Guy Walks Into a Baby Yahoo...

From creating an essential category to fading away

For some reason, my first visit to Yahoo still runs like a movie reel in my head.

It was 1995, nearly 30 years ago. The internet was young. Yahoo was its first consumer directory. Not a search engine – that didn’t exist yet. Yahoo was more like TV listings in the era before streaming – you’d look down a listing of web sites by category and click to go there. In mid-1995, not a whole lot of websites existed. And Yahoo was about the only way to find them.

I wrote a column about that visit. Yahoo’s “headquarters” (I use the term loosely) was in Mountain View, Calif. The column began: “To find the company, you have to drive next to the railroad tracks into a beat-up section of town, pull up to a one-level office building, then go around back to a single glass door with the Yahoo logo painted on the window. Inside, the place looks and feels like a college newspaper office. The company has 16 employees crammed into tiny offices stocked with yard-sale metal desks.” I guess I left out that there were a few buckets on the floor in case it rained. The roof leaked.

I sat down with Jerry Yang and David Filo, the Stanford students who founded Yahoo. Filo wore a white T-shirt, shorts and white socks, sans shoes. They were just trying to hold on to a runaway train. The company was only a year old but people were already saying it could be the next America Online (remember, AOL was a superpower at the time). Yang and Filo weren’t thinking much beyond Yahoo as a directory service. They didn’t tell me anything about plans to add email or content or chat. They were mostly working out how to charge for advertising.

In my memory, the scene was charming, like running across a group of kids operating a lemonade stand that was for some reason super busy. There was a crazy, energetic unpredictability about the internet at the time, and Yahoo was right in the middle of it. The company could’ve become everything or nothing.

In retrospect, what did happen was that Yahoo never knew what it should be. Within just a couple of years, the number of web sites exploded beyond any ability of a listing site to keep up. The early search engines appeared – Alta Vista, Lycos, AskJeeves and the like – and they became a better way to navigate the web. Yahoo kind of followed the AOL model, building in email and chat and then content. But while in those first years Yahoo was essential – it soon no longer was essential.

If I put on my category design hat, I’d say that at its founding, Yahoo created an essential category of internet directory, but it quickly became an outmoded category, displaced by the new category of search. From then on, Yahoo really had no identifiable category. When it played in categories like email or media, it never won those categories, instead bouncing around at second, third or fourth place.

Yahoo did get big. The brand had momentum from those early years, and it made some good moves, particularly investing early in Chinese online retailer Alibaba. In 2008, management made one of the most boneheaded decisions in the history of the internet. Microsoft offered to buy the company for $44.6 billion, and Yahoo turned it down. Eight years later, as Yahoo’s business sputtered, Verizon bought it for $4.5 billion.

Yahoo still exists. I dare you to find anyone who uses it. The site looks like it’s run out of run-down offices next to train tracks.

Here’s the column as it ran in USA Today on October 13, 1995. It’s not available online.