDing terms. It didn't help. The
result you wanted was still swimming beneath 7 pages of trash. Commonly it
wasn't even in the results because the AND was too restrictive.

Backrub is what made Google so much better. Google also really focused on
search and made numerous improvements, but the linchpin was backrub.

~~~
eli
It was also ludicrously fast at returning results compared to everyone else at
the time. I was shocked at the time that a dynamically generated page could
return so quickly.

I still to this day miss Altavista's advanced operators though

~~~
bigger_cheese
Yes google was so much better than all those other sites it was like night and
day.

I was in high school at the time in the 90's. Where I lived the internet
wasn't very widespread only place I could access it was via dial up in our
school library I remember trying to do school projects having to go through
the search engine dance you'd start by searching yahoo, then infoseek, then
lycos, then altavista one by one slogging through pages of useless results
trying to find what you were looking for.

I was in 8th or 9th grade we were given an assignment to write a report about
the "G8 forum" none of the search engines I used at the time were capable of
returning meaningful results for all the possible combinations of "G8", "G+8",
"G and 8", "Group of 8", "G AND 8 AND Summit OR Forum" I could think of. I'd
just get pages and pages of nonsense compounded by the fact my school's dial
up was so slow - a 33 kb modem I think it was an exercise in frustration.

I complained to my parents about it over dinner and my Dad said 'oh you should
try google.com' First time I'd ever heard about google, the next day at school
I tried a google search and got meaningful results on the very first page. I
don't think I ever used Yahoo or any of those other sites again after that.

~~~
dpark
That was pretty much my experience as well, though I was in college. Someone
pointed me at Google when I was struggling to find something and it was just
clearly so much better that I basically just never used Yahoo again.

------
rossdavidh
From Paul Graham, inside view:
[http://paulgraham.com/yahoo.html](http://paulgraham.com/yahoo.html) "What
went wrong? The problems that hosed Yahoo go back a long time, practically to
the beginning of the company. They were already very visible when I got there
in 1998. Yahoo had two problems Google didn't: easy money, and ambivalence
about being a technology company."

~~~
lucas_membrane
>> easy money

Some time around 1995-6, yahoo reported earnings $0.05/share above
expectations after the markets closed, and the stock shot up more than $200.00
in after-hours trading. Can any company survive that?

------
jtth
What glory? All these points were acquisitions. Everything this article
celebrates were destroyed by Yahoo. The only thing they ever did well was
build a portal.

~~~
BlueAThrow
I worked for AOL, who Verizon recently merged with Yahoo . It was inevitable
they destroyed the startups . Yahoo processes made us look lean in comparison,
and we were another old web 1.0 company . The first thing they make you do is
port to their tech stack and so much time is spent on that process and
approvals from central teams that it's a wonder anything gets done . They've
got their own package manager, own internal ec2 clone, own build system, own
Linux distro, own deploy system, and if any of those things were good it might
make sense, but they're mid-2000s tech in quality .

Flickr disappeared for a crucial year post merger, and apparently they were
porting to Yahoo's internal account system: [https://gizmodo.com/5910223/how-
yahoo-killed-flickr-and-lost...](https://gizmodo.com/5910223/how-yahoo-killed-
flickr-and-lost-the-internet) . At least that produced some user facing
unification compared to some of the tasks we had . The attitude has not
improved since .

~~~
henrikschroder
> but they're mid-2000s tech in quality .

This was the most disappointing part of being acquired. It was quite a wake-up
call to realize that the culture inside Yahoo actually believed that their
tech stack was good and competitive and that they were as innovative as
Google/Facebook/Microsoft/Amazon.

Nope. Yahoo obviously had a bunch of really clever people working there up
until the year 2000, and they had to build a lot of things that didn't exist
back then, because they were the first internet behemoth. But then all of
those really clever people quit, and the company was left trying to steward
the existing systems, while not having enough brainpower to create successor
systems. So they were stuck, and a myopic "we're hot shit!" culture developed.

Meanwhile, the rest of the world went on, and "Yahoo scale" just aren't very
impressive numbers anymore, and their 2000's tech stacks are just horribly
overly complex solutions.

