Speaker 1: Brought to you by the reinvented two thousand twelve camera.
Speaker 1: It's ready. Are you get in touch with technology? With
Speaker 1: tech stuff from how stuff works dot com. Well, hello there,
Speaker 1: I almost didn't see you. Welcome to tech stuff. My
Speaker 1: name is Chris Polattin. I'm an editor at how stuff
Speaker 1: works dot com. Sitting across me, as usual, is senior
Speaker 1: writer Jonathan Strickland. Hey, they nice. You're gonna get sued
Speaker 1: for that. No, that's just the tune. They can't get me.
Speaker 1: I'm untouchable. Okay, all right, well you know, don't take
Speaker 1: that as a challenge. Backtracking already. So today we're going
Speaker 1: to talk about a It's interesting. We're gonna talk about
Speaker 1: a company that, as Chris was saying before we start
Speaker 1: recording a few months ago, we might call this like
Speaker 1: a eulogy for a company that is on its way
Speaker 1: to to crumbling to pieces. But now there's actually a
Speaker 1: new hope. I'm wearing my Star Wars lego shirt and
Speaker 1: I think that's where he got that fight. Um. So, yeah,
Speaker 1: this is something that people have brought up on a
Speaker 1: couple of occasions, and I don't know, we never really
Speaker 1: talked about it. I think maybe we haven't talked about
Speaker 1: it yet simply because it was kind of sad. Yeah,
Speaker 1: it's the story of Yahoo and and what it is,
Speaker 1: how it became what it is, and it's it's rocky,
Speaker 1: rocky past because this is one of those companies where
Speaker 1: you know, there was a meteoric rise in this company
Speaker 1: and then a decline and then a sharper decline and
Speaker 1: then and an era that was marked with lots of
Speaker 1: of unpredictable change and uncertainty and now wait what Yeah,
Speaker 1: and then in two thousand twelve, Uh, just as things
Speaker 1: were really looking pretty grim, there's now a little optimism
Speaker 1: at least about the possibility that this company could find
Speaker 1: it's it's footing again. And it it helps if we
Speaker 1: actually just start at the very beginning and just kind
Speaker 1: of work our way to present day. I think, yeah, yeah,
Speaker 1: and uh, like with many of our tech stories, and
Speaker 1: that's been people and companies. Um, there are these parallels,
Speaker 1: these weird uncanny parallels that pop up. So not just parallels,
Speaker 1: but relationships as well. Yeah, it's funny because on a
Speaker 1: podcast where we were talking about a couple other guys
Speaker 1: in this similar role, We're gonna start this story with
Speaker 1: two guys who met at Stanford University in California and
Speaker 1: started a major web property. Yeah, but not that one.
Speaker 1: Another one. So one of those is David Filo and
Speaker 1: the other was Jerry Young And uh, I really like
Speaker 1: the websites original name. Oh, yes it was. It was
Speaker 1: what was it, Jerry and David's Guide to the world
Speaker 1: Wide Web. Yes, that's a that's pretty pretty snappy. Yeah, well,
Speaker 1: they certain they wouldn't have been able to fit it
Speaker 1: in that jingle that you were just so accurately singing. Yeah,
Speaker 1: that would have been very different. I was so off,
Speaker 1: I don't think I even hit a single note. Thank
Speaker 1: you anyway. So, yes, Young and Violo at the time,
Speaker 1: we're both in the PhD program at Stanford University Electrical Engineering.
Speaker 1: That's correct, and uh, and they decided to start a
Speaker 1: personal project. They were both interested in the Worldwide Web,
Speaker 1: which was still very very young. Yes, you know, they
Speaker 1: got to remember that the Web, in fact was maybe
Speaker 1: what like two years old more or less. There wasn't
Speaker 1: much of the web then, because the Web and the
Speaker 1: Internet are, of course, are two different things. The Web
Speaker 1: is built on top of the Internet, so the web
Speaker 1: is just one way that we access the Internet and
Speaker 1: use the Internet well. So a ninety four there were
Speaker 1: some interesting websites that were around, and most of them
Speaker 1: were generated by either research facilities or students who were
Speaker 1: really interested in this new platform. There were a few
Speaker 1: companies that were kind of dipping their toe in the
Speaker 1: world Wide Web, but very few at this time. This
Speaker 1: was the era where companies. If you you walked into
Speaker 1: the corporate headquarters of some major company and said, why
Speaker 1: don't you start a site on the Worldwide Web, you'll
Speaker 1: be one of the first, and they would go, first,
Speaker 1: what are you talking about? Second, why would we why
Speaker 1: would do that? Yeah? Why will we ever spend the
Speaker 1: time and effort to do that? What would we do there?
