Yahoo!

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Yahoo! Inc.

Type
Public (NASDAQ: YHOO)
Founded
Santa Clara, California(March 1, 1995)
Headquarters
701 First AvenueSunnyvale, California, USA
Key people
Jerry Yang, Chairman, CEO, Chief Yahoo and Co-founderDavid Filo, Chief Yahoo and Co-founderSusan Decker, President
Industry
Internet, computer software
Products
(See list of Yahoo! products)
Revenue
▲$6.7 billion USD (2007)[1]
Operating income
▲ $730 million USD (2007)[2]
Employees
13,600 (October 18, 2007)
Slogan
"Do you Yahoo?"
Website
www.yahoo.com
Yahoo! Inc. (NASDAQ: YHOO) is an American public corporation and global Internet services company. It provides a range of products and services including a Web portal, a search engine, the Yahoo! Directory, Yahoo! Mail, news, and posting. It was founded by Stanford University graduate students Jerry Yang and David Filo in January of 1994 and incorporated on March 2, 1995. The company is headquartered in Sunnyvale, California.
According to Web traffic analysis companies (including Compete.com, comScore,[3] Alexa Internet,[4] and Nielsen Ratings),[5] Yahoo has been one of the most visited websites on the Internet, with more than 130 million unique users per month. The global network of Yahoo! websites receives 3.4 billion page views per day on average as of October 2007, making it one of the most visited U.S. websites.[4]
On February 1, 2008, Microsoft made an unsolicited bid to purchase Yahoo shares at the price of $31 per share, a bid valuing $44.6 billion for all the shares.[6] The offer was turned down by Yahoo's board of directors on February 11 because they thought Microsoft's offer was too low.[7]

Contents
1 History and growth
1.1 Early history (1994-1996)
1.2 Growth (1997-1999)
1.3 Dot-com bubble (2000-2001)
1.4 Post dot-com bubble (2002-2008)
1.4.1 Possible acquisition by Microsoft
2 Products and services
2.1 Search
2.2 Communication
2.3 Content
2.4 Mobile
2.5 oneSearch
2.6 Commerce
2.7 Small business
2.8 Advertising
2.9 Yahoo Next
3 Revenue model
4 Financial data
5 Yahoo International
6 Criticism and controversy
6.1 Yahoo paid inclusion controversy
6.2 Adware and Spyware
6.3 Work in China
6.3.1 Chinese dissident imprisonment controversy
6.3.2 Sued in US court for outing Chinese dissident
6.4 Chatrooms and message boards
6.5 Image search
6.6 Shark finning controversy
7 See also
8 Notes and references
9 External links
History and growth

Early history (1994-1996)

Yahoo co-founders Jerry Yang (left) and David Filo (right)
In January 1994, Jerry Yang and David Filo were Electrical Engineering graduate students at Stanford University. They started a list of web pages in a campus trailer in February 1994, as a way to keep track of their personal interests on the Internet. The lists were published as a web site named "Jerry's Guide to the World Wide Web", and grew large enough to require categories and subcategories organized in a hierarchy. Before long they were spending more time on their home-brewed lists of favorite links than on their doctoral dissertations.
In April 1994, "Jerry's Guide to the World Wide Web" was renamed "Yahoo!". Filo and Yang said they selected the name because they liked the word's general definition, which comes from Gulliver's Travels by Jonathan Swift: "rude, unsophisticated, uncouth." Its URL was akebono.stanford.edu/yahoo.[8]
By the end of 1994, Yahoo had already received one million hits. Yang and Filo realized their website had massive business potential, and on 1 March 1995, Yahoo was incorporated.[9] On April 5, 1995, Sequoia Capital provided Yahoo with two rounds of venture capital.[10] On 12 April 1996, Yahoo had its initial public offering, raising $33.8 million dollars, by selling 2.6 million shares at $13 each.
"Yahoo" had already been trademarked for barbecue sauce (and knives (by EBSCO Industries)). Therefore, in order to get the trademark, Yang and Filo added the exclamation mark to the name.[11]

Growth (1997-1999)

