46. Yahoo! Inc.

Revenues 2014: $ 4.618 billion (€ 3.476 billion)



Yahoo! Inc. is an US-American, globally active company offering Internet-based services. Founded by Jerry Yang and David Filo in January 1994, Yahoo! nowadays operates an online portal featuring a plethora of products and services. When the in-house search engine was shut down, the company entered into an agreement with Microsoft that encompasses the usage of the latter's search technology. Subsequently, the management sought to transform Yahoo! into an online-based media company.  For years, critics have claimed that Yahoo! is suffering from an identity crisis due to its unclear direction. 630 million Internet users from all over the world (as of November 2010) visit the Yahoo! sites every month.

General Information


Yahoo! Inc.   
701 First Avenue, Sunnyvale CA 94089 
Phone: 001-408-349-3300
Fax: 001-408-349-3301
Website: www.yahoo.com

Legal form: Public Company
Financial year: 01/01 - 12/31
Founding year: 1994

Table I: Economic Performance
Revenues ($ Mio.)4,9684,6184.6804.9874.9846.3246.4607.2086.9706.4265.258
Profit (loss)  (in $ Mio.)(4,748)1435905668001.244605598695751959
Share price (in $, end of year)33,2650,5140,4419,916,1316,6316,7811,9523,264037




  • Marissa Mayer, Chief Executive Officer
  • Ron Bell, General Counsel & Secretary
  • Adam Cahan, Senior Vice President of Mobile and Emerging Products
  • Ken Goldmann, Chief Financial Officer
  • David Filo, Co-Founder & Chief Yahoo
  • Laurie Mann, Senior Vice President, Search Products
  • Jeff Bonforte, Senior Vice President, Communications Products
  • Jay Rossiter, Executive Vice President, Platforms
  • Rose Tsou, Senior Vice President, Asia Pacific
  • Lisa Utzschneider, Senior Vice President, Americas Sales
  • Bryan Power, Senior Vice President, Human Resources
  • Ian Weingarten, Senior Vice President, Corporate Development & Partnerships
  • Simon Khalaf, Senior Vice President, Publisher Products
  • Enrique Munoz Torres, Senior Vice President, Product & Engineering, Advertising and Search
  • Martha Nelson, Senior Vice President, Global Editor-in-Chief
  • Debra Berman, Senior Vice President, Marketing


Board of Directors

  • Tor Braham, Deutsche Bank
  • Eric Brandt, Broadcom Corporation
  • David Filo, Yahoo
  • Catherine Friedman, Morgan Stanley
  • Eddy Hartenstein, Tribune Publishing
  • Richard Hill, Novellus Systems
  • Marissa Mayer, Yahoo
  • Maynard Webb, Webb Investment Network
  • Thomas J. McInerney, IAC
  • Jeffrey Smith, Starboard Value
  • Jane E. Shaw, Intel



In the early 1990s, the two students Jerry Yang and David Filo met for the first time on the campus of Stanford University. An encounter that would turn out to be of serious consequence. Yang, a native of Taiwan, came to the USA when he was 10 years old. He learned the English language in record time and soon became the student council representative at his high school due to his diplomatic finesse. Later on, he was awarded a scholarship for the Stanford University and began to study law and business studies. However, he graduated in electrical engineering. It was during the time he worked in the university library that he developed an improved procedure for the book inventory's systematisation. Filo, who had already graduated in computer engineering at the University of Tulane in New Orleans, became friends with Yang during their time on campus. They grew bored of the study activities and spent more and more time to surf in the relatively new Internet instead of focusing on their studies.

In 1992, the two fellow students travelled to Japan for a six-month study trip, where they discovered their passion for the Internet  as well as the very popular local art of sumo wrestling (Yang in particular). Back in Palo Alto, California, Yang tried to combined his two interests and developed an Internet website for his favourite sport.

However, he quickly arrived at the conclusion that the issue of locating and processing information would hinder the realization of the project. He discovered a distinct lack of technological resources that would allow for a more target-orientated search of factual information in the Internet. After a few weeks of intensive searching, Yang managed to create an archive of a not inconsiderable number of websites about Sumo wrestling.