Speaker 1: Because you know, internet commerce didn't exist yet on at
Speaker 1: least as far as the Worldwide Web entity. Uh, but
Speaker 1: you started to see some stuff like the BBS culture,
Speaker 1: the bulletin board system culture can seep in and and
Speaker 1: usenet culture as well. So this idea of groups of
Speaker 1: people who had similar interests forming communities online and building
Speaker 1: websites or at least a web page that represents that
Speaker 1: kind of interest, and Young and Filo both found lots
Speaker 1: of websites really in interesting, and then they started to
Speaker 1: kind of curate this for themselves. Originally it was just
Speaker 1: for them, just for the two of them. Really, they
Speaker 1: were kind of creating these these categories of websites that
Speaker 1: they thought were interesting. And as the web grew, as
Speaker 1: more people began to add content to the web, these
Speaker 1: categories got larger and larger, so they started to break
Speaker 1: them into subcategories so that they could easily find content
Speaker 1: that related to specific interests. And then they realized that
Speaker 1: their friends also thought this was a really useful tool,
Speaker 1: so they began to roll this out as more of
Speaker 1: a service. An idea of the web is this potentially
Speaker 1: limitless frontier, which means that all the content you could
Speaker 1: ever want could exist there, but finding it is going
Speaker 1: to be tough. Yahoo, which is ultimately the name that
Speaker 1: they settled on, would be a service that would allow
Speaker 1: you to find content it that's relevant to your interests
Speaker 1: and so that you don't have to just you know,
Speaker 1: jump out into the World Wide Web and wander around
Speaker 1: aimlessly hoping that you find stuff that's relevant to you. Well, again,
Speaker 1: this was you know, the search engines as we know
Speaker 1: them now didn't exist at that point, so this was
Speaker 1: This was one of those things where it just I
Speaker 1: think it just sort of seemed obvious to them that
Speaker 1: it was an opportunity. Um, so they dropped out of school,
Speaker 1: which is important to remember. Don't drop out of your
Speaker 1: PhD program kids, right, So unless unless you're going to
Speaker 1: become a multibillionaire. Well they did, they did take a
Speaker 1: two million dollar investment. Well, and and they started thinking.
Speaker 1: They came up with the name Yahoo, which is technically
Speaker 1: an acronym, is it? Yes? Do you know what it
Speaker 1: stands for? Yet another hierarchical, officious oracle. Interesting that's according
Speaker 1: to the Yahoo website, by the way, because I would
Speaker 1: not have I would not have believed it had I
Speaker 1: not seen it on Yahoo itself. Okay, well that's that's
Speaker 1: funny because I read that they were really excited about
Speaker 1: its definition. Yes, this is also true. They they I
Speaker 1: think the acronym was kind of a retroactive sort of thing.
Speaker 1: They liked the word Yahoo in the sense of the
Speaker 1: definition of it being kind of an uncouth or rude
Speaker 1: type of person, as in, as in the phrase get
Speaker 1: a load of this Yahoo? Yeah serious? Yeah, well I
Speaker 1: mean these yeah, these are these guys were sort of informal, Well,
Speaker 1: I mean it was the birth of the web, was
Speaker 1: the birth of the web culture. And you know, those
Speaker 1: early days of the web people often were these guys.
Speaker 1: They often equate the early days they being people in
Speaker 1: general so vague. Some people referred to those early days
Speaker 1: of the webs like the the the digital equivalent of
Speaker 1: the wild West, like anything goes and no rules were
Speaker 1: defined yet, so anything was it was possible. Well, if
Speaker 1: I'm not mistaken, weren't weren't there titles the chief? Yeah, yes,
Speaker 1: and uh. And in ninety four they also before they
Speaker 1: before the company had really become a company, it existed
Speaker 1: essentially on their own personal machines. Young had his His
Speaker 1: was named Akabono and Filos was called Konnashiki, and both
Speaker 1: of these were named after sumo wrestlers. Of course, none
Speaker 1: of that is a joke, that is all true. This
Speaker 1: is again informing you behind of the the personalities behind
Speaker 1: Yahoo and what sort of of thing. Yahoo started off
Speaker 1: as being versus what it would become, because it had
Speaker 1: a very interesting evolution. It started off as this very
Speaker 1: quirky approach to curating information that's on the web, and
Speaker 1: I think that had a lot of appeal among people
Speaker 1: of around around the same age as young and flo
Speaker 1: and younger really the which age of people that we
Speaker 1: think of as being really Internet savvy and passionate about
Speaker 1: the Internet at the time. Back in the early nineties.
