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Early history (1994–1996)
In January 1994, Jerry Yang and David Filo were Electrical Engineering graduate students at Stanford University. In April 1994, "Jerry's Guide to the World Wide Web" was renamed "Yahoo!", for which the official expansion is "Yet Another Hierarchical Officious Oracle".[10] Filo and Yang said they selected the name because they liked the word's general definition, which comes from Gulliver's Travels by Jonathan Swift: "rude, unsophisticated, uncouth." Its URL was akebono.stanford.edu/yahoo.[11]
By the end of 1994, Yahoo! had already received one million hits. The Yahoo! domain was created on January 18, 1995.[12] Yang and Filo realized their website had massive business potential, and on March 1, 1995, Yahoo! was incorporated.[13] On April 5, 1995, Michael Moritz of Sequoia Capital provided Yahoo! with two rounds of venture capital, raising approximately $3 million.[14][15] On April 12, 1996, Yahoo! had its initial public offering, raising $33.8 million, by selling 2.6 million shares at $13 each.
Like many search engines and web directories, Yahoo! diversified into a Web portal. In the late 1990s, Yahoo!, MSN, Lycos, Excite and other Web portals were growing rapidly. Web portal providers rushed to acquire companies to expand their range of services, in the hope of increasing the time a user stays at the portal.
On March 8, 1997, Yahoo! acquired online communications company Four11. Four11's webmail service, Rocketmail, became Yahoo! Mail. Yahoo! also acquired ClassicGames.com and turned it into Yahoo! Games. Yahoo! then acquired direct marketing company Yoyodyne Entertainment, Inc. on October 12. On March 8, 1998, Yahoo! launched Yahoo! Pager,[16] an instant messaging service that was renamed Yahoo! Messenger a year later. On January 28, 1999, Yahoo! acquired web hosting provider GeoCities. Another company Yahoo! acquired was eGroups, which became Yahoo! Groups after the acquisition on June 28, 2000.
When acquiring companies, Yahoo! often changed the relevant terms of service. For example, they claimed intellectual property rights for content on their servers, unlike the companies they acquired. As a result, many of the acquisitions were controversial and unpopular with users of the existing services.[clarification needed]
Dot-com bubble (2000–2001)
Yahoo! stock doubled in price in the last month of 1999.[17] On January 3, 2000, at the height of the Dot-com boom, Yahoo! stocks closed at an all-time high of $118.75 a share. Sixteen days later, shares in Yahoo! Japan became the first stocks in Japanese history to trade at over ¥100,000,000, reaching a price of ¥101.4 million ($94,780 at that time).[18]
On February 7, 2000, the Yahoo! domain was brought to a halt for a few hours as it was the victim of a distributed denial of service attack (DDoS).[19] On the next day, its shares rose about $16, or 4.5 percent as the failure was blamed on hackers rather than on an internal glitch, unlike a fault with eBay earlier that year.
During the dot-com boom, the cable news station CNBC also reported that Yahoo! and eBay were discussing a 50/50 merger.[20] Although the merger never materialized the two companies decided to form a marketing/advertising alliance six years later in 2006.[21]
On June 26, 2000, Yahoo! and Google signed an agreement which retained Google as the default world-wide-web search engine for Yahoo! following a beta trial in 1999.[22]
Post dot-com bubble (2002–2008)
Yahoo! was one of the few surviving large Internet companies after the dot-com bubble burst. Nevertheless, on September 26, 2001, Yahoo! stocks closed at a five-year low of $4.06 (split-adjusted).
Yahoo! formed partnerships with telecommunications and Internet providers to create content-rich broadband services to compete with AOL. On June 3, 2002, SBC and Yahoo! launched a national co-branded dial service.[23] In July 2003, BT Openworld announced an alliance with Yahoo!.[24] On August 23, 2005, Yahoo! and Verizon launched an integrated DSL service.[25]
In late 2002, Yahoo! began to bolster its search services by acquiring other search engines. In December 2002, Yahoo! acquired Inktomi. In February 2005, Yahoo! acquired Konfabulator and rebranded it Yahoo! Widgets,[26] a desktop application and in July 2003, it acquired Overture Services, Inc. and its subsidiaries AltaVista and AlltheWeb. On February 18, 2004, Yahoo! dropped Google-powered results and returned to using its own technology to provide search results.
