Yahoo: a history of the internet in 5 acts
As the iconic online brand is sold we trace the tale of the guide to the world wide web
In 1994 Jerry Yang and David Filo, two graduate students at Stanford University, create a website called “Jerry and David’s guide to the world wide web”, cataloguing sites.
January 1994: In the early days on the internet - when no one knows what content is out there - Jerry Yang and David Filo, two graduate students at Stanford University, create a website called “Jerry and David’s guide to the world wide web”, cataloguing sites.
Early 1995: Yahoo.com domain name is created, the company is incorporated, and it raises funding from Sequoia Capital.
April 1996: Yahoo goes public raising about $33.8m, with an opening share price of $13 and a valuation of $848m.
December 1999: Yahoo’s stock price doubles in just a month, closing at an all-time high of $108 a share in January 2000.
Dotcom disaster and the growth of Google
Early 2000s: Yahoo’s web search is powered by Google.
September 2001: Shares in Yahoo sink to an all-time low of $4.40.
Summer 2002: Mr Semel tries to buy Google for about $3bn but is rebuffed. Google’s co-founders reportedly want $5bn.
2003: Having bought up smaller search engines, Yahoo begins using their web crawling technology to power the web search function on Yahoo.com.
2004: Google goes public, valuing the company at $27bn as the share price closes just above $100.
August 2005: Mr Yang arranges for Yahoo to buy a 40 per cent stake in Chinese e-commerce group Alibaba for $1bn and take control of Yahoo China.
June 2007: Mr Semel resigns, replaced by co-founder Mr Yang.
Three chief executives and a struggle for relevance
February 2008: Months into his tenure, Mr Yang is faced with an unsolicited offer from Microsoft to buy Yahoo for $44.6bn. He argues that the deal undervalues the company and Microsoft walks away in May.
September 2011: Ms Bartz leaves as revenues continue to fall and display advertising begins to suffer, sending an email to employees saying she was fired over the phone by Yahoo’s chairman.
October 2011: Activist investor Dan Loeb argues that Yahoo needs new leadership and a way of unlocking the value in its Asian assets: Alibaba and Yahoo Japan.
January 2012: Scott Thompson, president of eBay’s PayPal division, is appointed Yahoo chief executive, shaking up the company with a leadership reorganisation and thousands of redundancies.
May 2012: Mr Thompson steps down after Mr Loeb questions whether he embellished his academic credentials and whether the Yahoo board completed appropriate diligence when hiring him. Mr Loeb gets three seats on the board.
Marissa Mayer and the hope for a miracle
July 2012: Yahoo poaches Marissa Mayer from Google, where she had become a senior executive focusing on products including search, to lead a turnround.
September 2012: Yahoo completes the first stage of repurchasing Alibaba shares and hands about $3bn back to shareholders.
2013: Ms Mayer goes on an acquisition spree, buying start-ups - arguing that new people and product expertise will revive the company. In May, Yahoo pays $1.1bn for blogging site Tumblr.
July 2013: Yahoo buys back Mr Loeb’s stock for twice what he paid, bringing his profits to $1bn.
January 2014: Yahoo fires Henrique de Castro, the chief operating officer brought in by Ms Mayer from Google to oversee advertising, paying a severance package of more than $60m.
July 2014: Yahoo makes a deal to keep a greater share of Alibaba when the company goes public, selling just 27 per cent of its stake.
Trouble as all eyes on Alibaba dollars
September 2014: Alibaba becomes the world’s largest stock market flotation, valued at more than $230bn.
October 2014: Shareholders turn on Ms Mayer after the Alibaba IPO, demanding to know more about how much of the cash they will get, how much she will spend on acquisitions and how much could end up in the pockets of the tax authorities. Activist investor Starboard Value calls on Yahoo to explore a strategic tie-up with AOL to reduce the tax burden.
January 2015: Yahoo announces plans to spin off its stake in Alibaba in what it says will be a tax-free transaction. It has to bundle a small part of its operating business with Alibaba, choosing to spin off Yahoo Small Business, which hosts websites.
May 2015: Verizon buys AOL, as it hopes to grow in mobile video and advertising.
September 2015: US tax authorities refuse Yahoo’s request for a so-called private letter that would in effect have rubber stamped its spin-off proposal. Investors worry the company could be hit with a multibillion dollar tax bill if it presses ahead.
October 2015: Yahoo strikes a deal with Google to halt the slide in its search business after Ms Mayer renegotiated its pact with Microsoft earlier in the year. Google has 72.4 per cent of the US search market, compared with Yahoo’s 4.8 per cent.
December 2015: Yahoo abandons its controversial spin-off plans after Starboard Value demands it switch to selling its core business, instead.
February 2016: Yahoo hires banks to examine options beyond the spin-off, moving closer to selling the business.
March 2016: Starboard proposes sweeping away Yahoo’s entire board and replacing it with candidates chosen by the activist investor, putting pressure on the company to sell.
April 2016: Suitors emerge for the company including US telecoms group Verizon, private equity groups and the British newspaper the Daily Mail. Yahoo reaches a deal with Starboard, appointing four of the investors’ nominees. A filing shows Ms Mayer could be paid $55m in severance benefits if the company is sold and her employment is terminated without cause.
July 2016: Yahoo’s losses deepen as revenues drop 20 per cent year-on-year. Verizon confirms that it will buy Yahoo’s core operating business for about $4.83bn cash, and will integrate it with AOL under long-time Verizon executive, Marni Walden. Yahoo’s chief executive says she has no plans to leave.
- (Copyright The Financial Times Limited 2016)