Yahoo, the company behind the first comprehensive directory of the World Wide Web, is in trouble. In June the company's chief executive officer resigned, a result of stockholder criticism of Yahoo's poor ad-revenue performance compared with Web search-market leader Google. A month earlier, Yahoo shut down its auction service for failing to compete effectively against market leader eBay, and its chief technology officer resigned.
Yahoo was founded in 1994 by Stanford University graduate students Jerry Yang and David Filo, and it was Yang who just took over the reins from outgoing CEO Terry Semel, a move reminiscent of Apple bringing back cofounder Steve Jobs as CEO 10 years ago after the company floundered.
Yahoo remains a huge Internet presence, offering a wide range of popular services. Along with its directory, it offers Web search, e-mail, discussion groups, news, shopping and more. Things got started back in January 1994 when Yang and Filo launched a Web site named "Jerry's Guide to the World Wide Web," which three months later was renamed "Yahoo!" with the exclamation point.
The exclamation point was needed, according to the company, because other companies in other industries had already trademarked the name without the exclamation point. Most people, and publications, don't use the exclamation point. With or without it, the name never did effectively represent the seriousness of Yahoo as a business enterprise.
Yahoo's first major diversification effort was to acquire the online communications company Four11 in 1997, renaming its Web e-mail service Yahoo Mail, which competed initially with Microsoft's Hotmail. Soon afterward it also acquired eGroups, which became Yahoo Groups and is still the Web's most popular e-mail based discussion group platform. At about the same time the company launched Yahoo Messenger to compete with AOL Instant Messenger.
Yahoo survived the dot-com bubble of 2000-2001, but its stock price plummeted from its all-time high of $450 a share in January 2000 to its all-time low of $8.11 in September 2001.
To deal with Web search juggernaut Google, Yahoo first licensed Google's search engine. Then Yahoo began acquiring other search engines, including Inktomi, AltaVista and AlltheWeb. Four years after partnering with Google, in 2004 Yahoo dropped it to return to using its internal search technology.
In response to Google's launching its highly regarded Gmail Web e-mail service in 2004, Yahoo first expanded the storage limits of Yahoo Mail users and then in May of this year began offering unlimited storage. It also acquired e-mail provider Oddpost to create a new Yahoo Mail interface.
Some of Yahoo's services have been better executed than others. Its Yahoo Shopping service has long been a convenient way to shop online and bargain hunt. You can browse in numerous departments or search for a particular type of product or brand name. Yahoo Shopping lists the products from lowest priced to highest and rates merchants from one to five stars.
A recent investigation by PC World magazine, however, showed that many merchants rated highly by Yahoo had poor ratings by the Better Business Bureau. The same was true for other online shopping services. "Ratings and reviews can be faked," according to the magazine. My own experience with Yahoo Shopping has been entirely positive.
Yahoo Auctions was never positioned well to compete against eBay. From the outset it greatly limited buyers' ability to communicate and warn one another about scams in the works, and it let sellers automatically extend auctions if a bid was received shortly before an auction's close, eliminating "sniping," a key benefit for buyers.
Yahoo Mail and Yahoo Groups remain popular services, and deservedly so. But the anti-spam filters of these services function poorly, falsely reporting many e-mails and posts as spam. My personal attempts over many months to prevent my own e-mail and posts from falsely being flagged have been met with canned responses and inaction by Yahoo. Others have reported the same.
Still, Yahoo is one of the Internet's heroes. Here's hoping that Jerry Yang is able to do with Yahoo what Steve Jobs did with Apple ten years ago.
Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway. He can be reached at email@example.com or http://www.netaxs.com/~reidgold/column.