In 2004, in response to Google's release of Gmail, Yahoo! upgraded the storage of all free Yahoo! Mail accounts from 4 MB to 1 GB, and all Yahoo! Mail Plus accounts to 2 GB. On July 9, 2004, Yahoo! acquired e-mail provider Oddpost to add an Ajax interface to Yahoo! Mail.[27] On October 13, 2005, Yahoo! and Microsoft announced that Yahoo! Messenger and MSN Messenger would become interoperable. In 2007, Yahoo! took out the storage meters, thus allowing users unlimited storage.
Yahoo! continued acquiring companies to expand its range of services, particularly Web 2.0 services. Yahoo! Launchcast became Yahoo! Music on February 9, 2005. On March 20, 2005, Yahoo! purchased photo sharing service Flickr.[28] On March 29, 2005, the company launched its blogging and social networking service Yahoo! 360°. In June 2005, Yahoo! acquired blo.gs, a service based on RSS feed aggregation. Yahoo! then bought online social event calendar Upcoming.org on October 4, 2005. Yahoo! acquired social bookmark site del.icio.us on December 9, 2005 and then playlist sharing community webjay on January 9, 2006.
On August 27, 2007, Yahoo! released a new version of Yahoo! Mail. It adds Yahoo! Messenger integration. (which includes Windows Live Messenger due to the networks' federation) and free text messages (not necessarily free to the receiver) to mobile phones in the U.S., Canada, India and the Philippines.[29]
On January 29, 2008, Yahoo! announced that the company was laying off 1,000 employees as the company had suffered severely in its inability to effectively compete with industry search leader Google. The cuts represent 7 percent of the company's workforce of 14,300. Employees are being invited to apply for an unknown number of new positions that are expected to open as the company expands areas that promise faster growth.[30]
In February, 2008, Yahoo! acquired Cambridge, Massachusetts-based Maven Networks, a supplier of internet video players and video advertising tools, for approx. $160 million.
Yahoo! announced on November 17, 2008 that Yang would be stepping down as CEO.[31]
On 10 December 2008, Yahoo! began laying off 1,520 employees around the world as the company tries to deal with its financial difficulties. [32]
Acquisition attempt by Microsoft
Microsoft and Yahoo! pursued merger discussions in 2005, 2006, and 2007, that were all ultimately unsuccessful. At the time, analysts were skeptical about the wisdom of a business combination.[33][34]
On February 1, 2008, after its friendly takeover offer was rebuffed by Yahoo!, Microsoft made an unsolicited takeover bid to buy Yahoo! for US$44.6 billion in cash and stock.[35][36] Days later, Yahoo! considered alternatives to the merger with Microsoft, including a merger with internet giant Google[37] or a potential transaction with News Corp.[38] However, on February 11, 2008, Yahoo! decided to reject Microsoft's offer as "substantially undervaluing" Yahoo!'s brand, audience, investments, and growth prospects.[39] As of February 22, two Detroit based pension companies have sued Yahoo! and their board of directors for breaching their duty to shareholders by opposing Microsoft's takeover bid and pursuing "value destructive" third-party deals.[40][dead link
On May 3, 2008, Microsoft withdrew their offer. During a meeting between Ballmer and Yang, Microsoft had offered to raise its offer by $5 billion to $33 per share, while Yahoo! demanded $37. One of Ballmer’s lieutenants suggested that Yang would implement a poison pill to make the takeover as difficult as possible, saying "They are going to burn the furniture if we go hostile. They are going to destroy the place."[46][47]
Analysts say that Yahoo!’s shares, which closed at $28.67 on May 2, are likely to drop below $25 and perhaps as low as $20 on May 5, which would put significant pressure on Yang to engineer a turnaround of the company. Some suggest that institutional investors would file lawsuits against Yahoo!’s board of directors for not acting in shareholder interest by refusing Microsoft's offer.[48][49]
On May 5, 2008, following Microsoft's withdrawal Yahoo!’s stock plunged some 13% lower to $23.02 in Monday trading and trimmed about $6 billion off of its market capitalization.[50]
After Microsoft's failed bid to acquire Yahoo!, Microsoft is rumored to be looking at acquiring LiveDoor, a leading Japanese portal and the leading blogging service in Japan, to strengthen its position against Yahoo! Japan.
