Yahoo! - History and Growth

History and Growth

In January 1994, Yang and Filo were electrical engineering graduate students at Stanford University when they created a website named "Jerry's guide to the world wide web". David and Jerry's Guide to the World Wide Web was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In March 1994, "David and Jerry's Guide to the World Wide Web" was renamed "Yahoo!" The "yahoo.com" domain was created on January 18, 1995.

The word "yahoo" is an acronym for "Yet Another Hierarchical Officious Oracle" The term "hierarchical" described how the Yahoo database was arranged in layers of subcategories. The term "oracle" was intended to mean "source of truth and wisdom," and the term "officious," rather than being related to the word's normal meaning, described the many office workers who would use the Yahoo database while surfing from work. However, Filo and Yang insist they mainly selected the name because they liked the slang definition of a "yahoo" (used by college students in David Filo's native Louisiana in the late 1980s and early 1990s to refer to an unsophisticated, rural Southerner): "rude, unsophisticated, uncouth." Filo's college girlfriend often referred to Filo as a "yahoo." This meaning derives from the name of a race of fictional beings from Gulliver's Travels.

Yahoo grew rapidly throughout the 1990s. Like many search engines and web directories, Yahoo added a web portal. It also made many high-profile acquisitions. Its stock price skyrocketed during the dot-com bubble, Yahoo stocks closing at an all-time high of $118.75 a share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $4.05 on September 26, 2001.

In 2000, Yahoo began using Google for search. Over the next four years, it developed its own search technologies, which it began using in 2004. Yahoo revamped its mail service to compete with Google's Gmail in 2007. The company struggled through 2008, with several large layoffs.

In February 2008, Microsoft Corporation made an unsolicited bid to acquire Yahoo for USD $44.6 billion. Yahoo formally rejected the bid, claiming that it "substantially undervalues" the company and was not in the interest of its shareholders. Three years later, Yahoo had a market capitalization of USD $22.24 billion. Carol Bartz replaced Yang as CEO in January 2009. In September 2011, she was removed from her position at Yahoo by the company's chairman Roy Bostock, and CFO Tim Morse was named as Interim CEO of the company.

In early 2012, after the appointment of Scott Thompson as CEO, rumors spread about looming layoffs. Several key executives, such as Chief Product Officer Blake Irving left. On April 4, 2012, Yahoo announced a cut of 2,000 jobs or about 14 percent of its 14,100 workers. The cut is expected to save around $375 million annually after the layoffs are completed at end of 2012. In an email sent to employees in April 2012, Thompson reiterated his view that customers should come first at Yahoo. He also completely reorganized the company.

On May 13, 2012, Yahoo issued a press release stating that Thompson was no longer with the company, and would immediately be replaced on an interim basis by Ross Levinsohn, recently appointed head of Yahoo's new Media group. Thompson's total compensation for his 130-day tenure with Yahoo was at least $7.3 million.

In June 2012, Yahoo hired former Google director, Michael Barrett as its Chief Revenue Officer.