When Yahoo Ruled Silicon Valley – And The World Beyond
Two Stanford University students put their studies on hold to create what was at one time an essential part of the internet. Then they stopped taking risks.
Yahoo, which began in 1994 as a directory of websites, has agreed to sell its core internet operations and land holdings to Verizon Communications for $4.8 billion. Verizon plans to combine Yahoo with AOL and use its content and technology to enhance services to customers and advertisers.
The early story of Yahoo is now Silicon Valley mythology. As graduate students at the Stanford School of Engineering in 1994, Jerry Yang, a math-oriented Taiwanese immigrant, and David Filo, a quiet programmer from Louisiana, created a directory of links called Jerry and David’s Guide to the World Wide Web. It was a handy map to what was then an unnavigable digital landscape, and web surfers loved it. The following year, when Sequoia Capital invested in the newly renamed startup, it brought in a former Motorola executive named Tim Koogle to be CEO.
Yang stayed close to strategic decisions and was instrumental after the dot-com crash in replacing Koogle with Terry Semel, the longtime co-CEO of Warner Brothers.
But was it a technology company or a media company?
Sitting on perhaps the most valuable piece of real estate on the web, shuttling between its offices in Santa Monica, California, and Sunnyvale, Yahoo executives tried to be a little bit of both.
Yang took over as CEO from Semel in 2007 but was either too nice or too unwilling to make hard decisions. In retrospect, he should have fired more employees, and banked hard toward technology and the emerging smartphone revolution.
In what now looks like his biggest blunder, Yang turned away one of the best exits Yahoo would ever see, Microsoft’s unsolicited $45 billion bid in 2008, an effort by then CEO Steve Ballmer to compete with Google.
As of July 25, 2016, Verizon Communications has agreed to buy Yahoo’s core assets for $4.83 billion.
Yahoo Chief Executive Officer Marissa Mayer will assist with the transition until the sale is complete and then depart the company with a comfortable parachute worth more than $50 million in cash and stock.
Mayer, who was hired as Yahoo’s chief executive four years ago but failed to halt its decline, was nevertheless rewarded handsomely for her efforts. Including the severance, she will have received cash and stock compensation worth about $218 million during her time at Yahoo, according to an article with New York Times.
Here Is Marissa Mayer’s Final Letter To Yahoo Employees
PHOTO: New York Times/Associated Press