Yahoo Loses Core Business to Verizon for Almost US$5 Billion

image credit: gaku via wikimedia commons

image credit: gaku via wikimedia commons

When Yahoo started back in the early 90’s, it was touted as the leading tech company of the decade. Started by Jerry Yang and David Filo, they initially named the search engine “Jerry’s Guide to the World Wide Web.” It was later changed in 1995 to Yahoo which stood for “Yet Another Hierarchical Officious Oracle” which was basically a directory showing a list of websites in hierarchy.

“Yahoo!” as it was spelled out, slowly emerged as the most popular website of its time as it was able to harvest online content and present them in their home page. It was similar to what media websites do now. Acting as a search engine and media portal, Yahoo was able to expand its operations and online presence. One of the biggest services of Yahoo was in providing free email to internet users. This was at a time when Google was just a bland search engine and offered a lackluster email service.

Yahoo’s Legacy

Yahoo once dominated the internet industry by having a long list of services and tools. Today, they are called “legacy” applications as they are about to be shut down or have long been in the dust bin (aka no longer used). Some of these include:

  • HotJobs
  • RocketMail
  • Geocities
  • Yahoo Widgets
  • Flickr
  • Tumblr
  • Y! Messenger


The first four have long been discontinued while the remaining three are still being used actively by its users. Flickr and Tumblr are two of the more active services while Y! Messenger, one of the more popular messaging apps before WhatsApp, Viber and Google Hangouts, have been declining in number of users. It has been revamped recently but is at risk of getting shut down as well.

image credit: Marc Smith via wikimedia commons

image credit: Marc Smith via wikimedia commons

Bound to Sink

When Google rose to prominence, Yahoo’s popularity started to slide down fast. Several CEOs were coming and going in the company’s revolving doors. The bravest and the last, is former Google executive turned Yahoo CEO, Marissa Mayer. She is one of the few female top shots in Silicon Valley, an industry dominated by men. She was seen as a competent leader who could turn around the fate of Yahoo.

Mayer agreed to lead the company to the tune of US$200 million. She was also entitled to a severance package of US$150 million. With a fat compensation and astounding benefits, Mayer had to change things fast. She revamped the content of the Yahoo website to gain more appeal from younger generations and bought Tumblr at the price of US$1.1 billion. Internally, Mayer pushed for improving the morale of the employees which even included free lunches.

But despite these efforts, she still failed to change things. Today, the core business is now being purchased by Verizon for a meager US$ 4.83 billion, one-fifth of what Microsoft once offered to Yahoo in 2008 in purchasing the search engine.

image credit: geralt via

image credit: geralt via

Identity Crisis

Some tech experts hypothesized that the demise of Yahoo was in its failure to establish its own identity. Yahoo was unclear if it was a media company or a tech company. Not being able to define its own role in the internet gave Google the advantage to present itself as a strong tech company. Yahoo on the other hand meddled in producing original content while attempting to create apps that would catch up with the changing times.  

Perhaps it’s only saving grace are the intact shares it has with Alibaba, when it decided to invest in the company back when it was still new. There are claims that Mayer wanted to protect these investments which are of higher value than Yahoo’s core business itself.
Yahoo will soon be a part of Verizon, as a part of the latter company’s acquisitions alongside AOL, Huffington Post, and TechCrunch.