On June 12, 2008, Yahoo announced that it had ended all talks with Microsoft about purchasing either part of the business (the search advertising business) or all of the company. Talks had taken place the previous weekend (June 8), during which Microsoft allegedly told Yahoo that it was no longer interested in a purchase of the entire company at the price offered earlier -- $33/share. Also on June 12, Yahoo announced a non-exclusive search advertising alliance with Google.[51] Upon this announcement, many executives and senior employees have announced their plans to leave the company as it appears that they have lost confidence in Yahoo's strategies. According to market analysts, these pending departures are also impacting Wall Street's perception of the company. [52]
On July 7, 2008, Microsoft said it would reconsider proposing another bid for Yahoo if the company's nine directors were ousted at the annual meeting scheduled to be held on August 1, 2008. Microsoft believes it would be able to better negotiate with a new board. [53]
Billionaire investor Carl Icahn, calling the current board irrational in its approach to talks with Microsoft, launched a proxy fight to replace Yahoo's board. On July 21, 2008 Yahoo settled with Carl Icahn, agreeing to appoint him and two allies to an expanded board.
On November 30, 2008 Microsoft offered to buy Yahoo's Search business for $20 billion. [54]
Products and services
Yahoo! provides a wide array of internet services that cater to most online activities. It operates the web portal http://www.yahoo.com
Diversified services
 | The factual accuracy of this section is disputed. Please see the relevant discussion on the talk page.(May 2008) |
Yahoo! offers diversified services; it provides vertical search services such as Yahoo! Image, Yahoo! Video, Yahoo! Local, Yahoo! News, and Yahoo! Shopping Search. As of August 2007, Yahoo! is the second-most used search engine, after Google. As of December 11, 2007, Google and the Microsoft search engine "store personal information for 18 months" and Yahoo! and AOL (Time Warner) "retain search requests for 13 months".[55]
Communication
Yahoo! provides internet communication services such as Yahoo! Mail and Yahoo! Messenger, Yahoo! Mail is the largest e-mail service in the world with almost half the market share.[56] In March, 2007, Yahoo! announced that their email service will offer unlimited storage beginning May 2007.[57]
Yahoo! Mail premium service MailPlus provides additional functionality including POP/SMTP access to Yahoo! mail accounts, although such functionality is already provided for free by Yahoo! competitor Gmail. Some MailPlus subscribers have reported difficulties in successfully cancelling their Mailplus (automatically renewed and paid by credit card) subscriptions. Although other areas of the Mailplus web interface appear to function correctly, a blank page appears when users select "cancel service" from the list of options to manage the service. It is unknown whether this error has been an accidental oversight by Yahoo! programmers, or a deliberate attempt to retain Mailplus subscription cash flows as long as possible.
Yahoo! also offers social networking services and user-generated content in products such as My Web, Yahoo! Personals, Yahoo! 360°, Flickr and Yahoo! Buzz.
Yahoo! Photos was shut down on September 20, 2007 in favor of Flickr. On October 16, 2007, Yahoo! announced that they will no longer provide support or perform bug fixes on Yahoo! 360° as they intend to abandon it in early 2008 in favor of a "universal profile" that will be similar to their Mash experimental system.[58]
Content
Yahoo! partners with hundreds of premier content providers in products such as Yahoo! Sports, Yahoo! Finance, Yahoo! Music, Yahoo! Movies, Yahoo! News, Yahoo! Answers and Yahoo! Games to provide media contents and news. Yahoo! also provides a personalization service, My Yahoo!, which enables users to collect their favorite Yahoo! features, content feeds, and information into a single page.
On March 31, 2008 Yahoo! launched web portal shine.yahoo.com another Yahoo! property dedicated to women between the ages of 25 and 54. Yahoo! called this demographic underserved by current Yahoo! properties. With Shine Yahoo! will expand its offerings in parenting, sex and love, healthy living, food, career, money, entertainment, fashion, beauty home life and astrology.
Co-branded Internet services
Yahoo! has developed partnerships with different broadband providers such as AT&T (via BellSouth & SBC), Verizon Communications, Rogers Communications and British Telecom, offering a range of free and premium Yahoo! content and services to subscribers.