Speaker 1: Um so they start pushing Yahoo and by the fall
Speaker 1: of ninety four, this is not even a full year, right,
Speaker 1: they started in ninety four. By the fall of ninety four,
Speaker 1: Yahoo had had the word of Yahoo had spread beyond Stanford,
Speaker 1: and it had become something of a go to site
Speaker 1: for lots of people. And in the fall of ninety
Speaker 1: four they had their first million hit day. So yeah,
Speaker 1: less than a year old, in the early days of
Speaker 1: the web when most people don't even know what the
Speaker 1: web is, it had its first day to hit over
Speaker 1: a million hits. Uh. That actually boils down to about
Speaker 1: a hundred thousand unique visitors. So that meant that people
Speaker 1: would go to Yahoo multiple times in a day. So
Speaker 1: you know, a unique visitor is one person, that's that's who,
Speaker 1: that's a unique visitor, right, But a unique visitor can
Speaker 1: generate multiple hits by visiting the page several times. Uh.
Speaker 1: So that's the difference between those two. So a hundred
Speaker 1: thousand people, essentially generating a million hits on Yahoo within
Speaker 1: the first year of it being a thing. And in
Speaker 1: in March, Uh, yeah, who made the step of incorporation
Speaker 1: so it became an official company. That's when Young and
Speaker 1: Filo decided to uh skidaddle from the world of academy.
Speaker 1: And they also hired someone to be the CEO. Yes,
Speaker 1: because Young and Filo we're not business guys. These guys
Speaker 1: were electrical engineer students. So they they said, you know,
Speaker 1: we need to get someone who knows the business side
Speaker 1: of running a corporation. We can handle technical stuff like crazy,
Speaker 1: but you know, when it comes down to actually business decisions,
Speaker 1: we should get someone who really knows what they're doing.
Speaker 1: And so they hired a guy named Tim Coogle. And
Speaker 1: uh he was someone who came from Motorola. He had
Speaker 1: worked at Motorole. He was also a graduate of Stanford.
Speaker 1: That will not be the last time we've heard the
Speaker 1: name of that academic institution before the end of this podcast.
Speaker 1: And uh and, like Chris said, they did also secure
Speaker 1: two million dollars in funding from Sequoia Capital, which, um
Speaker 1: seems small by today's standards, but you know that was
Speaker 1: it was a new thing, and the web was a
Speaker 1: young entity, and uh it was enough to get them going.
Speaker 1: They actually got a second round of funding in the
Speaker 1: fall of m and also they hired a guy named
Speaker 1: Jeffrey Mallett to be the chief operating officer. And Mallett
Speaker 1: came from Novelle. He was actually out of their consumer
Speaker 1: division for a little product called word Perfect. I feel
Speaker 1: like I've heard of that somewhere, man, Okay, short tangent,
Speaker 1: just a short tangent people. Word Perfect is to this
Speaker 1: day my favorite word processing program I've ever used. Specifically,
Speaker 1: weren't well, We're Perfect five point one was great. We're
Speaker 1: Perfect four point two is what I cut my teeth on.
Speaker 1: As far as word processing goes. It's sad to say
Speaker 1: that I still can remember the the keyboard shortcuts to
Speaker 1: do things like bold and underline spell check, and I
Speaker 1: have to stop myself from doing them whenever I'm using
Speaker 1: word although I guess technically I think there is a
Speaker 1: way I can set it so that those old key
Speaker 1: strokes are the same. You know, you can actually do
Speaker 1: that with some versions of words. Anyway, I don't dare
Speaker 1: do that for fear of becoming too dependent upon it. Anyway,
Speaker 1: tangent over. So yeah, that that following they get their
Speaker 1: second round of funding, things are looking pretty good for
Speaker 1: this young startup. I mean again, it's starting nine looking
Speaker 1: up UH and in ninety six. I mean, this is
Speaker 1: lightning fast really when you compare it to some of
Speaker 1: the other UH tech companies that are out there, like
Speaker 1: let's say Facebook, for example, April, they launched their I
Speaker 1: p O initial public offering. At that time, they had
Speaker 1: forty nine employees and when they launched the I p O,
Speaker 1: the stock price was valued at thirteen dollars a share. Now,
Speaker 1: Yahoo stock has had probably one of the most dramatic
Speaker 1: histories I've seen for a company that managed to survive
Speaker 1: some massive, massive problems. So remember this company launches well
Speaker 1: before the dot com bubble burst, because that that happened
Speaker 1: in two thousand one. Well, I would say that Yahoo's
Speaker 1: meteoric rise probably was part of what built the the
Speaker 1: tech bubble in the first place. It definitely helps itself.