Screenshot of the Yahoo main page on April 26, 2007
Like many search engines and web directories, Yahoo diversified into a Web portal. In the late 1990s, Yahoo, MSN, Lycos, Excite and other Web portals were growing rapidly. Web portal providers rushed to acquire companies to expand their range of services, in the hope of increasing the time a user stays at the portal.
On 8 March 1997, Yahoo acquired online communications company Four11. Four11's webmail service, Rocketmail, became Yahoo Mail. Yahoo also acquired ClassicGames.com and turned it into Yahoo Games. Yahoo then acquired direct marketing company Yoyodyne Entertainment, Inc. on 12 October. On 8 March 1998, Yahoo launched Yahoo Pager,[12] an instant messaging service that was renamed Yahoo Messenger a year later. On 28 January 1999, Yahoo acquired web hosting provider GeoCities. Another company Yahoo acquired was eGroups, which became Yahoo Groups after the acquisition on 28 June 2000.
When acquiring companies, Yahoo often changed the relevant terms of service. For example, they claimed intellectual property rights for content on their servers, unlike the companies they acquired. As a result, many of the acquisitions were controversial and unpopular with users of the existing services.[clarify]

Yahoo headquarters in Sunnyvale

Dot-com bubble (2000-2001)
On January 3, 2000, at the height of the Dot-com boom, Yahoo stocks closed at an all-time high of $475.00 a share. 16 days later, shares in Yahoo Japan became the first stocks in Japanese history to trade at over ¥100,000,000, reaching a price of ¥101.4 million ($962,140 at that time).[13]
On February 7, 2000, yahoo.com was brought to a halt for a few hours as it was the victim of a distributed denial of service attack (DDoS).[14][15] On the next day, its shares rose about $16, or 4.5 percent as the failure was blamed on hackers rather than on an internal glitch, unlike a fault with eBay earlier that year.
During the dot-com boom, the cable news station CNBC also reported that Yahoo and eBay were discussing a 50/50 merger.[16] Although the merger never materialized the two companies decided to form a marketing/advertising alliance six years later in 2006.[17]
On June 26, 2000, Yahoo and Google signed an agreement which retained Google as the default world-wide-web search engine for yahoo.com following a beta trial in 1999.[18]

Post dot-com bubble (2002-2008)
Yahoo was one of the few surviving large Internet companies after the dot-com bubble burst. Nevertheless, on September 26, 2001, Yahoo stocks closed at a five-year low of $4.06 (split-adjusted).
Yahoo formed partnerships with telecommunications and Internet providers to create content-rich broadband services to compete with AOL. On June 3, 2002, SBC and Yahoo launched a national co-branded dial service.[19] In July 2003, BT Openworld announced an alliance with Yahoo.[20] On August 23, 2005, Yahoo and Verizon launched an integrated DSL service.[21]
In late 2002, Yahoo began to bolster its search services by acquiring other search engines. In December 2002, Yahoo acquired Inktomi. In February 2005, Yahoo acquired Konfabulator and rebranded it Yahoo Widgets,[22] a desktop application and in July 2003, it acquired Overture Services, Inc. and its subsidiaries AltaVista and AlltheWeb. On February 18, 2004, Yahoo dropped Google-powered results and returned to using its own technology to provide search results.
In 2004, in response to Google's release of Gmail, Yahoo upgraded the storage of all free Yahoo Mail accounts from 4 MB to 1 GB, and all Yahoo Mail Plus accounts to 2 GB. In 2007, Yahoo took out the storage meters and made the storage limit unlimited. On 9 July 2004, Yahoo acquired e-mail provider Oddpost to add an Ajax interface to Yahoo Mail.[23] On 13 October 2005, Yahoo and Microsoft announced that Yahoo Messenger and MSN Messenger would become interoperable.
Yahoo continued acquiring companies to expand its range of services, particularly Web 2.0 services. Yahoo Launchcast became Yahoo Music on February 9, 2005. On March 20, 2005, Yahoo purchased photo sharing service Flickr.[24] On March 29, 2005, the company launched its blogging and social networking service Yahoo 360°. In June 2005, Yahoo acquired blo.gs, a service based on RSS feed aggregation. Yahoo then bought online social event calendar Upcoming.org on October 4, 2005. Yahoo acquired social bookmark site del.icio.us on December 9, 2005 and then playlist sharing community webjay on January 9, 2006.
On August 27, 2007, Yahoo released a new version of Yahoo Mail that makes it possible for users to send instant messages to the largest combined instant messaging (IM) community including users of Yahoo Messenger and Windows Live Messenger, to send free text messages to mobile phones in the U.S., Canada, India and the Philippines.[25]
On January 22, 2008, it was reported that Yahoo was planning to lay off hundreds of employees out of its work force of about 14,000. The company has suffered severely in its inability to effectively compete with industry search leader Google.[26]
On January 29, 2008, Yahoo announced that the company was laying off 1,000 employees. The cuts represent 7 percent of the company's workforce of 14,300. Employees are being invited to apply for an unknown number of new positions that are expected to open as the company expands areas that promise faster growth.[27]