Mobile
Yahoo! Mobile includes services for on-the-go messaging, such as email, instant messaging, and moblogging; information, such as search and alerts; and fun and games, including ringtones, mobile games, and Yahoo! Photos for camera phones. These require software to be installed on the user's device.
oneSearch
Yahoo! introduced its Internet search system, called oneSearch, developed for mobile phones on March 20, 2007. The company's officials stated that in distinction from ordinary Web searches, Yahoo!’s new service presents a list of actual information, which may include: news headlines, images from Yahoo!’s Flickr photos site, business listings, local weather and links to other sites. Instead of showing only, for example, popular movies or some critical reviews, oneSearch lists local theaters that at the moment are playing a certain movie, user ratings and news headlines regarding the movie. A zip code or city name is required for Yahoo! oneSearch to start delivering local search results.
The results of a Web search are listed on a single page and are prioritized into categories. The list of results is based on calculations that Yahoo! computers make on certain information the user is seeking.[59]
Yahoo! has announced they also plan to adopt Novarra's mobile content transcoding service for the oneSearch platform.[60]
Commerce
Yahoo! offers commerce services such as Yahoo! Shopping, Yahoo! Autos, Yahoo! Real Estate and Yahoo! Travel, which enables users to gather relevant information and make commercial transactions and purchases online. Yahoo! Auctions were discontinued in 2007 except for Asia. [61]
Small business
Yahoo! provides services such as Yahoo! Domains, Yahoo! Web Hosting, Yahoo! Merchant Solutions, Yahoo! Business Email, and Yahoo! Store to small business owners and professionals allowing them to build their own online stores using Yahoo!’s tools.
Yahoo! also offers HotJobs to help recruiters find the talent they seek.
Advertising
Yahoo! Search Marketing provides services such as Sponsored Search, Local Advertising, and Product/Travel/Directory Submit that let different businesses advertise their products and services on the Yahoo! network. Yahoo! Publisher Network is an advertising tool for online publishers to place advertisements relevant to their content to monetize their websites.[62]
Yahoo! launched its new Internet advertisement sales system on February 5, 2007 called Panama. It allows advertisers to bid for search terms based on their popularity to display their ads on search results pages. The system takes bids, ad quality, click-through rates and other factors into consideration in determining how ads are ranked on search results pages. Through Panama, Yahoo! aims to provide more relevant search results to users, a better overall experience, as well as increase monetization -- to earn more from the ads it shows.[63]
On April 7, 2008, Yahoo! announced Yahoo! AMP!, an online advertising management platform.[64] The platform seeks to simplify advertising sales by unifying buyer and seller markets. The service is scheduled for release in quarter 3 of 2008.
Yahoo! Next
Yahoo! Next is an incubation ground for future Yahoo! technologies currently in their beta testing phase. It contains forums for Yahoo! users to give feedback to assist in the development of these future Yahoo! technologies.
Yahoo! BOSS
Yahoo! Search BOSS is a new service that allows developers to build search applications based on Yahoo!'s search technology.[65] Early Partners in the program include Hakia, Me.dium, Delver and Daylife.[66]
Revenue model
About 88% of total revenues for the fiscal year 2006 came from marketing services. The largest segment of it comes from search advertising, where advertisers bid for search terms to display their ads on the search results, on average Yahoo! makes 2.5 cents to 3 cents from each search. With the new search advertising system "Panama" Yahoo! aims to increase revenue generated from search.[67]
Other forms of advertising which bring in revenue for Yahoo! include display and contextual advertising.
Working with comScore, The New York Times found that Yahoo! is able to collect far more data about Web users than its competitors from its Web sites and its advertising network. By one measure, on average Yahoo! had the potential in December 2007 to build a profile of 2,500 records per month about each of its visitors.[68]
Criticism and controversy
Yahoo! paid inclusion controversy
In March 2004, Yahoo! launched a paid inclusion program whereby commercial websites are guaranteed listings on the Yahoo! search engine after payment.[69] This scheme is lucrative, but has proved unpopular both with website marketers (who are reluctant to pay), and the public (who are unhappy about the paid-for listings being indistinguishable from other search results).[70] As of October 2006, Paid Inclusion doesn't guarantee any commercial listing, it only helps the paid inclusion customers, by crawling their site more often and by providing some statistics on the searches that led to the page and some additional smart links (provided by customers as feeds) below the actual url.