Speaker 1: It definitely helped precipitate the bubble bursting because the valuation
Speaker 1: of Yahoo got out of hand. At its highest from
Speaker 1: what I can tell, on January third, two thousand, stock
Speaker 1: was valued Remember it launched at thirteen dollars a share.
Speaker 1: On January third, two thousand, it was valued at a
Speaker 1: hundred eighteen dollars seventy five cents a share. Yeah, and
Speaker 1: keep in mind also that yah Yahoo stock, I think
Speaker 1: a split five times, so that also is something to
Speaker 1: keep in mind. But then the lowest it was valued
Speaker 1: came just a year later in two thousand one. So
Speaker 1: in two thousand at its highest one dollars seventy five
Speaker 1: cents a share, at it's lowest four dollars five cents
Speaker 1: in two thousand one. That's obviously after the bubble burst,
Speaker 1: the dot com bubble burst, and this company that was
Speaker 1: worth a huge amount of money saw that value escape
Speaker 1: in just a few months time. Uh. Currently, as of
Speaker 1: the recording of this podcast, which is in mid August,
Speaker 1: it's valued at fourteen dollars cents per share, so over
Speaker 1: what its initial public offering was, but nowhere close to
Speaker 1: its peak post splits post splits. Yeah, you have to
Speaker 1: figure that into but a hundred dollars less than at
Speaker 1: its peak is a big deal. But they were definitely
Speaker 1: Jerry and David were definitely onto something because within two
Speaker 1: years of their you know, being engineering students, all of
Speaker 1: a sudden, they were multimillionaires, which is pretty cool. Yeah,
Speaker 1: you gotta you know, getting back to the mid nineties
Speaker 1: when this I p O goes out, Yeah, they were
Speaker 1: they were definitely riding high. I mean, their their company
Speaker 1: was a success, and they continued to build on it.
Speaker 1: They weren't you know, just curating content. They started to
Speaker 1: add more services. Um, they created the Yahoo dot com
Speaker 1: personalized home page approach, the my Yahoo Yeah approach. So
Speaker 1: they sort of became one of the earliest portals because
Speaker 1: you'd get your news and your weather where you were
Speaker 1: very good. Yeah, a portal being like, you know, your
Speaker 1: your snapshot view of what is going on on the
Speaker 1: web and in the world on any given day, so
Speaker 1: go ahead, portal, you know, like a door. So it
Speaker 1: was your door to the internet. Yeah, and this is
Speaker 1: very similar to what companies had been doing for a
Speaker 1: while the uh you know, we talked about it in
Speaker 1: our other podcasts, things like A O L when A
Speaker 1: O L was doing so you would get your connection
Speaker 1: to the internet through a O L and a O
Speaker 1: L would create this portal that was kind of again
Speaker 1: a snapshot, as a O L saw it, of what
Speaker 1: was going on in the Web and in the world,
Speaker 1: and that was your initial introduction to the Internet on
Speaker 1: any given day, and then you could explore on your
Speaker 1: own as much as you liked. But this was sort
Speaker 1: of a starting point. Well, that's the same thing Yahoo
Speaker 1: was doing, and it was seeing a lot of early
Speaker 1: success with that. Yeah, the biggest the biggest difference here
Speaker 1: was that a O L was still proprietary in its
Speaker 1: own network and not hooked up to the Internet, while
Speaker 1: Yahoo was on the Internet itself. Yeah, it was. It
Speaker 1: was browser based as opposed to computer based. Yes. And
Speaker 1: then also they started to introduce something that would become
Speaker 1: incredibly influential on the web, one of the most uh
Speaker 1: influential acts ever, I would say, which is that they
Speaker 1: really were pioneers with web advertising. They became a platform
Speaker 1: for web ads, and this is kind of the foundation
Speaker 1: for the way many companies make money using the web.
Speaker 1: And there there there are several different ways to generate
Speaker 1: revenue on the Web, and some of it is involving
Speaker 1: like commerce, you know, essentially using the as sort of
Speaker 1: a catalog, the way you could argue Amazon does. Amazon
Speaker 1: also offers a lot of services that you can subscribe
Speaker 1: to either as a customer or as a corporate customer. Uh,
Speaker 1: they generate revenue that way as well, so they it's
Speaker 1: not just through being sort of a retail or catalog
Speaker 1: kind of approach. But web advertising is is a major
Speaker 1: way that companies make money on the Internet. And Yahoo
Speaker 1: was again the really the pioneer in those early days
Speaker 1: of defining what web advertising is. In fact, y'all who
Speaker 1: would even eventually do studies that would help show a
Speaker 1: connection between web advertising and real world effects, so in
Speaker 1: other words, showing that web advertising can have an effect
Speaker 1: in guiding someone's consumer choices. Well, they were very effective
Speaker 1: at creating content that would get people to the website.