------
irrational
I remember back in 1995 getting on Yahoo one day and going through every
single category and clicking every website link in the entire directory (I was
in college and bored). I like to tell my kids that at one point it was
possible to visit every singe website on the WWW ;-)

~~~
deckard1
There was a brief period of time where visiting a link felt like a new
adventure. We take the simplicity of a "link" for granted today, probably
because most links are just clickbait now.

Eventually links turned into time-consuming traps of "under construction"
animations and icons and popup advertising hell. But even then, the Internet
truly felt like the wild west.

~~~
ahtu123
I miss the diversity in web design back in the day. From blinking, colorful
and seizure-inducing to very dark pages with little torch gifs. Weirdly enough
every website now looks the same (ok maybe we have 3 archetypes of web design)
even though the number of sites has grown exponentially for decades.

------
prostoalex
> Yahoo Briefcase, for instance, did cloud storage long before the likes of
> Dropbox, Box, and Google Drive.

Ha. Yahoo! had an internal idea portal and a review team. Expanding Y!
Briefcase storage was the first thing I submitted to that portal upon joining
the company in 2005 (I am sure I wasn't the first to think of it, but there
was no way to see previously submitted stuff).

The response from the ideas counsel was that Briefcase at the time was
primarily used to illegally share music/video, and expanding personal storage
would only exacerbate bad behavior. It would be in company's interest to
sunset the service, not expand it.

~~~
mooreds
Has there ever been a time where a lawyer helped promote a new product idea?
Seems like they are in the business of saying (kinda like accountants). This
is a useful protective function, but can definitely cause stasis. Not sure how
to balance it.

~~~
tjalfi
Two of the four founders of Intellectual Ventures were attorneys[0].

[0]
[https://en.wikipedia.org/wiki/Intellectual_Ventures](https://en.wikipedia.org/wiki/Intellectual_Ventures)

------
JAFTEM
GeoCities in the early 2000's is where I first created and built something
with a computer and the Internet and the experience started the journey
towards becoming a software developer. I still remember using a hit counter to
track how many people visited my cartoon fan-site (I was 10, 11 years old) and
getting excited over 20 visitors.

------
whoisjuan
Wow. I didn't know about Yahoo! Music. That was definitely a service ahead of
its time. I can see why it failed in the early 2000s (less trust in internet
transactions, slower bandwidth) but it's basically the same service that
Spotify, Apple Music, Amazon Music, Pandora, etc, offer nowadays.

~~~
fny
IMO, Yahoo music failed because you couldn't take it with you anywhere and
because the music industry wasn't ready to part with their $10+ per album
mindset.

Did I love that service...

~~~
akhilcacharya
You could for a fee - you could transfer songs to an MP3 player with the
appropriate DRM.

------
empath75
Yahoo was great for like the 2 years between when the web started becoming
useful and when google figured out search.

They never figured out what they were after the hand edited index of the
internet stopped being its reason to exist.

------
oldoverholt
I still think the ideal search experience was the era when Yahoo! would search
the Yahoo! Directory by default, and allowed you to switch over to "Web"
results that were actually Google search results. It was a cool way to have a
default search for "official" or more curated content in Directory (reminds me
a little of DuckDuckGo marking a result as "Official Site"), and the option to
search web content at large too for more specific or obscure stuff. RIP Yahoo!
Directory.

------
overcast
Only thing I ever found useful(and still do) is Yahoo Finance.

~~~
azinman2
Guessing you’re young / missed the beginning of the net, because that’s when
yahoo was king.

~~~
code_duck
Even back in the day, I preferred Altavista. I have never perceived yahoo or
any of their products as good, or used any regularly, other than a few that
were acquired like Flickr.

~~~
bluGill
yahoo was before Altavista. When they started a table of contents of the web
it was great - back when the web was small enough that you could make a table
of contents (at the time gopher was bigger than the web and growing faster,
and gopher was mostly accessed via the table of contents). When Altavista came
yahoo's index was better because instead of having to figure out the right
search terms you could navigate a logical table of contents quickly. Then the
web exploded (gopher was already all but dead) and it wasn't possible for
yahoo to keep up, at which point search became the only hope.

If Altavista hadn't quit updating their index for several months, they could
have killed google just by keeping their index up to date and continuously
refining their search algorithm. Of course this last is speculation but it is
reasonable, google wasn't that much better.