Possible acquisition by Microsoft
Microsoft and Yahoo pursued merger discussions in 2005, 2006, and 2007, that were all ultimately unsuccessful. At the time, analysts were skeptical about the wisdom of a business combination.[28][29] On February 1, 2008, after its friendly takeover offer was rebuffed by Yahoo, Microsoft made an unsolicited takeover bid to buy Yahoo for US$44.6 billion dollars in cash and stock.[30][6] Days later, Yahoo considered alternatives to the merger with Microsoft, including a merger with internet giant Google[31]or a potential transaction with News Corp [32]. However, on February 11, 2008, Yahoo decided to reject Microsoft's offer as "substantially undervaluing" Yahoo's brand, audience, investments, and growth prospects.[7] As of February 22, two Detroit based pension companies have sued Yahoo! and their board of directors for breaching their duty to shareholders by opposing Microsoft's takeover bid and pursuing "value destructive" third-party deals.[33]. In early March, Google CEO Eric Schmidt went on record saying that he was concerned that a potential Microsoft-Yahoo merger might hurt the Internet by compromising its openness.[34]

Products and services
Main article: List of Yahoo-owned sites and services
Yahoo provides a wide array of internet services that cater to most online activities. It operates the web portal http://www.yahoo.com which provides contents including the latest news, Yahoo Finance gives users quick access to other Yahoo services like Yahoo! Mail, Yahoo! Maps, Yahoo! Groups and Yahoo! Messenger. The majority of the product offerings are available globally in more than 20 languages.

Search
Yahoo offers diversified services; it provides vertical search services such as Yahoo! Image, Yahoo! Video, Yahoo! Local, Yahoo! News, and Yahoo! Shopping Search. As of August 2007, Yahoo is the second-most used search engine, after Google.[35] As of December 11, 2007, Google and the Microsoft search engine "store personal information for 18 months" and Yahoo and AOL (Time Warner) "retain search requests for 13 months".[36]

Communication
Yahoo provides internet communication services such as Yahoo! Mail and Yahoo! Messenger, Yahoo! Mail is the largest e-mail service in the world with almost half the market share.[37] In March, 2007, Yahoo announced that their email service will offer unlimited storage beginning May 2007.[38]
Yahoo also offers social networking services and user-generated content in products such as My Web, Yahoo! Personals, Yahoo! 360°, Flickr and Yahoo! Buzz.
Yahoo! Photos was shut down on 20 September 2007 in favor of Flickr. On 16 October 2007, Yahoo announced that they will no longer provide support or perform bug fixes on Yahoo 360° as they intend to abandon it in early 2008 in favor of a "universal profile" that will be similar to their Mash experimental system.[39]

Content
Yahoo partners with hundreds of premier content providers in products such as Yahoo! Sports, Yahoo! Finance, Yahoo! Music, Yahoo! Movies, Yahoo! News, and Yahoo! Games to provide media contents and news. Yahoo also provides a personalization service, My Yahoo, which enables users to collect their favorite Yahoo features, content feeds, and information into a single page.
Yahoo has developed partnerships with different broadband providers such as AT&T (via BellSouth & SBC), Verizon Communications, Rogers Communications and British Telecom, offering a range of free and premium Yahoo content and services to subscribers.

