Business

How Yahoo Lost the Internet: Every Missed Deal, from Google to Microsoft

Yahoo, founded in 1994 by Jerry Yang and David Filo, was worth about US$125 billion in 2000. It passed on or failed to buy Google (1998, 2002) and Facebook (20…

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THE START

Jerry and David's Guide to the Web

Jerry Yang and David Filo hand-sorted their favourite websites into categories and soon renamed the list Yahoo!

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MISSED #1

Yahoo passes on Google's technology

Larry Page and Sergey Brin reportedly offered PageRank to Yahoo for about US$1 million. Yahoo said no.

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THE PEAK

Worth about US$125 billion

At the dot-com peak Yahoo was one of the world's most valuable companies. From June 2000, Google powered its search.

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MISSED #2

A US$3B offer for Google

Terry Semel reportedly balked at Google's price. Yahoo bought Inktomi and Overture instead.

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THE WINNER

US$1B for 40% of Alibaba

Alibaba later bought back half the stake for ~US$7.1B, and the IPO paid Yahoo ~US$9.4B more.

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MISSED #3

Facebook says no

Yes. Mark Zuckerberg turned down a reported US$1 billion offer, later cut to about US$850 million.

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THE BIG ONE

Microsoft bids US$44.6 billion

Yes. The board said it undervalued Yahoo. Microsoft raised to US$33, Yahoo wanted US$37, and Microsoft withdrew on 3 May.

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SEARCH

Bing takes over Yahoo search

A year after rejecting Microsoft, Yahoo handed its web search results to Bing, keeping 88% of search revenue at first.

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MAYER ERA

Marissa Mayer buys Tumblr

No. Yahoo wrote off about US$712M by 2016, and Verizon sold Tumblr in 2019 for a reported under US$3M.

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BREACHES

Billions of accounts exposed

Yahoo disclosed a 2014 breach of 500M accounts and a 2013 breach of 1B+. In 2017 Oath said all 3B were hit.

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SOLD

Verizon buys Yahoo for ~US$4.48B

About US$4.48 billion, US$350M less than agreed. The Alibaba and Yahoo Japan stakes became Altaba.

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NEW OWNER

Apollo buys Yahoo and AOL

Apollo funds own about 90% and Verizon about 10%. Jim Lanzone became chief executive.

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AI COMEBACK

Yahoo launches Scout

Scout writes cited answers using Anthropic's Claude and Bing. Yahoo sold AOL and faces IPO talk, with no filing yet.

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THE LESSON

Seeing the future isn't owning it

It spotted Google, Facebook and Alibaba early but tried to be everything, while focused rivals took each new layer.

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