Yahoo headquarters in Sunnyvale

Yahoo co-founders Jerry Yang (left) and David Filo (right)

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Yahoo! Inc. (NASDAQ: YHOO) is an American public corporation incorporated in Sunnyvale, California and a 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 1, 1995. The company is headquartered in Sunnyvale, California in Silicon Valley.

According to Web traffic analysis companies (including Compete.com, comScore,[3] Alexa Internet,[4] and Nielsen Ratings),[5] the domain yahoo.com attracted at least 1,575 million visitors annually by 2008 according to a Compete.com study.[6] 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 for $31 a share, or $44.6 billion for all the shares.[7] Yahoo's board of directors rejected the offer on February 11, calling it too low.[8] On May 3, 2008, Microsoft withdrew its offer. [9][10]

Contents [hide]
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 Diversified services
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 Imprisonment of Chinese dissidents
6.3.1.1 Shi Tao
6.3.1.2 Li Zhi
6.3.1.3 Sued in US court for outing Chinese dissident Wang Xiaoning
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
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.[11]

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.[12] On April 5, 1995, Sequoia Capital provided Yahoo with two rounds of venture capital.[13] 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.[14]


[edit] Growth (1997-1999)
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,[15] 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
[edit] 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).[16]

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).[17][18] 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.[19] Although the merger never materialized the two companies decided to form a marketing/advertising alliance six years later in 2006.[20]

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.[21]


[edit] 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.[22] In July 2003, BT Openworld announced an alliance with Yahoo.[23] On August 23, 2005, Yahoo and Verizon launched an integrated DSL service.[24]

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,[25] 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. On 9 July 2004, Yahoo acquired e-mail provider Oddpost to add an Ajax interface to Yahoo Mail.[26] On 13 October 2005, Yahoo and Microsoft announced that Yahoo Messenger and MSN Messenger would become interoperable. In 2007, Yahoo took out the storage meters and made the storage limit unlimited.

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.[27] 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.[28]

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.[29]

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.[30]


[edit] 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.[31][32]

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.[33][7] Days later, Yahoo considered alternatives to the merger with Microsoft, including a merger with internet giant Google[34] or a potential transaction with News Corp.[35] However, on February 11, 2008, Yahoo decided to reject Microsoft's offer as "substantially undervaluing" Yahoo's brand, audience, investments, and growth prospects.[8] 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.[36] 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.[37] The value of Microsoft's cash and stock offer declined with Microsoft's stock price, falling to $42.2 billion by April 4.[38] 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.[39] 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.[40] Later the same day, Yahoo stated that the original $45 billion offer was not acceptable.[40] Following this, there has been considerable discussion of having Time Warner's AOL and Yahoo merge, instead of the originally proposed Microsoft deal.[41]

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."[9][42]

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.[43]

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. [44]


[edit] 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.


[edit] Diversified services
The factual accuracy of this article is disputed.
Please see the relevant discussion on the talk page.(May 2008)

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. 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".[45]


[edit] 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.[46] In March, 2007, Yahoo announced that their email service will offer unlimited storage beginning May 2007.[47]

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. Some MailPlus subscribers have reported difficulties in successfully cancelling their Mailplus (automatically renewed and paid by credit card) subscriptions. Although other areas of the Mailplus web interface appear to function correctly, a blank page appears when users select "cancel service" from the list of options to manage the service. It is unknown whether this error has been an accidental oversight by Yahoo! programmers, or a deliberate attempt to retain Mailplus subscription cash flows as long as possible.

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.[48]


[edit] 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.

On March 31, 2008 Yahoo launched web portal http://shine.yahoo.com/ another Yahoo! property dedicated to women between the ages of 25 and 54. Yahoo! called this demographic underserved by current Yahoo! properties. With Shine Yahoo! will expand its offerings in parenting, sex and love, healthy living, food, career, money, entertainment, fashion, beauty home life and astrology.


[edit] 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.


[edit] 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.[49]

Yahoo has announced they also plan to adopt Novarra's mobile content transcoding service for the oneSearch platform.[50]


[edit] 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.


[edit] 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.


[edit] 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.[51]

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.[52]

On 7 April 2008, Yahoo! announced Yahoo! AMP!, an online advertising management platform.[53] The platform seeks to simplify advertising sales by unifying buyer and seller markets. The service is scheduled for release in quarter 3 of 2008.


[edit] 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.


[edit] 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.[54]

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.[55]