Mobile
Yahoo Mobile includes services for on-the-go messaging, such as email, instant messaging, and moblogging; information, such as search and alerts; and fun and games, including ringtones, mobile games, and Yahoo Photos for camera phones.

oneSearch
Yahoo introduced its Internet search system, called oneSearch, developed for mobile phones on March 20, 2007. The company's officials stated that in distinction from ordinary Web searches, Yahoo's new service presents a list of actual information, which may include: news headlines, images from Yahoo's Flickr photos site, business listings, local weather and links to other sites. Instead of showing only, for example, popular movies or some critical reviews, oneSearch lists local theaters that at the moment are playing a certain movie, user ratings and news headlines regarding the movie. A zip code or city name is required for Yahoo oneSearch to start delivering local search results.
The results of a Web search are listed on a single page and are prioritized into categories. The list of results is based on calculations that Yahoo computers make on certain information the user is seeking.[40]
Yahoo has announced they also plan to adopt Novarra's mobile content transcoding service for the oneSearch platform.[41]

Commerce
Yahoo offers commerce services such as Yahoo Shopping, Yahoo! Autos, Yahoo! Real Estate and Yahoo Travel, which enables users to gather relevant information and make commercial transactions and purchases online.

Small business
Yahoo provides services such as Yahoo! Domains, Yahoo! Web Hosting, Yahoo! Merchant Solutions, Yahoo! Business Email, and Yahoo! Store to small business owners and professionals allowing them to build their own online stores using Yahoo's tools.
Yahoo also offers HotJobs to help recruiters find the talent they seek.

Advertising
Yahoo! Search Marketing provides services such as Sponsored Search, Local Advertising, and Product/Travel/Directory Submit that let different businesses advertise their products and services on the Yahoo network. Yahoo! Publisher Network is an advertising tool for online publishers to place advertisements relevant to their content to monetize their websites.[42]
Yahoo launched its new Internet advertisement sales system on February 5, 2007 called Panama. It allows advertisers to bid for search terms based on their popularity to display their ads on search results pages. The system takes bids, ad quality, click-through rates and other factors into consideration in determining how ads are ranked on search results pages. Through Panama, Yahoo aims to provide more relevant search results to users, a better overall experience, as well as increase monetization -- to earn more from the ads it shows.[43]

Yahoo Next
Yahoo Next is an incubation ground for future Yahoo technologies currently in their beta testing phase. It contains forums for Yahoo users to give feedback to assist in the development of these future Yahoo technologies.

Revenue model
About 88% of total revenues for the fiscal year 2006 came from marketing services. The largest segment of it comes from search advertising, where advertisers bid for search terms to display their ads on the search results, on average Yahoo makes 2.5 cents to 3 cents from each search. With the new search advertising system "Panama" Yahoo aims to increase revenue generated from search.[44]
Other forms of advertising which bring in revenue for Yahoo include display and contextual advertising.
Working with comScore the The New York Times found that Yahoo! is able to collect far more data about Web users than its competitors from its Web sites and its advertising network. By one measure, on average Yahoo! had the potential in December 2007 to build a profile of 2,500 records per month about each of its visitors.[45]
Yahoo International

It has been suggested that Yahoo!Xtra be merged into this article or section. (Discuss)
Yahoo is known across the world with its multi-lingual interface. The site is available in over 20 languages, including English. International Yahoo! sites include Y! Austria, Y! Brazil, Y! Catalan, Y! China, Y! Denmark, Y! Finland, Y! France, Y! Germany, Y! Greece, Y! Hong Kong, Y! Indonesia, Y! Italy, Y! Japan, Y! Korea, Y! Malaysia, Y! Mexico, Y! Netherlands, Y! Norway, Y! Philippines, Y! Quebec, Y! Russia, Y! Singapore, Y! Spain, Y! Sweden, Y! Switzerland, Y! Taiwan, Y! Thailand, Y! Vietnam. Other English language sites include Y! Canada, Y! Australia (Yahoo!7), Y! New Zealand (Yahoo!Xtra), Y! UK & IE, and Y! India.
Each of the international sites are wholly-owned by Yahoo!, with the exception of Yahoo! Japan, in which it holds a 33% minority stake. Historically, Yahoo! entered into joint venture agreements with Softbank for the major European sites (UK, France, Germany) and well as Korea and Japan. In November 2005, Yahoo! purchased the minority interests that Softbank owned in Europe and Korea.