The hard work he put into his Sumo directory made him think establishing an address register for Internet services in general. In January 1994, Yang and Filo created a website called 'Jerry's Guide To the World Wide Web', a hierarchically structured register of other websites. The two students knew, that there was an immense demand within the Internet community for having only a single place on the net that would point the user towards the most appropriate website. The doctoral students developed a navigation tool in order to sort the growing number of Internet sites on the web into categories.

Three months later, 'Jerry's Guide to the World Wide Web' was renamed to 'Yahoo'. According to Yang and Filo, the name was chosen for three reasons. Initially, Yahoo! stood for roughness, genuinity and broadness. Furthermore, Yahoo! is an abbreviation for 'Yet another hierarchical officious oracle'. Another inspiration for the name was Yang's tendency to cry out 'Yahoo' whenever he would discover a new website that he could add to his register. An exclamation mark was added because of to the fact that a barbecue sauce supplier already owned the copyright for the name.

The new search engine quickly registered a million hits by more than 100.000 users. In 1995, Yahoo! was officially founded and in March of the same year, Yahoo! became a listed company. In mid-August 1995, the website would begin to feature adverts for the first time. Tim Koggle became Yahoo!'s first CEO in 1995. Koogle, or simply 'TK' to his colleagues, had been the president of Intermec Corp. and vice-president of the affiliated firm Western Atlas Inc. He also made a name for himself working in several leading positions at  Motorola. During his time at Yahoo, the special interest magazine BusinessWeek included Koogle in the list of their 'Top 25 Executives of the Year'. He was considered an expert for profitable television channels such as CNBC and Fox News.

In 1996, Yahoo! became a listed company. Investors from all over the world could now invest money into Yahoo! shares. Yang and Filo not only became multi-millionaires over night, but also the prototypes of the modern CEO – young and anti-corporative entrepreneurs, who would go to the office in jeans and work late into the night, barefooted and seeing eye-to-eye with the employees.

With risk capital from Sequoia Capital in the back, which would also help the competitor Google getting of his feet, plus Reuters Ltd. and the Japanese investment company Softbank, the company launched a worldwide expansion of its successful business model. Hence, the national markets of Germany, Japan, Great Britain, France (in 1996), Singapore, Australia, Korea, Denmark, Norway, Sweden (in 1997), Italy, Spain (in 1998), China (1999), Argentina, India, Canada (in 2000) received their own versions of Yahoo! in the respective national language.

Soon after entering the stock market, Yahoo! was transformed from a mere search engine into a web-portal, although this mainly happened through the acquisition of other Internet-based service companies. The web mail service Rocketmail by communication company Four11 became Yahoo! Mail. The gaming platform Classicgames.com would henceforth be known as Yahoo! Games. Through the acquisition of Yoyodyne Entertainment, Yahoo! boosted its marketing possibilities considerably. The 'Do You Yahoo?' slogan was the centrepiece of an successful advertising campaign that would be present on television more than anything else. With the creation of Yahoo!ligans (later Yahoo! Kids), a search engine tailored towards kids that would churn out only g-rated results, the target focus was broadened even more. The multi-functionality was further expanded by acquiring eGroups, the leading portal for email organisation. Furthermore, Geocities, a provider for the creation of private homepages was bought and effectively combined with Yahoo!. Apart from the search engine, Yahoo! now offered its users other services such as an email-service, message boards, chatrooms, games, news and shopping. After taking over new companies, Yahoo! would frequently change the term and conditions of the previous owners, which the users had to accept prior to using the services. Thus, Yahoo! attained the intellectual property rights to content that users created when they had been using the previous companies' products as well. Yahoo! more or less bought these contents on top of the product itself. The web services that ended up being a part of Yahoo! never enjoyed a lot of popularity with the users. 

Significant for the renunciation of Yahoo! as a pure search engine in favour of becoming a multimedia entertainment platform had been an agreement that was signed by Yahoo! and competitor Google in 2000. This agreement stated that all searches conducted through the Yahoo! Homepage were to be processed by the Google search engine. The partnership ended in 2004 and Yahoo! has been using its own search algorithms ever since.