Adware and spyware
Yahoo! has also been criticized for funding spyware and adware — advertising from Yahoo!’s clients often appears on-screen in pop-ups generated from adware that a user may have installed on their computer without realizing it by accepting online offers to download software to fix computer clocks or improve computer security, add browser enhancements, etc. The frequency of advertising pop-ups for spyware, generated from a partnership with advertising distributor Walnut Ventures, who had a direct partnership with Direct Revenue, could be increased or decreased based on Yahoo!’s immediate revenue needs, according to some former employees in Yahoo!’s sales department.[71][72]
Work in the People's Republic of China
| “ | While technologically and financially you [Yahoo] are giants, morally you are pygmies[73] | ” |
| —Tom Lantos, chairman of the House Foreign Affairs Committee (2007) | ||
Yahoo!, along with Google China, Microsoft, Cisco, AOL, Skype, Nortel and others, has cooperated with the Chinese government in implementing a system of internet censorship in mainland China.
Unlike Google or Microsoft, which keep confidential records of its users outside mainland China, Yahoo! stated that the company will not protect the privacy and confidentiality of its Chinese customers from the authorities.[74]
Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders state that it is "ironic that companies whose existence depends on freedom of information and expression have taken on the role of censor."[75]
Imprisonment of Chinese dissidents
] Shi Tao
In September 2005, Reporters Without Borders reported the following story. In April 2005, Shi Tao, a journalist working for a Chinese newspaper, was sentenced to 10 years in prison by the Changsha Intermediate People's Court of Hunan Province, China (First trial case no. 29), for "providing state secrets to foreign entities". The "secrets" were a brief list of censorship orders he sent from a Yahoo! Mail account to the Asia Democracy Forum before the anniversary of the Tiananmen Square Incident.[76]
The verdict as published by the Chinese government
In February 2006, Yahoo! General Counsel submitted a statement to the U.S. Congress in which Yahoo! denied knowing the true nature of the case against Shi Tao.[77] In April 2006, Yahoo! Holdings (Hong Kong) was investigated by Hong Kong's Privacy Commissioner for Personal Data.
On 2 June 2006, the union representing journalists in the UK and Ireland (NUJ) called on its 40,000 members to boycott all Yahoo! Inc. products and services to protest the Internet company's reported actions in China.[78]
In July 2007, evidence surfaced detailing the warrant which the Chinese authorities sent to Yahoo! officials, highlighting "State Secrets" as the charge against Shi Tao. The warrant requests "Email account registration information for huoyan1989@yahoo.com.cn, all login times, corresponding IP addresses, and relevant email content from February 22, 2004 to present."[79][80][81] Analyst reports and human rights organizations have said that this evidence directly contradicts Yahoo!’s testimony before the U.S. Congress in February 2006.[82]
Yahoo! contends it must respect the laws of governments in jurisdictions where it is operating.
| “ | It's complicated.[73] | ” |
| —Michael Callaham, General Counsel, Yahoo!, testifying before the House Foreign Affairs Committee (2007)[83] | ||
Li Zhi
Criticism of Yahoo! intensified in February 2006 when Reporters Without Borders released Chinese court documents stating that Yahoo! aided Chinese authorities in the case of dissident Li Zhi. In December 2003 Li Zhi was sentenced to 8 years imprisonment for "inciting subversion".
Sued in US court for outing Chinese dissident Wang Xiaoning
Wang Xiaoning is a Chinese dissident from Shenyang who was arrested by authorities of the People's Republic of China for publishing controversial material online.