Criticism and controversy

Yahoo paid inclusion controversy
In March 2004, Yahoo launched a paid inclusion program whereby commercial websites are guaranteed listings on the Yahoo search engine after payment.[47] This scheme is lucrative, but has proved unpopular both with website marketers (who are reluctant to pay), and the public (who are unhappy about the paid-for listings being indistinguishable from other search results).[48] As of October 2006, Paid Inclusion doesn't guarantee any commercial listing, it only helps the paid inclusion customers, by crawling their site more often and by providing some statistics on the searches that led to the page and some additional smart links (provided by customers as feeds) below the actual url.

Adware and Spyware
Yahoo has also been criticized for funding spyware and adware — advertising from Yahoo's clients often appears on-screen in pop-ups generated from adware that a user may have installed on their computer without realizing it by accepting online offers to download software to fix computer clocks or improve computer security, add browser enhancements, etc. The frequency of advertising pop-ups for spyware, generated from a partnership with advertising distributor Walnut Ventures, who had a direct partnership with Direct Revenue, could be increased or decreased based on Yahoo's immediate revenue needs, according to some former employees in Yahoo's sales department.[49][50]

Work in China
Yahoo, along with Google China, Microsoft, Cisco, AOL, Skype, Nortel and others, has cooperated with the Chinese government in implementing a system of internet censorship in mainland China.
Unlike Google or Microsoft, which keep confidential records of its users outside mainland China, Yahoo stated that the company will not protect the privacy and confidentiality of its Chinese customers from the authorities.[51]
Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders state that it is "ironic that companies whose existence depends on freedom of information and expression have taken on the role of censor."[52]
“
"While technologically and financially you [Yahoo] are giants, morally you are pygmies"[53]
”
—Tom Lantos, chairman of the House Foreign Affairs Committee (2007)

Chinese dissident imprisonment controversy
In April 2005, Shi Tao, a journalist working for a Chinese newspaper, was sentenced to 10 years in prison by the Changsha Intermediate People's Court of Hunan Province, China (First trial case no 29), for "providing state secrets to foreign entities". The "secret", as Shi Tao's family claimed, refers to a brief list of censorship orders he sent from a Yahoo Mail account to the Asia Democracy Forum before the anniversary of the Tiananmen Square Incident.[54]
The verdict stated Yahoo Holdings (Hong Kong) confirmed that an IP address, registered by a Hunan newspaper that Shi Tao worked for, accessed the mail account at a particular time. He had sent the message through an anonymous Yahoo account, but police had gone straight to his offices and picked him up. Reporters Without Borders (RSF) is concerned with the ease with which Mr. Shi had been caught. In February 2006, Yahoo General Counsel submitted a statement to the U.S. Congress in which Yahoo denies knowing the true nature of the case against Shi Tao.[55] In April 2006, Yahoo Holdings (Hong Kong) is under investigation by Hong Kong's Privacy Commissioner for Personal Data.
Criticism of Yahoo intensified when the court document stated the company aided Chinese authorities in the case of dissident Li Zhi. In December 2003 Li Zhi was sentenced to 8 years imprisonment for "inciting subversion".
On 2 June 2006, the union representing journalists in the UK and Ireland (NUJ) called on its 40,000 members to boycott all Yahoo Inc. products and services to protest the Internet company's reported actions in China.[56]
In July 2007, evidence surfaced detailing the warrant which the Chinese authorities sent to Yahoo officials, highlighting "State Secrets" as the charge against Shi Tao. The warrant requests "Email account registration information for huoyan1989@yahoo.com.cn, all login times, corresponding IP addresses, and relevant email content from February 22, 2004 to present."[57][58][59] Analyst reports and human rights organizations have said that this evidence directly contradicts Yahoo's testimony before the U.S. Congress in February 2006.[60]
Yahoo contends it must respect the laws of governments in jurisdictions where it is operating.
“
"It's complicated"[53]
”
—Michael Callaham, General Counsel, Yahoo, testifying before the House Foreign Affairs Committee (2007)[61]