After six successful years, Yahoo! suffered through its first big crisis in 2001. Other Internet-services and web portals, especially Google, gradually intruded into the online-search market segment that had previously been dominated by Yahoo!. While a share of Yahoo! had been worth 235$ in early 2000, the value plummeted to 11$ per share in August 2001.

In the middle of the dot.com bubble, the US news channel CNBC reported an alleged company merger between Yahoo! and the online auction platform eBay, yet the rumour turned out to be nothing but that. However, the two companies agreed to form an alliance regarding their advertising and marketing activities in 2006.

When the 'Dot.com bubble' finally burst, which did not hurt the company as much as some had predicted it would, Yahoo! began entering the telecommunication market. Yahoo! offered nationwide DSL-access through partnerships with  SBC Inc. and Verizon Communication, a measure that was supposed to make the company an eligible competitor of AOL.

In 2004, Koogle's successor Terry Semel ended the partnership with Google and its search engine and instead improved the own search technology. However, the upgrade of the search engine had not been the result of the company's own engineers' efforts but came down to the acquisition of Inktomi, Overture Services Inc., and their branches AltaVista and AlltheWeb.

Semel's strategy paid off. In 2004, the yearly income was doubled to 1.4 billion $ (as compared to 2003), the value of the share evened out at 40$ a piece and Yahoo! was included in a ranking of the '1000 biggest companies in the US' by Fortune magazine for the first time ever.

The year 2005 witnessed several endeavours that indicated Yahoo's reaction to the web 2.0 revolution, such as the acquisition of Flickr, a digital photo-portal, blo.gs – a weblog forum, the launch of Yahoo! 360 (shut down in the meantime) and Yahoo! Music. Yahoo! Music made an excellent job of adapting to the users' changed habits regarding the consummation of music. Terry Semel's distinct handwriting once again fed through the results and it seemed he made good use of concepts he picked up during his time at  Time Warner (Warner Music is the biggest music publisher in the world). Yahoo! Music is a portal for music downloads that are subject to charges, ad-financed Internet radio and promotion platform for labels and the artists at the same time. The launch of Yahoo! 360, a social networking service, was the counter-strategy to News Corps' market leader, Myspace. What should also be mentioned is the one-billion-Dollars entry in the Chinese online business Alibaba. That sows, how important the Asian market and its millions of potential new customers has become. Alibaba has been supervising the whole operations of Yahoo! China ever since.

In February 2008,  Microsoft sent shock waves through the whole Internet business when it proposed a take-over of Yahoo! Worth 45 billion US-Dollar. With this proposal, the software giant hoped to  benefit from synergy effects that would ensure savings of a billion US-Dollars per year and also challenge Google's role as the leading online advertising platform.

The reaction of Google followed on the foot. In a blog, David Drummond, the CLO at the search engine market leader claimed that the Microsoft's offer would be nothing but a hostile take-over attempt, which endangered the liberal nature and freedom of the Internet. He also warned that Microsoft was on the way to achieve a monopoly, not unlike the company's dominance when it comes to computer operating systems. Especially the combination of both companies' instant messaging software (Yahoo! Messenger and MSN messenger) would ensure a market- controlling position in this sector.

Microsoft-CEO Steve Ballmer already met with then-Yahoo! Manager Terry Semel in 2006 and 2007 in order to discuss a potential take-over. However, back in the day, Semel's successor, Yahoo!-founder Jerry Yang heavily campaigned against the buy-out of his company. The fact that the take-over was stopped after all probably came down to Yang, despite the fact that Microsoft was willing to take a 23 billion US-Dollar credit to see it through. Approximately one week after Microsoft's initiative, the Yahoo! board of directors announced in a press release that accepting the offer would not be in the interest of Yahoo! and its shareholders. The company, its global brand, its target group and its future perspectives were 'substantially underestimated' by the offer. It seems that Yahoo! is still waiting for a better offer.

Yet, the rejection of the offer was not met with approval by all parties involved. Ten days after the rejection, two pension funds based in Detroit that operated partially on the basis of Yahoo! shares sued the company and its board of directors. The lawsuit accused Yahoo! of irresponsible conduct regarding its shareholders by rejecting the take-over offer.

