Yahoo: The tech giant that came so close to conquering the Internet and yet was completely lost. There are many reasons for Yahoo's fall, but it is the most about missed opportunities and in this, we are going to look at the greatest opportunity in the history of mankind.
how Yahoo once, but twice Google did not fail to purchase. In the mid-1990s, the Internet was still untouched by a world full of possibilities. It was becoming clear that there was money to be made there, but the specifics of how to do this were still up for debate.
Yahoo was one of the biggest players in the Internet Gold Rush at the time: it was not the first time, but it had a very solid concept. When the Internet was small, the founder Yahoo had the brilliant idea of organizing all unknown websites in neat human-curators, which would be very convenient for the average user. The Yahoo search engine emerged as the aspect byproduct of this directory and was never really the focus. In fact, at one point early in its development, the Yahoo design team placed the search box not at the top of the homepage, but at the bottom.
Yahoo had an unprecedented look during these early days: it was one of the first companies to adopt banner ads, the first major revenue stream coming directly from the Internet. Early banner advertisements were primitive but still profitable. First, companies literally rent Yahoo's homepage like a billboard for $ 10,000 per month, and then as technology will begin charging their advertisers based on Yahoo's impressions, or how often users advertise their ads Were seen. But banner ads had a very dangerous incentive they encouraged Yahoo to keep its users on their website for as long as possible. In a way, banner ads came into controversy with Yahoo's very purpose, After all, it was created to help you find the best website for any given topic, which means that you should not be put on yahoo.com forever. But when the flood of money started coming in, banners became the new philosophy and Yahoo began to expand its functionality. It was no longer just a search engine, but a fully functioning web portal, and to be fair it also came upon Domino's rivals to make the same decision; In fact, this period of Internet history came to be known as Portal Wars.
Yahoo thought it could be made for Internet users: Thought it could contain everything they might need on yahoo.com. This philosophy further enhanced the search-engine aspect of Yahoo. Of course, even though Yahoo management did not consider search to be important, some people did. Two Ph.D. candidates at Stanford, for example, Larry Page and Sergey Brin, tried to create a better search engine than a neglected Yahoo and they were successful. In 1996, he developed an algorithm called PageRank, which can determine the relative importance of a given web page based on a given web page.
This was a highly effective algorithm In fact, it was very effective: when Larry and Sergey tried to sell PageRank for just $ 1 million in1997, they met with very surprising criticism. Yahoo executives argued that using Page Rank would hurt Yahoo because people would see far fewer banner ads in the process, reducing Yahoo's revenue to whatever they were looking for too fast. With no purchase offer, Larry and Sergey were left with no choice they had to move out of Stanford to develop their own search engine, Google. Over the next two years, while Google was downsizing its product and rapidly gaining a loyal userbase due to its high quality, Yahoo and other portals were stuck in time. He made millions of dollars from the banner, but most of what he earned was spent on creating content for his portal equality for children with sports, a place to book tickets for travel, a job board, and many Sites. Yahoo had indeed become the Internet for people, but it was also neglecting its own directory, which was still curbing inactive people despite the rapidly increasing number of websites on the Internet. Eventually, that method became uncertain, Yahoo began licensing the Google search engine for $ 7 million a year from 1998, even though they had only passed on the offer to buy it for a year. But when Yahoo was rolling over banner money and not caring, Google had to do something new or die. Google's user-first approach is to outright disapproved ads, but instead naturally leads them to paid search: charging advertisers on top of search results in a non-intrusive text format Visually, almost if they themselves were part of the results. To be fair, it was not Google that came up with the concept the first paid search program was started by a website called GoTech.com.
But Google made a better improvement on things created by GoTo: to close things, Google allowed advertisers to buy ads directly from Google, whereas with Yahoo and all other portals you had to go through a sales agent. Google automated this entire process, starting for small businesses in addition to large corporations. The program created by Google is known as AdWords and was released in late 2000, just in time for a port-com crash that competed with Yahoo's Portman.
Yahoo itself survived, but knew that it needed a change and a very fundamental decision was made for that ultimate management: they have no experience in any tech company. The man, Terry Semel, was CEO of Warner Bros., which earned him a good reputation in Hollywood, but not in Silicon Valley. He joined Yahoo in 2001 and the idea was that he would give a fresh outlook on things, which he credits. He saw banner ads going the way of the dinosaurs and paid search was the future, which led him to a much easier conclusion Yahoo had to engage in paid search. There were two ways to do this and Terry, being a practical man, went with the easiest one he tried to buy Google. In 2002 he chatted with Larry and Sergey and after exchanging a few numbers, Terry presented him with a proposal $ 3 billion of Google's entirety. By this point, however, Larry and Sergey knew they were in the driver's seat Eventually, this was Yahoo coming to them, not the other way around, which is why they made a counter-proposal $ 5 billion. This number changes a lot you must remember that Yahoo had barely recovered from the dot-com crash in 2002 and that the market cap was around $ 5 billion. In other words, Larry and Sergei's evaporation was not an acquisition, but a merger between similar companies. For veteran negotiators like Terry, it was sound so they had to go with their Plan B. to defeat Google at their own game.
To that end, Terry had a few things to achieve: To start, he needed a new search engine and was, at the time, the second-best search engine in Google, after Google. Like Yahoo, the Inktomi dot-com crashed incredibly after the crash, which is why Yahoo could buy it cheaply for dirt: for just $ 250 million in 2002 when it was $ 25 a year ago Billion. With a search engine in hand, Terry then monetized it with an advertising platform for those in need, so in 2003 he purchased the originally paid search plug out GoTo.com, which by then was named Overture. Now, Terry had all the pieces of Pazlund that he just needed to combine them, but it proved more difficult than expected. Much of the underlying technology was outdated Overture's ads, for example still had to be reviewed by a human, compared to the unauthorized system AdWords used from the beginning. It took Yahoo a full two years to integrate the separate technological foundations of Overture and Intakami, but by that point, it was already too late. When Yahoo bought Overture in 2003, they partnered with Google for advertising revenue, but exactly three years later Google's revenue grew and the trend only continued. Of course, Google did not have to buy, there were many mistakes that Yahoo ultimately caused their demise, but it is easily expensive. Yahoo can be acquired for $ 5 billion in 2003 which is now worth more than half a trillion, so to say that Google Stockway should not buy is a bad decision.
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