Sued in US court for outing Chinese dissident
Wang Xiaoning is a Chinese dissident from Shenyang who was arrested by authorities of the People's Republic of China for publishing controversial material online.
In 2000 and 2001, Wang, who was an engineer by profession, posted electronic journals in a Yahoo group calling for democratic reform and an end to single-party rule. He was arrested in September 2002 after Yahoo assisted Chinese authorities by providing information. In September 2003, Wang was convicted of charges of "incitement to subvert state power" and sentenced to ten years in prison.[62]
On April 18, 2007, Xiaoning's wife Yu Ling sued Yahoo under human rights laws in federal court in San Francisco, California, United States.[63] Wang Xiaoning is named as a plaintiff in the Yahoo suit, which was filed with help from the World Organization for Human Rights USA. "Yahoo is guilty of 'an act of corporate irresponsibility,' said Morton Sklar, executive director of the group. 'Yahoo had reason to know that if they provided China with identification information that those individuals would be arrested."[64]
Yahoo's decision to assist China's authoritarian government came as part of a policy of reconciling its services with the Chinese government's policies. This came after China blocked Yahoo services for a time. As reported in The Washington Post and many media sources:
The suit says that in 2001, Wang was using a Yahoo e-mail account to post anonymous writings to an Internet mailing list. The suit alleges that Yahoo, under pressure from the Chinese government, blocked that account. Wang set up a new account via Yahoo and began sending material again; the suit alleges that Yahoo gave the government information that allowed it to identify and arrest Wang in September 2002. The suit says prosecutors in the Chinese courts cited Yahoo's cooperation.[64]
Human rights organizations groups are basing their case on a 217-year-old U.S. law to punish corporations for human rights violations abroad, an effort the Bush administration has opposed:
In recent years, activists working with overseas plaintiffs have sued roughly two dozen businesses under the Alien Tort Claims Act, which the activists say grants jurisdiction to American courts over acts abroad that violate international norms. Written by the Founding Fathers in 1789 for a different purpose, the law was rarely invoked until the 1980s.[64]
On August 28, 2007, the World Organization for Human Rights sued Yahoo for allegedly passing information (email and IP address) with the Chinese government that caused the arrests of writers and dissidents. The suit was filed in San Francisco for journalists, Shi Tao, and Wang Xiaoning. Yahoo stated that it supported privacy and free expression for it worked with other technology companies to solve human rights concerns.[65]
On November 6, 2007, the US congressional panel criticised Yahoo for not giving full details to the House Foreign Affairs Committee the previous year, stating it had been "at best inexcusably negligent" and at worst "deceptive".[66]

Chatrooms and message boards
As a result of media scrutiny relating to Internet child predators and a lack of significant ad revenues, Yahoo's "user created" chatrooms were closed down in June 2005.[67] Yahoo News' message board section was closed on December 19, 2006 due to the trolling phenomenon.[68]

Image search
On May 25, 2006, Yahoo's image search was criticized for bringing up sexually explicit images even when SafeSearch was on. This was discovered by a teacher who was intending to use the service with a class to search for "www". Yahoo's response to this was, "Yahoo is aware of this issue and is working to resolve it as quickly as possible".[69]

Shark finning controversy
Yahoo is a 40% owner of Alibaba, which facilitates the sale of shark-derived products.[70] After investing in Alibaba, Yahoo execs were asked about this issue, and responded: "We know the sale of shark products is both legal in Asia and a centuries-old tradition. This issue is largely a cultural-practices one."[71] However, the "cultural" claim (which is pushed by the trade)[72] has been contested.[73