By the end of July 2009, a cooperation between Microsoft and Yahoo did see the light of day after all. As a result of the collaboration that started in early 2010, all searches on Yahoo!-Pages will be processed by Microsoft's new search engine Bing. Both companies expect the collaboration to boost their advertising business. For the first five years of the partnership, which will run until 2019, Yahoo will gain 88 percent of all revenues of all adverts published alongside the search results, while Microsoft will receive the remaining 12 percent. Yahoo maintains the right to visually alter the search results of Bing at its own discretion. Hence, the search results' presentation will still look different from the Bing-search. Yahoo plans to enrich the results with video material and additional information that can be accessed without leaving the website itself.



In early January 2008, Carol Bartz became the new head of Yahoo!. Bartz was the CEO of Autodesk, the fourth-largest software company in the world, where she had been was responsible for increasing the revenue from 300 million by five times to 1,5 billion US-Dollar over the course of 14 years. In her youth, she attracted attention because of civil disobedience, protesting against the Vietnam war. Today, she tends to be more calm and prefers to spend her leisure time gardening. When she entered the company, she announced to cultivate a zero-tolerance policy for employees that would make company-internal information available to the public in any way or form. Yet, the roll call could not prevent that her welcome-memo found its way into the Internet immediately.

Bartz, who is known for not mincing matters during conferences and talks, wanted to gradually transform Yahoo! into a media company. Yet, not all investors and employees agreed with her policies. After a grace period of six month, in which she had initially been regarded as the authoritative counterpart to the nice but indecisive predecessor Jerry Yang, she was facing immense criticism during the agreement with Microsoft. The investors lamented that Yahoo! would have been better of being sold to Microsoft for 46 billion US-Dollars as a whole instead of gaining five billion US-Dollars from the proposed ten-year partnership.

About a year after she stepped up to the plate, the new Yahoo! CEO's results were twofold. On the one hand, Bartz succeeded into putting the Yahoo! Company onto a much more stable base and end the lurching course of her predecessor Jerry Yang by making uncompromising decisions. On the other hand, she could not manage to trigger the desired growth in the company and the revenues dropped during her first year. Bartz talked of the 'wonderful year' she had at Yahoo!. No surprise there, she earned the astronomical sum of 47,2 million US-Dollars in her first year after all, including wage and bonus payments. According to the consulting company Farient Adviser, it is the highest wage that has ever been paid to a female CEO. The Wall Street analyst failed to find any relation between the princely payment for Bartz, who already fired a total of 700 employees, and the company's results. In the fall of 2011 she was fired from her position and was succeeded by former PayPal President Scott Thompson. Shortly after Thompson became CEO, Co-Founder Jerry Yang resigned from all positions, effectively preventing his lay-off by disappointed institutional share holders. Thompson, however lasted only four months, and stepped down in May 2012 after a fabricated degree in computer engineering had destroyed his credibility. He was eventually succeeded by former Google executive Marissa Mayer.

Business Fields



Yahoo! Search Marketing
Keyword-based 'Pay per Click' tool for advertising on the Internet, developed under the code name 'Panama'. Advertising companies are paying to be placed next to specific keyword searches. As part of the agreement, Microsoft's AdCenter will take over the search engine's marketing.

Yahoo! Publisher Network
Advertising tool for website operators, who wish to make a profit based on advertising placement that is relevant to the content.

Yahoo! Small Businesses
provides middle-class companies with IT-systems, including email services, domains and homepage support against a fee. The division is scheduled to be sold.  Yahoo! Local is a local Internet 'yellow pages' registry.

Mobile sector

Yahoo! Mobile
Popular European (particularly GB) mobile phone software for sending emails, messages, ringtones and mobile games. In May 2010, Yahoo! announced a large-scale cooperation with mobile phone manufacturer Nokia. In the future, Yahoo!'s email and navigation services will be an offer available exclusively on Nokia mobile phones.


Yahoo! Mail
Largest web-mail service in the world that is particularly popular in the USA and sports twice as many users than Hotmail and Gmail (as of November 2010).

Yahoo! Messenger
A popular tool that is financed through advertising and used to communicate over the Internet. Users of the Yahoo! Messenger receive a so-called 'Yahoo! ID' that grants them access to numerous other Yahoo! Tools.

