Yahoo
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. On 8 March 1998, Yahoo! launched Yahoo! Pager, an instant messaging service that was renamed Yahoo! Messenger a year later.
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.
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 $118.75 a share. Sixteen 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).
On February 7, 2000, the Yahoo! domain was brought to a halt for a few hours as it was the victim of a distributed denial of service attack (DDoS). 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. Although the merger never materialized the two companies decided to form a marketing/advertising alliance six years later in 2006.
On June 26, 2000, Yahoo! and Google signed an agreement which retained Google as the default world-wide-web search engine for Yahoo! following a beta trial in 1999.
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. In July 2003, BT Openworld announced an alliance with Yahoo!. On August 23, 2005, Yahoo! and Verizon launched an integrated DSL service.
In late 2002, Yahoo! began to bolster its search services by acquiring other search engines.
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 allowing users unlimited storage.
Yahoo! continued acquiring companies to expand its range of services, particularly Web 2.0 services.
In June 2005, Yahoo! acquired blo.gs, a service based on RSS feed aggregation. 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.
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.
On January 29, 2008, Yahoo! announced that the company was laying off 1,000 employees. 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.
In February, 2008, Yahoo! acquired Cambridge, Massachusetts-based Maven Networks, a supplier of internet video players and video advertising tools, for approx.
At the time, analysts were skeptical about the wisdom of a business combination.
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. Days later, Yahoo! considered alternatives to the merger with Microsoft, including a merger with internet giant Google or a potential transaction with News Corp. However, on February 11, 2008, Yahoo! decided to reject Microsoft's offer as "substantially undervaluing" Yahoo!'s brand, audience, investments, and growth prospects. 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. 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. The value of Microsoft's cash and stock offer declined with Microsoft's stock price, falling to $42.2 billion by April 4. On April 5, Microsoft CEO Steve Ballmer sent a letter to Yahoo!’s board of directors stating that if within three weeks they had not accepted the deal, Microsoft would approach shareholders directly in hopes of a electing a new board and moving forward with merger talks. In response, Yahoo! stated on April 7 that they were not against a merger, but that they wanted a better offer. In addition, they stated that Microsoft's "aggressive" approach was worsening their relationship and the chances of a "friendly" merger. Later the same day, Yahoo! stated that the original $45 billion offer was not acceptable. Following this, there has been considerable discussion of having Time Warner's AOL and Yahoo! merge, instead of the originally proposed Microsoft deal.
On May 3, 2008, Microsoft withdrew their offer.
During a meeting between Ballmer and Yang, Microsoft had offered to raise its offer by $5 billion to $33 per share, while Yahoo! demanded $37. One of Ballmer’s lieutenants suggested that Yang would implement a poison pill to make the takeover as difficult as possible, saying "They are going to burn the furniture if we go hostile.
They are going to destroy the place."
Analysts say that Yahoo!’s shares, which closed at $28.67 on May 2, are likely to drop below $25 and perhaps as low as $20 on May 5, which would put significant pressure on Yang to engineer a turnaround of the company. Some suggest that institutional investors would file lawsuits against Yahoo!’s board of directors for not acting in shareholder interest by refusing Microsoft's offer.
On May 5, 2008, Microsoft's withdrawal sent Yahoo!’s stock spiraling 13% lower to $23.02 in Monday trading and trimmed about $6 billion off of its market capitalization.
After Microsoft's failed bid to acquire Yahoo!, Microsoft is rumored to be looking at acquiring LiveDoor, a leading Japanese portal and the leading blogging service in Japan, to strengthen its position against Yahoo! Japan.
On June 12, 2008, Yahoo announced that it had ended all talks with Microsoft about purchasing either part of the business (the search advertising business) or all of the company.
Also on June 12, Yahoo announced a non-exclusive search advertising alliance with Google. Upon this announcement, many executives and senior employees have announced their plans to leave the company as it appears that they have lost confidence in Yahoo's strategies. According to market analysts, these pending departures are also impacting Wall Street's perception of the company.
The majority of the product offerings are available globally in more than 20 languages.
Diversified services
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 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".
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. In March, 2007, Yahoo! announced that their email service will offer unlimited storage beginning May 2007.
Yahoo! Mail premium service MailPlus provides additional functionality including POP/SMTP access to Yahoo! mail accounts, although such functionality is already provided for free by Yahoo! competitor Gmail.