Speaker 1: And it makes sense that, you know, you would be
Speaker 1: able to go up to a company who might want
Speaker 1: to advertise and say, look, I I know for a
Speaker 1: fact I'm going to have people on this page because
Speaker 1: I get fifty people to visit this page every day,
Speaker 1: and now you can advertise if you want to pay
Speaker 1: you one access to at max then uh yeah, and
Speaker 1: and and that was a powerful story to say, look,
Speaker 1: we have the we can tell you how many people
Speaker 1: looked at this, and if your ad is on this page,
Speaker 1: people will see it, whereas if you put an ad
Speaker 1: in a magazine or on a billboard. You don't know
Speaker 1: if people, if their eyes ever even glanced across it,
Speaker 1: but we could tell you if they saw it or not,
Speaker 1: because we know if they came to the page. It's
Speaker 1: a pretty powerful story. Not everyone bought into it immediately, No,
Speaker 1: it actually took some time to really get traction. But
Speaker 1: once once, there were some early success stories. That was
Speaker 1: that the right was on the wall, that web advertising
Speaker 1: was going to be the future for generating revenue on
Speaker 1: the web. Well, within three years, the total market value
Speaker 1: of the company was more than a hundred billion dollars,
Speaker 1: So it made some waves. So so one year before
Speaker 1: that they went ahead and established Internet guides in Chinese
Speaker 1: and in Spanish. So it becomes a global entity. And
Speaker 1: in fact, we're going to have some interesting discussion about
Speaker 1: China and a little bit uh. In ninety nine, like
Speaker 1: like Chris was saying, the valuation of the company was
Speaker 1: over a hundred billion. That was also the year that
Speaker 1: Yahoo made two major acquisitions. I think we both of
Speaker 1: these were in our podcast about some of the bad
Speaker 1: deals that have happened. One of them was Geo Cities,
Speaker 1: which seemed like a brilliant idea at the time, because
Speaker 1: that's where a lot of people had built home pages,
Speaker 1: and that was kind of the early days of when
Speaker 1: people would create a digital presence on the web. This
Speaker 1: is before blogging, it's before and anything like tumbler or
Speaker 1: social networks. So at the time, that was kind of
Speaker 1: how people thought, Oh, well, if I want to create
Speaker 1: something that's about me, I have to have a website.
Speaker 1: Nowadays that's not the case. People use other platforms and
Speaker 1: then they you know, talk about themselves at length. That way,
Speaker 1: if you want to hear about me, follow me at
Speaker 1: John Strickland Twitter. There you go, um, because I'll talk
Speaker 1: about myself all day long. They also bought another company,
Speaker 1: and this was probably I think this was this topped
Speaker 1: our list of bad deals, which was Broadcast dot Com. Now,
Speaker 1: Yahoo has a history of looking at ways of marrying
Speaker 1: other form of media with the web or getting into
Speaker 1: businesses that are beyond just curating content for the web
Speaker 1: or even generating content, and that included Broadcast dot Com.
Speaker 1: H Now, this acquisition did do something, uh, it made
Speaker 1: Mark Cuban a billionaire. Say it affected the sports the
Speaker 1: sports world substantially because it gave Mark Cuban enough money
Speaker 1: to buy teams and give himself fine for it. It
Speaker 1: gave money to a real Maverick and then a lot
Speaker 1: of other matricks to um yeah, the the but but Broadcast,
Speaker 1: you know y'all, who ultimately was not really able to
Speaker 1: do much with broadcast. It did absorb some of the
Speaker 1: technology that broadcasts had developed into other parts of Yahoo,
Speaker 1: but broadcast dot Com itself and the identity it had
Speaker 1: created ceased to be before much longer and it A
Speaker 1: lot of people cite the Yahoo Broadcast deal as one
Speaker 1: of the most short sighted, unwise deals, especially when you
Speaker 1: look at how many users were uh subscribed essentially to
Speaker 1: broadcast dot Com, because it was one of those deals
Speaker 1: where the amount of money paid per user was astronomical,
Speaker 1: like it would have been cheaper to just go to
Speaker 1: every single person who had ever visited broadcast dot com
Speaker 1: and give him a check for a thousand dollars. That
Speaker 1: would have been less expensive than buying broadcast for what
Speaker 1: they did U. So yeah, that ninety nine definitely had
Speaker 1: a couple of questionable acquisitions in it, although again, really
Speaker 1: we have the benefit of hindsight at the time there
Speaker 1: was it don't seem quite so silly. Yeah. Again, this
Speaker 1: is when the bubble still inflating, right, The bubble was
Speaker 1: not burst yet. People just thought that the web was
Speaker 1: limitless as far as not just not just for content,
Speaker 1: but for the possibility of making money, and that you know,
Speaker 1: no one really knew where the web was going, but
Speaker 1: everyone was really excited. So in hindsight we could say like, whoops,
Speaker 1: bad idea, but at the time no way of knowing. Well, yeah,
Speaker 1: who actually sort of gave rise to another similar but
Speaker 1: not exactly the same type of website. Wow. Yeah, so
Speaker 1: you're talking about something a meeting that happened in two thousand,
Speaker 1: aren't you. Well, yes, but I was kind of going
Speaker 1: to preface that meeting by saying, um, people would visit
Speaker 1: Yahoo to find other websites. As a matter of fact,
Speaker 1: for a while, they had a print magazine Yahoo Internet Life.