Web 2.0-Products

Website for photo-sharing: Registered users can create digital archives of their photographs, send them to friends or create photo-blogs. Approximately three million photographs are uploaded to Flickr every day.

Yahoo! Video
Video-Platform that lets users search for videos and upload their own films.

Social Geolocation service, based in Indonesia and taken over in May 2010, which lets the user discover shops, restaurants and people in his or her proximity via a mobile phone – a service not unlike Google's Foursqaure.

Associated Content
Publication platform that was acquired in May 2010 and lets users publish content against a fee.

Yahoo TV
Tool to receive Internet-based content on the television. Yahoo agreed to partnerships with Sony, Samsung, Vizio, LG and Toshiba, the product range of which feature television devices with pre-installed Internet-service.

Digital newspaper store for tablet PCs.

Digital Media/Portal

Yahoo! Sports
Popular sport information portal in the United States, featuring the work of several famous sports writers. In February 2010, Yahoo! took over the Citizen Sports portal in order to strengthen its market dominance in all things sports-related.

Yahoo! Health
Portal about health, the content of which is produced in cooperation with Healthline Networks, the leading search engine for all things related to illnesses and symptoms.

Yahoo! Games
Games division of Yahoo!: Users can download games or play online with other users

Leading Celebrity-Gossip-Website in the USA.

Yahoo Finance
Sporting 45 million visitors per month, Yahoo! Finance is the most successful economy portal in the world. Yahoo! Finance also features the online news broadcasts "TechTicker/Daily Ticker" (four million viewers per month) and "Breakout". The latter of which is presented by the former CNBC presenters Jeff Macke and Matt Nesto.

Yahoo News/ The Upshot
Blog/News-Network of Yahoo!, divided into segments for Politics ("The Ticket"), USA ("The Lookout"), Foreign Policy ("The Envoy") and Media ("The Cutline"). "The Upshot" is home to former journalists from Newsweek, Politico and the Gawker-Blog-Network.

Activities in Asia


Just like Google, Yahoo had been reprimanded by human rights organisations in the past for its cooperation with the Chinese government. Yahoo! played an integral part in developing a system for Internet censorship in China and is one of 300 companies that signed the 'public deceleration of self-discipline' by the communist state. The British journalist union NUJ has urged its 40.000 members on the 2nd of June 2006 to boycott Yahoo, the reason for which is a case from 2005. The Chinese journalist Shi Tai was sentenced to ten years in prison, when he used his Yahoo! account to send a regime-critical email to a non-government organisation. Several newspapers reported, that Yahoo had directly collaborated with the Chinese government in order to facilitate this arrest. In April 2010, the Yahoo! Mail accounts of ten journalist working in China and Taiwan became the target of hacker attacks which resulted in temporary blocking of the accounts. The organisation 'Journalists without borders' urged the Yahoo! management to take a public stand regarding this attacks. Yahoo! failed to deliver a public statement regarding how and why the email-accounts had been blocked to this day.

Yahoo holds 44% of shares of the Chinese online company Alibaba. To former CEO Bartz, investing in the Alibaba-group had been the only way to profit from the Chinese Internet boom, without the necessity to wrestle with the local authorities, as Google had to learn the hard way when several of its pages and portals were closed down. The relationship between Yahoo and Alibaba has been in trouble for some time now. Alibaba-CEO Jack Ma fails to see the benefit of the Alibab-Yahoo! Partnership ever since the search function was outsourced to Microsoft's Bing service and considers Yahoo! to be nothing but an investor any more.

Furthermore, Yahoo holds a 35%-share of Yahoo Japan. However, the company has been trying to sell the regional offshoot since early 2011. Ending the partnership that had been rather unsuccessful would provide Yahoo with up to eight billion US-Dollars. Money that the company urgently needs in the fight for survival against Facebook and AOL. The respective plans (such as selling to the majority shareholder Softbank) were put on ice for the time being due to the Tsunami catastrophe in March 2011.

With a reach of 73% percent, Yahoo! is the most popular Internet brand in India by a mile. Out of all the 80 million Indians who use the Internet at all, more than half visit the Yahoo! Homepage every month. The Indian Yahoo! service focusses on a younger target audience, considering that a large part of the Indian Internet user-base is between 16 and 24.


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