At one point in time Yahoo was worth about 100 billion dollars but today it was not able to keep up with the market demand and had to face the catastrophic consequences that came up without that. Yahoo is now being bought for 4 billion dollars by Verizon.
Let’s see how Yahoo started and where it went wrong Yahoo was founded by 2 graduates of Stanford University. When Yahoo started, the internet was filled with a different kind of website and there was no specific way of browsing these websites apart from a small directory that would open for specific websites. Yahoo came up with the best web portal for the users for browsing and many cool functionalities in Yahoo search engine but at last, Yahoo was a great directory but they had the potential to be improved. Because apart from AOL which was Yahoo’s competition they were the second most popular search engine and were growing at a rapid pace, when they started they were registering up to 50,000 sites per day to increase their web directory. you might have been able to find by clicking from 1 hyperlink to another, when you search on Yahoo no meta description came as we see today’s level list of websites related to what you have searched.
1995 Yahoo was approached by to Ph.D. students at Stanford University and their name work Larry Page and Sergey Brin and they have recently founded the algorithm to make the search engine better which was named as the PageRank algorithm, where the search ranking of the website dependent upon the links that they are received from the other websites depending on the relevancy of that site and depending upon the user search queries. the PageRank algorithm was a very much efficient algorithm when it comes up to search engine finding but it did not impress Yahoo because they thought that it will drove the user away from their website which will cause them not seeing their advertisement and the revenue of the Yahoo will eventually go down and this will have their financial growth and Yahoo rejected their offer. although they have offered their algorithm at a very low cost which was only 1 million dollars at that time when yahoo who was worth millions of dollars and could have easily bought that because of No buyout of algorithm Larry Page and Sergey Brin have to drop out of Stanford to test out their algorithm and start their own company that was Google and that will cause one of the major setbacks of the Yahoo disasters.
And during that time because so many startups in the internet economy created a magical influence on investors that they thought that they were really missing the gold mines and if they do not part in this Dotcom business then there will be missing the real thing. People were ready to buy anything that had dot com added to it and even if they had no plans of generating the revenue in the nearby future and this is what created the dot com bubble at the first place because people did not understand the technology that investment they were going to make and they were had no idea if the company is going to have a perfect business model for operating in the nearby future. the internet real estate was growing and growing and people were pouring all the financial incomes into the internet startups but because of the lack of Technology during that time and understanding less of what people are going to invest, the dotcom bubble has to burst, and because of that have many companies were not able to survive this must and had to close down forever but some of the companies were able to survive such as Amazon, Yahoo, Google who can deliver on their promises.
Investors started pulling out their money because they realized that it was all a Ponzi scheme for all of the investment had been made on which made the small market small investor vanish and therefore it the market economy head on the big Investments which you are made and this also caused by lowering of the valuation of Tech company.
Yahoo in 2002 was one of the most visited websites in the world but it was losing to Google in the matter of search. After that yahoo made a lot of investment in major companies, such as a 40% stake in the emerging Alibaba company which went up to a valuation of 30 billion dollars which made up the majority Yahoo capital marketization also in Flickr one of the most photo-sharing sites which were. Yahoo tried to buy Facebook for 1 billion dollars And it was also said at some point that if we would have over 1.1 billion dollars for buying of the Facebook the board of investor would have convinced Mark Zuckerberg to sell out their company Mark Zuckerberg was Resilient in selling his company and it is also said let him put on the show for selling it to the Yahoo and he didn’t want to attend that meeting even.
Microsoft also offered one of the biggest deals for buying Yahoo and it was 44 million dollars billion dollars which is the highest offer Yahoo will ever receive.
The downfall of Yahoo started when the Dotcom bubble has burst and who was not able to update its search engine according to the need of the hour in the market and as you were heavily depending upon the Yahoo messenger and as well as Yahoo mail which was overtaken by Google Gmail and later on by other messenger platforms such as WhatsApp and Facebook and searching news on Yahoo search engine. But as internet groups and the market were able to make the specific product for their consumer base, the user was able to find their news on dedicated news platforms and websites as well as on social media sites such as Facebook and Twitter and Yahoo became the second option.
Apart from Yahoo’s setbacks in the search engine market, Yahoo was not able to claim a good leadership and vision that was able to guide his company and we can see this that there were six upper management changes of leadership in only 3 years and where the investors were looking for solid leadership and no one was able to provide them. Yahoo stagnation to changes also led to their downfall, their users to other search engines despite having a good consumer base it lost all its consumers to other platforms that came long after yahoo.