~~~
ksangeelee
When I first saw Google I'd been using AltaVista almost exclusively because it
allowed phrase searching and keyword exclusion. Google seemed primitive by
comparison.

However, it was light and fast at a time when most of my access was via 64k
lines or dial-up. AltaVista had become increasingly cluttered with GIF
advertising and 'portal' nonsense.

AltaVista became slow and cumbersome, while Google was fast and clean. For me,
that was AltaVista's downfall.

~~~
cmrdporcupine
Yes, this. While I appreciated Google's relevancy for search it didn't blow me
away that much -- the real special sauce that early-Google had was the
extremely lightweight search page. At a time when Altavista, lycos, Yahoo,
etc. were just piling on goop after goop onto their landing pages, Google did
a really smart thing and disrupted the whole space with its very minimal
style. Not even sure how deliberate that was, but it was a huge advantage.

~~~
ksangeelee
I think it was deliberate, because when they did include advertising in search
results, they innovated with text-only ads (and on an unobtrusive part of the
page).

I recall that I grew to appreciate these ads - they were often relevant to
what I was doing at that point in time. Much more civilised than the garish
GIFs that were the norm at that time.

------
tabtab
Great quote from Paul Graham on Yahoo's demise: _Hacker culture often seems
kind of irresponsible. That 's why people proposing to destroy it [replacing
it with "suit" culture] use phrases like "adult supervision." That was the
phrase they used at Yahoo. But there are worse things than seeming
irresponsible. Losing, for example._

------
m0ngr31
Couple of comments about Yahoo being dead or killed off... Yahoo is still
around doing the exact same things it's been doing.

It hasn't even changed it's name. Technically it's bigger now that it's merged
with AOL.

------
api
Yahoo died because it forgot it was a technology company and stopped
innovating. I've also heard that it developed an internal culture dominated by
non-technical sales types who didn't understand how to manage their
acquisitions or run a technology business and who de-valued those parts of the
business. Didn't take long for them to get left in the dust by more innovative
rivals.

------
velodrome
Yahoo could not decide whether it was a technology company or media company...

~~~
StevePerkins
The same could be said for most current tech titans. Some are just at
different points along their lifecycle than others.

~~~
cmrdporcupine
Well, really, Google deliberately kept out of content provision for years in a
way that Yahoo didn't. Google was only interested in being the gateway or the
platform, not the publisher. That seems to have worked for them.

------
pg_bot
Yahoo was poorly managed for its entire existence. They tried to do everything
and ended up doing nothing well. The products that they were best known for
search, email, finance, sports all stagnated for years while their attention
shifted towards the newest shiniest thing.

They never seemed to ask the question, "Why do people use Yahoo in the first
place?".

------
netc
Once I went to Stanford to attend Donald Knuth's Annual Christmas Lecture.
During the talk he wanted to show some search query on google. What he did
next was interesting. He typed yahoo.com in a browser's address bar and then
searched for google on yahoo's search to reach to google!!

~~~
stevenwoo
That had to have been a joke - that's a common old person meme in IT.

~~~
darrenf
Definitely not a joke. Well, perhaps that specific instance is, but at Yahoo!
many of the most common search terms were domains; one argument had internally
for not putting cursor focus in the search bar was precisely because people
just used it as if it were the address bar, and the appetite to support that
use case was low. (Source: ex-Yahoo! staff, albeit not in search and with a
fallible memory).

------
reaperducer
While Yahoo! is mostly a memory in the U.S., it lives on (or at least its
brand does) very strongly in Japan. You see Yahoo! Japan logos everywhere in
big cities.

Yahoo! Auctions is just about the only game there, sending fleaBay to the
woodshed.

~~~
wyclif
Also in the Philippines! I can't begin to tell you how many Filipinos I know
who, to this very day, have @yahoo.com email accounts and still use Yahoo!
Messenger.

------
darrenf
I think my biggest takeaway from this article is how few names I recognise in
it, apart from all the CEOs, despite working for Yahoo! from 1999 to 2011.
Mind you, in Europe I rarely felt particularly connected to what was going in
in Sunnyvale. Still proud to have worked on the official FIFA world cup
website, among other things.

The Google misstep (as it was considered by many) hurt for a while. The high
traffic mailing list for unmoderated developer chat eventually begat a "what
would Google do?" offshoot because Gmail this, search that, page rank the
other were dominating too many threads.

------
strictnein
It's almost exactly 10 years since Yahoo rejected Microsoft's acquisition
offer. Even at the time it was pretty clear they should have accepted it, but
it seems like Yang was too proud.

Microsoft offered $45 Billion(!) for Yahoo.

[https://www.thestreet.com/story/13655197/1/what-would-
have-h...](https://www.thestreet.com/story/13655197/1/what-would-have-
happened-if-microsoft-had-bought-yahoo-in-2008.html)

~~~
phonon
Altaba (Yahoo!'s Alibaba assets) is worth $68 Billion[1], so no, they probably
did the right thing.

