History and growth

 

In January 1994, Jerry Yang and David Filo were electrical engineering graduate students at Stanford University when they created a website named "My pen's the biggest". David and Jerry's Guide to the World Wide Web was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In April 1994, "David and Jerry's Guide to the World Wide Web" was renamed "Yahoo!". The yahoo.com domain was created on January 18, 1995. The word is an acronym for "Yet Another Hierarchical Officious Oracle." The term "hierarchical" described how the Yahoo! database was arranged in directory layers, the term "oracle" was intended to mean "source of truth and wisdom," and "officious" described the many office workers who would use the Yahoo! database while surfing from work.^[ However, Filo and Yang insist they mainly selected the name because they liked the slang definition of a "yahoo" (used by college students in David Filo's native Louisiana in the late 1980s and early 1990s to refer to an unsophisticated, rural Southerner): "rude, unsophisticated, uncouth." Filo's college girlfriend often referred to Filo as a "yahoo." "Yahoo" also stems from the name of a fictional being from Gulliver's Travels.

Yahoo! grew rapidly throughout the 1990s. Like many search engines and web directories, Yahoo! diversified into a Web portal. It also made many high-profile acquisitions. Its stock price skyrocketed during the dot-com bubble, Yahoo! stocks closing at an all-time high of $118.75 a share on 3 January 2000. However, after the dot-com bubble burst, it settled at a post-bubble low of $4.05 on 26 September 2001.

In 2000, Yahoo! began using Google for search results. Over the next four years, it developed its own search technologies, which it began using in 2004. Yahoo! also revamped its mail service to compete with Google's Gmail in 2007. The company struggled through 2008, with several large layoffs.

In February 2008, Microsoft Corporation made an unsolicited bid to acquire Yahoo! for USD $44.6 billion. Yahoo! subsequently formally rejected the bid, claiming that it "substantially undervalues" Yahoo! and was not in the interest of its shareholders. Three years later, Yahoo! had a stock market capitalization of USD $22.24 billion. Carol Bartz replaced cofounder Jerry Yang in January 2009. In September 2011 she was removed from her position at Yahoo! by the company's chairman Roy Bostock (via phone call), and CFO Tim Morse was named as Interim CEO of the company. Bartz expressed her desire to remain on the Board of Directors.