In 2000 and 2001, Wang, who was an engineer by profession, posted electronic journals in a Yahoo! group calling for democratic reform and an end to single-party rule. He was arrested in September 2002 after Yahoo! assisted Chinese authorities by providing information. In September 2003, Wang was convicted of charges of "incitement to subvert state power" and sentenced to ten years in prison.[84]
On April 18, 2007, Xiaoning's wife Yu Ling sued Yahoo! under human rights laws in federal court in San Francisco, California, United States.[85] Wang Xiaoning is named as a plaintiff in the Yahoo! suit, which was filed with help from the World Organization for Human Rights USA. "Yahoo! is guilty of 'an act of corporate irresponsibility,' said Morton Sklar, executive director of the group. "Yahoo! had reason to know that if they provided China with identification information that those individuals would be arrested."[86]
Yahoo!’s decision to assist China's authoritarian government came as part of a policy of reconciling its services with the Chinese government's policies. This came after China blocked Yahoo! services for a time. As reported in The Washington Post and many media sources:
- The suit says that in 2001, Wang was using a Yahoo! e-mail account to post anonymous writings to an Internet mailing list. The suit alleges that Yahoo!, under pressure from the Chinese government, blocked that account. Wang set up a new account via Yahoo! and began sending material again; the suit alleges that Yahoo! gave the government information that allowed it to identify and arrest Wang in September 2002. The suit says prosecutors in the Chinese courts cited Yahoo!’s cooperation.[86]
Human rights organizations groups are basing their case on a 217-year-old U.S. law to punish corporations for human rights violations abroad, an effort the Bush administration has opposed:
- In recent years, activists working with overseas plaintiffs have sued roughly two dozen businesses under the Alien Tort Claims Act, which the activists say grants jurisdiction to American courts over acts abroad that violate international norms. Written by the Founding Fathers in 1789 for a different purpose, the law was rarely invoked until the 1980s.[86]
On August 28, 2007, the World Organization for Human Rights sued Yahoo! for allegedly passing information (email and IP address) with the Chinese government that caused the arrests of writers and dissidents. The suit was filed in San Francisco for journalists, Shi Tao, and Wang Xiaoning. Yahoo! stated that it supported privacy and free expression for it worked with other technology companies to solve human rights concerns.[87]
On November 6, 2007, the US congressional panel criticised Yahoo! for not giving full details to the House Foreign Affairs Committee the previous year, stating it had been "at best inexcusably negligent" and at worst "deceptive".[88]
Chatrooms and message boards
As a result of media scrutiny relating to Internet child predators and a lack of significant ad revenues, Yahoo!’s "user created" chatrooms were closed down in June 2005.[89] Yahoo! News' message board section was closed December 19, 2006, due to the trolling phenomenon.[90]
]Image search
On May 25, 2006, Yahoo!’s image search was criticized for bringing up sexually explicit images even when SafeSearch was on. This was discovered by a teacher who was intending to use the service with a class to search for "www". Yahoo!'s response to this was, "Yahoo! is aware of this issue and is working to resolve it as quickly as possible".[91]
Shark finning controversy
Yahoo! is a 40% owner of Alibaba, which facilitates the sale of shark-derived products.[92] After investing in Alibaba, Yahoo! executives were asked about this issue, and responded: "We know the sale of shark products is both legal in Asia and a centuries-old tradition. This issue is largely a cultural-practices one."[93] However, the "cultural" claim (which is pushed by the trade)[94] has been contested.[95]
Financial data
| Year | 2003 | 2004 | 2005 | 2006 | 2007 |
|---|---|---|---|---|---|
| Sales | 1 625 | 3 574 | 5 258 | 6 426 | 6 969 |
| EBITDA | 453 | 1 000 | 1 505 | 1 066 | |
| Net Results | 238 | 840 | 1 896 | 751 | 660 |
| Staff | 5 500 | 7 600 | 9 800 | 11 400 |
Yahoo! International
 | It has been suggested that Yahoo!Xtra be merged into this article or section. (Discuss) |
Yahoo! is known across the world with its multi-lingual interface. The site is available in over 20 languages, including English. The official directory for all of the Yahoo! International sites is world.yahoo.com.
Each of the international sites are wholly-owned by Yahoo!, with the exception of Yahoo! Japan1, in which it holds a 33% minority stake. Historically, Yahoo! entered into joint venture agreements with Softbank for the major European sites2 (UK, France, Germany) and well as Korea and Japan. In November 2005, Yahoo! purchased the minority interests that Softbank owned in Europe and Korea.
Yahoo! logo
Yahoo! logos come in many different colors and shapes.[97] The first logo was used when the company was founded in 1995; it was red, and it had three icons on each side of it. Even though the official logo is purple,[98] the logo used on the main page yahoo.com is red with a black outline and shadow. Sometimes the logo is abbreviated with Y!.[97]
