Everything about Yahoo totally explained
Yahoo! Inc. is an
American public corporation incorporated and headquartered in
Sunnyvale,
California, in
Silicon Valley and a global Internet services company. It provides a range of products and services including a
Web portal, a
search engine, the
Yahoo! Directory,
Yahoo! Mail, news, and posting. It was founded by
Stanford University graduate students
Jerry Yang and
David Filo in January of 1994 and incorporated on
March 1,
1995.
According to Web traffic analysis companies (including
Compete.com,
comScore,
Alexa Internet, and
Nielsen Ratings), the domain
yahoo.com attracted at least 1.575 billion visitors annually by 2008 according to a
Compete.com study. The global network of Yahoo! websites receives 3.4 billion page views per day on average
as of October 2007. It is the second most visited website in the
U.S. On
May 3,
2008, Microsoft withdrew its offer.
History and growth
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!". 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." However, a swimming coach of the senior producer of Yahoo said it was because the senior producer ran around the pool screaming "YAHOO!" Its
URL was akebono.stanford.edu/yahoo.
By the end of 1994, Yahoo had already received one million hits. Yang and Filo realized their website had massive business potential, and on
1 March 1995, Yahoo was
incorporated. On April 5, 1995,
Sequoia Capital provided Yahoo with two rounds of venture capital. On
12 April 1996, Yahoo had its
initial public offering, raising $33.8 million dollars, by selling 2.6 million shares at $13 each.
"Yahoo" had already been trademarked for barbecue sauce (and knives (by
EBSCO Industries)). Therefore, in order to get the trademark, Yang and Filo added the exclamation mark to the name.
Growth (1997-1999)
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
8 March 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
12 October. On
8 March 1998, Yahoo launched Yahoo Pager, an instant messaging service that was renamed
Yahoo Messenger a year later. On
28 January 1999, Yahoo acquired web hosting provider
GeoCities. Another company Yahoo acquired was
eGroups, which became
Yahoo Groups after the acquisition on
28 June 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.
Dot-com bubble (2000-2001)
On
January 3,
2000, at the height of the
Dot-com boom, Yahoo stocks closed at an all-time high of $475.00 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 ($962,140 at that time).
On
February 7,
2000, yahoo.com was brought to a halt for a few hours as it was the victim of a distributed denial of service attack (
DDoS). 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. Although the merger never materialized the two companies decided to form a marketing/advertising alliance six years later in 2006.
On
June 26,
2000, Yahoo and
Google signed an agreement which retained Google as the default world-wide-web search engine for yahoo.com following a beta trial in 1999.
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. In
July 2003,
BT Openworld announced an alliance with Yahoo. On
August 23,
2005, Yahoo and
Verizon launched an integrated
DSL service.
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, 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
9 July 2004, Yahoo acquired e-mail provider
Oddpost to add an
Ajax interface to
Yahoo Mail. On
13 October 2005, Yahoo and Microsoft announced that
Yahoo Messenger and
MSN Messenger would become interoperable. In 2007, Yahoo took out the storage meters and made the storage limit unlimited.
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. 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 that makes it possible for users to send instant messages to the largest combined instant messaging (IM) community including users of Yahoo Messenger and Windows Live Messenger, to send free text messages to mobile phones in the
U.S.,
Canada,
India and the
Philippines.
On
January 22,
2008, it was reported that Yahoo was planning to lay off hundreds of employees out of its work force of about 14,000. The company has suffered severely in its inability to effectively compete with industry search leader
Google.
On
January 29,
2008, Yahoo announced that the company was laying off 1,000 employees. 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.
Failed 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.
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 dollars in cash and stock. Days later, Yahoo considered alternatives to the merger with Microsoft, including a merger with internet giant
Google or a potential transaction with
News Corp. However, on February 11, 2008, Yahoo decided to reject Microsoft's offer as "substantially undervaluing" Yahoo's brand, audience, investments, and growth prospects. In early March, Google CEO
Eric Schmidt went on record saying that he was concerned that a potential Microsoft-Yahoo merger might hurt the Internet by compromising its openness. The value of Microsoft's cash and stock offer declined with Microsoft's stock price, falling to $42.2 billion by
April 4. On
April 5, Microsoft CEO
Steve Ballmer sent a letter to Yahoo's board of directors stating that if within three weeks they hadn't accepted the deal, Microsoft would approach shareholders directly in hopes of a electing a new board and moving forward with merger talks. In response, Yahoo! stated on
April 7 that they were not against a merger, but that they wanted a better offer. In addition, they stated that Microsoft's "aggressive" approach was worsening their relationship and the chances of a "friendly" merger. Later the same day, Yahoo stated that the original $45 billion offer wasn't acceptable.
