Long before search engines there was Yahoo!. It was the directory – started as a list of Jerry Yang’s and David Filo’s favorite sites – for the internet before Google took over the world. There was competition – AltaVista, Infoseek, Lycos, and a long list of others – but Yahoo! was it. Anyone who grew up during the internet boom knew about it and used it and, I bet, many secretly still use it today.
But what really made Yahoo! stand out at that time, was something few internet companies ever attained. Profits! It was profitable by the end of 1996. A truly rare feat. It was a dot-com darling at the time, peaking around a $125 billion market cap. This 1999 Fortune article sums up the period well.
This week Verizon bought the Yahoo! core business for a measly $4.8 billion.
It’s safe to say Yahoo! failed miserably at a lot of things. Even the 40% stake in Alibaba – probably the best investment Jerry Yang ever made – got whittled down to just 15%. Wasted capital, missed opportunities, and bad CEO hires were its downfall. The lesson that being first early on doesn’t guarantee anything – a repeated story in tech – certainly applies.
Some may say that the Dot-com era ended when AOL bought Time Warner in 2000 when the digital company made a final land grab of sorts. Only a few months later the bubble would burst.
I prefer to think it ended this week.
Last Call
- The rise and fall (OK — mostly fall) of Yahoo – FreeCodeCamp
- The Shame and Glory of Yahoo’s China Adventure – Backchannel
- A Dozen Things I’ve Learned from Mark Cuban – 25IQ
- GMO’s Mean-Reversion Strategy is Tested in Today’s Market – Institutional Investor
- Where Financial Reporting Still Falls Short – HBR
- The Mind Games Investors Lose – Morningstar
- The Social-Network Illusion That Tricks Your Mind – MIT Tech Review
- The Last Iconic Baseball Card – Sports Illustrated