Speaker 1: I remember it. You used to be able to see
Speaker 1: it on the news stand. Um. You know, my as
Speaker 1: my father got into, uh getting online. He was a subscriber,
Speaker 1: so he could find websites, um and uh, and that
Speaker 1: was that was kind of interesting. One of the nice
Speaker 1: things about doing things the way Yahoo did was it
Speaker 1: was done primarily by hand. I mean, people would actually
Speaker 1: go online see what something was about, maybe give it
Speaker 1: a little right up, Hey, visited this website. It's kind
Speaker 1: of neat. You can do this and that and the
Speaker 1: other thing on it. Uh, but you know that doing
Speaker 1: that my hand is time consuming. And this is when
Speaker 1: we started talking about the search engine UM, which would
Speaker 1: use primarily software. There were lots of them around that time,
Speaker 1: like Alta, Vista and hot Bot and UM. Another site
Speaker 1: started by two guys who met at Stanford University. Side
Speaker 1: that rhymes was Schmoogle, yes or or Google or Google. Yeah,
Speaker 1: that wasn't lost on me either. So yeah, Page and
Speaker 1: Brenn Larry Page and Sir Gay brend Um. So they
Speaker 1: started after y'all who did. They started after y'all who did,
Speaker 1: And they took a different approach y'all who was all
Speaker 1: about curating data, yes, curating websites and kind of categorizing stuff.
Speaker 1: Google was a different sort of search engine where it was,
Speaker 1: you know, you told Google what it was you were
Speaker 1: looking for, It crawled the web and gave you the
Speaker 1: results that um that, according to its algorithm, were the
Speaker 1: most relevant to your search. And there wasn't really human
Speaker 1: curation going on. It would just tell you whether or
Speaker 1: not what you were you found was relevant to what
Speaker 1: you looked for, right, and Paige and brend had approached
Speaker 1: Yahoo for with a request for some cash infusions early
Speaker 1: on in the days of Google. That was one of
Speaker 1: the different companies that they approached to try and get
Speaker 1: a little bit of support when they were doing their
Speaker 1: earlier work. And in two thousand, Yahoo made an interesting decision.
Speaker 1: They decided to they they they saw the power of
Speaker 1: Google's search algorithm, you know, and and they admired it.
Speaker 1: And so Yahoo paid a licensing fee to Google for
Speaker 1: an agreement, a deal that would last four years that
Speaker 1: would allow Yahoo to use Google's search algorithm on Yahoo's site.
Speaker 1: So beyond just curating content for people by people, they
Speaker 1: would also use Google search algorithm to search the web
Speaker 1: for other content that wasn't necessarily something that a human
Speaker 1: being had curated for you. And it was a in
Speaker 1: hindsight kind of a brilliant decision in a way, because
Speaker 1: it gave them the hour of Google's search and that
Speaker 1: augmented their human curate curated content and theoretically would bring
Speaker 1: more people to Yahoo. The only problem was that people
Speaker 1: started to realize that this Google powered search engine was
Speaker 1: exactly what they wanted, and some people began to just
Speaker 1: bypass Yahoo entirely go straight to Google. Google was such
Speaker 1: a different experience because y'ah, who again is a portal? Right,
Speaker 1: you know you've got this this Uh, busy is the
Speaker 1: wrong word, but elaborate web presentation has lots of different
Speaker 1: elements to it. Google. We're all familiar with Google's homepage.
Speaker 1: It is stripped down. It is just the bare necessities,
Speaker 1: not unattractive, but not cluttered in any anyway or or
Speaker 1: there's no extraneous information. There's a search bar, there's a logo,
Speaker 1: and there's just a little bit of text and that's it. Yeah,
Speaker 1: it's functional. So people would start to bypass Yahoo goes
Speaker 1: straight to Google and say, well, you know, I could
Speaker 1: just go here and find what I need. I remember
Speaker 1: these days, all right, I remember. I remember the days
Speaker 1: when I distinctly remember when I was part of a
Speaker 1: message board. Actually was the Snopes message board. I've been
Speaker 1: on Snopes forever. Uh, but I remember people on Snopes saying,
Speaker 1: you know what, this Google surge engine is so much
Speaker 1: faster and so much more comprehensive than anything else out there.
