082 – Search engines – 1994

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…if [they] think Google is too powerful, remember that with search engines unlike other companies,
all it takes is a single click to go to another search engine.  Sergey Brin

David Filo and Jerry Yang were pursuing doctorates in Electrical Engineering at Stanford when they decided to try to keep track of interesting stuff they found on the Internet.  Not for them a garage, instead they started their business in a trailer.

February 1994 – on their student workstations they maintained a catalogue named after Sumo wrestlers, Akebono and Konishiki.  Like wrestlers, the catalogue grew to an enormous size, forcing them to group material under categories and subcategories.

The catalogue was launched as ‘Jerry and David’s Guide to the World Wide Web’ while they looked around for a snappier title.  They liked the dictionary definition of ‘yahoo’, a word created by Jonathan Swift in Gulliver’s Travels.  It meant rude, uncouth and unsophisticated – and Yahoo! was born.  The name was retrospectively justified as standing for ‘yet another hierarchical officious oracle’.

The idea attracted others at such pace that by autumn of that year they were achieving a daily rate of a million hits, with 100,000 unique visits.  This attracted the attention of Sequoia Capital and resulted in two rounds of investment of more than $2m.

The duo hired Tim Koogle from Motorola as CEO, and Jeffrey Mallett from Novell-WordPerfect as COO.  The team grew to almost fifty employees and this led to a second round of funding, from Reuters and Softbank, in autumn 1995.

An IPO followed swiftly in April 1996 raising $33.8m through selling 2.6 million shares at $13; by 1999 their shares were at $118.75.

Yahoo! was quick to contract with AltaVista to provide searches.  Its volume attracted heavy sponsorship and by 1997 its annual income exceeded $50m.

Yahoo! acquired Four11 Corporation in 1997 for $92m which included its free email services called RocketMail which they turned into Yahoo Mail.  The leading competitor at the time was Hotmail, acquired in 1997 by Microsoft for $400m.

2000 – A strategic relationship made Google the default search provider for Yahoo!  A month later Google announced itself the first search engine to index a billion urls.

2001 – Goto.com became Overture Services Inc; it was successfully providing MSN and Yahoo! with strong revenue streams.  It received a patent in 2001 and used this strength to buy AltaVista and AlltheWeb before being itself acquired by Yahoo! for $1.6bn in 2003.

2002 – AltaVista had been overtaken in volume of searches by Inktomi; Yahoo acquired Inktomi for $235m.

March 2005 – Yahoo! took over Flickr, the photo-sharing web service.

July 2008 – Yahoo showed interested in acquiring YouTube and offered $2m, but they passed.

October 2008 -Yahoo! launched Content Match, a paid-for service allowing advertisers to ensure their messages were seen via appropriate searches and articles.

By the end of the noughties Yahoo! had offices around the world and its search engine and directory had grown into a web portal with the largest share in online display advertising, used by over 1.6 billion individuals and recording over 3 billion hits each day.

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