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."
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.
On
May 5,
2008, Microsoft's withdrawal sent Yahoo's stock spiraling 13% lower to $23.02 in Monday trading and trimmed about $6 billion off of its market capitalization.
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.
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 which provides contents including the latest news, Yahoo Finance gives users quick access to other Yahoo services like
Yahoo! Mail, Yahoo! Maps,
Yahoo! Groups and
Yahoo! Messenger. The majority of the product offerings are available globally in more than 20 languages.
Diversified services
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".
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. In March, 2007, Yahoo announced that their email service will offer unlimited storage beginning May 2007.
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
20 September 2007 in favor of Flickr. On
16 October 2007, Yahoo announced that that'll 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.
Content
Yahoo partners with hundreds of premier content providers in products such as
Yahoo! Sports,
Yahoo! Finance,
Yahoo! Music,
Yahoo! Movies,
Yahoo! News, 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.
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.
On March 31, 2008 Yahoo launched web portal http://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.
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.
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.
Yahoo has announced they also plan to adopt
Novarra's mobile content transcoding service for the
oneSearch platform.
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.
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.
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.
On
7 April 2008, Yahoo! announced
Yahoo! AMP!, an online advertising management platform. 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.
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.
Other forms of advertising which bring in revenue for Yahoo include display and contextual advertising.
Working with
comScore the
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.
Financial data
| Year |
2003 |
2004 |
2005 |
2006 |
| Sales |
1 625 |
3 574 |
5 258 |
6 426 |
| EBITDA |
453 |
1 000 |
1 505 |
1 066 |
| Net Results |
238 |
840 |
1 896 |
751 |
| Staff |
5 500 |
7 600 |
9 800 |
11 400 |
Yahoo International
Yahoo is known across the world with its multi-lingual interface. The site is available in over 20 languages, including English. International Yahoo! sites include:
Other English language sites include:
Y! Australia
(Yahoo!7), formerly named "Y! Australia and New Zealand"
Y! Canada
Y! India
Y! New Zealand (Yahoo!Xtra)
Y! UK & IE2
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.
Criticism and controversy
Naming and Founding
While it was said that two graduate students from Stanford founded Yahoo, and named it for Gulliver's Travels, a swimming coach had said that it was started by Susan Carls, now the Senior Producer of Yahoo, and it was named because she ran around the swimming pool, screaming "YAHOO!"
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. 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). 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.
Work in the People's Republic of China
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 won't protect the privacy and confidentiality of its Chinese customers from the authorities.
Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders state that it's "ironic that companies whose existence depends on freedom of information and expression have taken on the role of censor."
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.
The verdict as published by the Chinese government stated the following. Shi Tao had sent the email through an anonymous Yahoo account. Yahoo Holdings (the Hong Kong subsidiary of Yahoo) told the Chinese government that the IP address used to send the email was registered by the Hunan newspaper that Shi Tao worked for. Police went straight to his offices and picked him up.
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. 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.
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." Analyst reports and human rights organizations have said that this evidence directly contradicts Yahoo's testimony before the U.S. Congress in February 2006.
Yahoo contends it must respect the laws of governments in jurisdictions where it's operating.
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.
On April 18, 2007, Xiaoning's wife Yu Ling sued Yahoo under human rights laws in federal court in San Francisco, California, United States. 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."
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.
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".
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. Yahoo News' message board section was closed December 19, 2006, due to the trolling phenomenon.
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".
Shark finning controversy
Yahoo is a 40% owner of Alibaba, which facilitates the sale of shark-derived products. 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." However, the "cultural" claim (which is pushed by the trade) has been contested.
Further Information
Get more info on 'Yahoo'.
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