Speaker 1: That's what I use and that's what got me interested
Speaker 1: in using Google. And that's um, I mean, I very
Speaker 1: much agreed. And so, Yeah, whose decision to license this
Speaker 1: technology may also have hurt Yahoo in the long run
Speaker 1: because people began to discover Google when otherwise they may
Speaker 1: never have heard of it. And also it you know,
Speaker 1: who had sort of created a monster. Yeah, who had
Speaker 1: sort of you know, they've been a pioneer in the
Speaker 1: web advertising space. Google showed a fair amount of innovation
Speaker 1: in that space, uh, and would dominate it in such
Speaker 1: a way as to frighten everybody else for the rest
Speaker 1: of time. Yeah, I mean, it's phenomenal what Google did.
Speaker 1: Google looked at what Yah who was doing and said,
Speaker 1: let's apply the same logic we did with our algorithm
Speaker 1: for search and create a tool that's going to give
Speaker 1: people who want to advertise on the web way more
Speaker 1: information and control and and analytics and they've ever had before,
Speaker 1: and we're going to do it better than anyone else.
Speaker 1: And that's you know, they you can argue how successful
Speaker 1: they weren't accomplishing that goal, but they definitely saw results
Speaker 1: for one thing, just Google AdWords. They could tell you, hey,
Speaker 1: you know, we ran this ad, And we found out
Speaker 1: that if we ran the ad using this word as
Speaker 1: the trigger as opposed to this word as the trigger,
Speaker 1: we had a sevent increase in success. Like the like,
Speaker 1: how did you That's that's insane amount of control for
Speaker 1: an ad. You know, you've gotten down to the granular,
Speaker 1: granular level of control where you can scientifically engineer the
Speaker 1: most powerful AD possible using the material you have. That's
Speaker 1: that's a story. That's incredibly powerful. Anyway, So, yeah, who
Speaker 1: ends up giving this boost to Google because they licensed
Speaker 1: the technology that will end up hurting them in the
Speaker 1: long run. A smart move that turns out to be
Speaker 1: a dumb one as well. In two thousand one, that's
Speaker 1: when the that's when the bottom fell out. That's the
Speaker 1: bubble burst. That's when that stock price plummeted from its
Speaker 1: all time high to its all time below. I had
Speaker 1: forgotten too that before the bubble really had burst terribly
Speaker 1: that Yahoo really kind of had a chance to get eBay, yes,
Speaker 1: but didn't. Yes. Actually there's a lot of stories about yeah,
Speaker 1: who having a chance to do something but not doing it.
Speaker 1: They well that was when they didn't purchase eBay. Yeah, Yeah,
Speaker 1: there's gonna be some more didn't down the line. But
Speaker 1: there's also at that point, so the the valuation of
Speaker 1: the company went from over one billion to around ten billion.
Speaker 1: That's enough. Okay, that's still quite a bit of money. Yeah,
Speaker 1: but still is a huge drop. Shareholders not happy. Well,
Speaker 1: the companies that didn't survive the dot com crash, by
Speaker 1: and large had poor business models. They weren't They weren't
Speaker 1: really based in reality and Yahoo, I mean advertising is
Speaker 1: pretty well based in reality. You know, they weren't really suffering.
Speaker 1: They Yeah, that hurts losing it, you know, nine tenths
Speaker 1: of your value, But definitely it shook shareholder confidence severely,
Speaker 1: to the point where Cool ends up resigning. Yeah, and
Speaker 1: I mean that's not a big surprise. You're talking about
Speaker 1: such an incredible drop that it would have been amazing
Speaker 1: had the CEO not resigned and a new CEO steps in.
Speaker 1: Terry Simmel, who was came from a totally different world.
Speaker 1: He did not come from the world of the web
Speaker 1: or technology. He came from the world of Hollywood. Um.