[1][https://finance.yahoo.com/quote/AABA/](https://finance.yahoo.com/quote/AABA/)

~~~
strictnein
I mean, we're comparing 2008 money to 2018. If you put $45 billion in the
stock market in 2008 when this offer was rejected it'd be worth ~$90 billion
now.

If they were given MS stock as part of the deal, that $45 billion would be
worth around $130 billion.

So, still probably a bad idea to reject the offer.

------
thinkingemote
Yahoo Labs was innovative and inspiring. They seemed to make stuff that was
useful, wasn't killed immediately and had an independent life. I don't think
today's tech behemoths can approach where they were. Maybe it was just the
frontier back then...

------
esfandia
With every re-design, their services get worse. Yahoo Sports used to have easy
access to boxscores and game recaps. My Yahoo's RSS content fetching has been
broken for a while. Problem is, there are no real alternatives either.

------
georgehm
no mention of Yahoo Pipes?

~~~
onli
No, but the mainstream impact of that nice site was probably just too low.

------
ggm
Partner was glued to yahoo as a landing page for years. I never understood
why, suspect it was the familiarity of it.

------
Animats
The article doesn't even mention the whole Yahoo-Alibaba fiasco.

------
dalbasal
A huge part of what yahoo were _was_ the dotcom bubble. They're like a
personification (firmification?).

People could see the internet was a big deal. People could see that
oligopolies would be important. They assumed early movers would own the
market. Investors and startups were right about a lot of things, but it was
enough to be wrong about one or two things... Yahoo did better than most.

No one knew how long it would take for the internet to "get there," and the
implications for early movers. In retrospect, I think this was knowable, but
everyone made this mistake.

More importantly, no one knew what businesses would be valuable online.

Servers would become amazon's main moneymaker. They _achieved_ (along with
others) the goal of becoming a retailer on a scale not yet seen then, but
servers are a better business. Go figure.

Search, holiday rentals & distinct categories of social networking became
monopolies, and great businesses. The Encyclopedia became better than anyone
imagined, but not a business. Retail margins never improved. Free online video
never became a business. Online news is barely a business. Email is not a
business. ebay would stay exactly the same. Go figure.

Stress on the news point. News was the centrepiece business of almost any
other media sector, print, tv, radio, teletex... online, it's a dud.

All this stuff had to be figured out.

Yahoo started from logical premises. You couldn't find anything online, so
they made a directory. There wasn't much online, so they published stuff for
people to read. They surveyed the two, saw more potential in the latter. Huge
mistake.

It just wasn't obvious at the time. The better the directory/search got, the
less time people spent there. People spent time looking at news and stocks and
stuff. ...That's where the ad money will be, like TV. It was not ilogical, it
was just not true.

Who knew that search advertising would be a $100bn blue chip business and
"content advertising" would be mostly penis enlargment and diet tricks? Surely
yahoo finance would be a premium ad seller? no? really? search & facebook, the
online tabloid?

A lot of stuff still doesn't make sense. Youtube. Why isn't youtube a serious
business? People watch 1bn hours of youtube per day! TV ads are a thing. A big
deal, in fact. They don't pay anything for content. Google already has a
massive ad business. For the life of me... youtube should be as bigger
business than facebook.. certainly bigger than netflix.

Incidentally, almost every news site tries to force/trick me into watching
videos (not even always ads). ...hints at how bad a business news is, that
they want a sliver of what youtube have so desperately.

TLDR: Yahoo had to guess a lot of future, and place bets. It turned out that
these bets could be placed 5-10 years later, with much better chances of being
right and without missing out on much. Hard gig Yahoo.

------
heedlessly2
good job jerry yang