Speaker 1: He was a co CEO, which you know, you don't
Speaker 1: hear that too frequently. There was a co CEO and
Speaker 1: chairman of a little little media company called Warner Brothers,
Speaker 1: but not the Warners sister not. Yeah, so he was
Speaker 1: a co CEO of Warner Brothers. He comes on as
Speaker 1: the new CEO for Yahoo. Uh you know who also
Speaker 1: acquires a company called hot Jobs. I remember that. Yeah,
Speaker 1: sort of a monster. Um yeah, as an online job
Speaker 1: posting service where you could search for jobs, uh and
Speaker 1: and post jobs online. Um so yeah, this was simil
Speaker 1: There were a lot there was a lot of speculation
Speaker 1: and a lot of skepticism that he would be able
Speaker 1: to affectly lead a company when he himself was admittedly
Speaker 1: not from the technological world. In fact, there were stories
Speaker 1: about how he didn't use email. I mean, he was
Speaker 1: just not a technology guy. But he did have an
Speaker 1: understanding of how businesses work. Now that was not always,
Speaker 1: it was not always in a successful endeavor with Yahoo,
Speaker 1: but he did manage to turn Yahoo around from this
Speaker 1: this this rock bottom level that they had hit after
Speaker 1: the bubble burst, and he may manage to keep it afloat.
Speaker 1: And so in two thousand two he had a meeting
Speaker 1: with these those those two upstarts who were running Google,
Speaker 1: the company that was furnishing the search algorithm that Yahoo
Speaker 1: was using. And in two thousand. Yeah, they were talking
Speaker 1: at that time about the possibility of an acquisition and
Speaker 1: how different would the world be if Yahoo had a
Speaker 1: acquired Google at that time. I mean, it's it's hard
Speaker 1: to think about because think about all the stuff Google
Speaker 1: does that's well beyond just search engines. And if y'all
Speaker 1: who had acquired Google, would that corporate culture have existed?
Speaker 1: Would we have would we have a driverless car made
Speaker 1: by Google? Would we have you know, Google Project Glass? Yeah,
Speaker 1: I mean, not to mention just all the other stuff
Speaker 1: that Google does, Google Docs, and Gmail. I mean, a
Speaker 1: lot of this stuff would probably have been created at
Speaker 1: Yahoo in some form or another, but it definitely would
Speaker 1: have taken a different path. Well, Brin and Page could
Speaker 1: not come to any agreement with Simul, and that was
Speaker 1: partially because it was really hard to value Google. And
Speaker 1: it all depends on who you ask. How much money
Speaker 1: was offered. I heard one billion, but then Page and
Speaker 1: Brand asked for three billion. I also heard that there
Speaker 1: was a three billion offer, but Page and Brend then
Speaker 1: said five billion. So it almost sounds Page and Brand
Speaker 1: kind of just didn't want to sell, like they felt
Speaker 1: that that was that might be the wrong choice. And
Speaker 1: then there's also the argument of maybe they were just
Speaker 1: trying to feel out how much their company was worth.
Speaker 1: I don't know that all the details, and in fact,
Speaker 1: a lot of the information I found what conflicted with
Speaker 1: other information I found, So it's just speculation on my
Speaker 1: part at this point. But ultimately Yahoo did not purchase Google,
Speaker 1: and I know there was an entire article and Wired
Speaker 1: that said that that was the biggest mistake that Semil
Speaker 1: made throughout his tenure at Yeah. It was that he
Speaker 1: did not jump on the chance of acquiring Google. Because
Speaker 1: Google continued to grow in popularity and in fact would
Speaker 1: ultimately dominate web search, and Yahoo's share of the web
Speaker 1: search market would start to shrink as Google's began to
Speaker 1: be the entire, the vast majority of web search. All
Speaker 1: the other little web search engines out there, we're reduced
Speaker 1: to just the tiniest user bases in comparison, at least
Speaker 1: in the United States. Yeah, yeah, in the units, that's
Speaker 1: a good qualifier in the United States. You know, occasionally
Speaker 1: we believe it or not, we we go on a
Speaker 1: little long about subjects, and I think that's so, and
Speaker 1: that actually was the case with this episode on Yahoo.
Speaker 1: We ended up with so much material that we ended
Speaker 1: up splitting it into two episodes, um, which we didn't
Speaker 1: know at the time, so surprised, but UM yeah, so
Speaker 1: we're gonna wrap it up here and uh and you
Speaker 1: can tune in for our second episode on on Yahoo
Speaker 1: in the two thousand's um, so, so make sure to
Speaker 1: tune in for that. Yeah, and if you have any
Speaker 1: suggestions for future topics that Chris and I should tackle
Speaker 1: and other episodes of tech Stuff, perhaps other topics so large.
Speaker 1: After we record it, we realized that's too long for
Speaker 1: any human being to endure. Let's split that up again. Us. Know,
Speaker 1: you can send us a message on Facebook for Twitter,
Speaker 1: are handled? There is tech Stuff hsw or shoot us
Speaker 1: an email or address is tech Stuff at Discovery dot
Speaker 1: com and Chris and I will talk to you again
Speaker 1: about Yeah. Who is it turns out really soon for
Speaker 1: more on this and thousands of other topics. Is it
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