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What went wrong for Yahoo

What went wrong for Yahoo

135 comments

·July 26, 2025

thunderbong

> In 1998, Yahoo turned down the opportunity to acquire Google for $1 million. Yahoo made six acquisitions that year, spending $107.3 million.

> In 2002, Google offered to sell again for $1 billion. Yahoo hesitated and Google raised its price to $3 billion. Yahoo declined at the higher price. Google went on to become a trillion dollar company.

> Yahoo attempted to acquire Facebook for $1 billion in 2006, but Mark Zuckerberg turned down the offer. Had Yahoo increased its offer by just $100 million, Facebook’s board would have forced Zuckerberg to take it. Facebook also became a trillion dollar company.

In inclined to believe that neither would have become trillion dollar companies if they had been acquired by Yahoo.

btilly

In inclined to believe that neither would have become trillion dollar companies if they had been acquired by Yahoo.

I absolutely agree.

One fundamental reason why Yahoo failed is that they prioritized short-term revenue from search partners, over long-term reputation. One of the key people behind that was Prabhakar Raghavan.

And now, Prabhakar Raghavan is at Google. Where he has proceeded to make the same mistake, with the result that Google Search quality fell off of a cliff.

If Google had been acquired by Yahoo, he would have been in a position to destroy Google earlier than he actually did.

See https://www.wheresyoured.at/the-men-who-killed-google/ for more.

throwup238

The HN discussion on that article has a lot of great commentary, including from some insiders: https://news.ycombinator.com/item?id=40133976

Macha

> In inclined to believe that neither would have become trillion dollar companies if they had been acquired by Yahoo.

Having worked for Yahoo, I have to agree. Acquisitions were always seen in terms of "what can they do for the Yahoo brand?" and "How can we cut costs by migrating this to Yahoo tech?", not "How can we grow this business?". A Yahoo owned Facebook would have been suffocated like Tumblr and Flickr were.

noAnswer

So it would have been a net positive for society. :-)

whynotminot

Good guy Yahoo murdering companies that would have been net bad for society lol

neilv

I used to joke that Yahoo were benevolent time travelers from the future, sworn to stop companies that would become threats to humanity.

They would stop the company by buying it.

Because Yahoo buying a company kills the company.

If only Yahoo hadn't run out of money before... (certain companies that are now too powerful and ruthless to be called out safely).

Mobius01

Now I want a counter factual story about Yahoo acquiring Facebook, which then never flourishes into the influential network it became. What happens to society? Would we have the same political climate?

iwanttocomment

I feel like SOUTHLAND TALES, a movie written and shot before the iPhone was released, is quite helpful here. The movie emphasizes all of our post-9/11 failings in American culture at a time before Facebook or Twitter or any of the social media nonsense people blame the current awfulness on. The problems we face as Americans are far deeper than "cell phones" or "the Internet".

zaphar

Those problems are American problems. They are human problems. You see them everywhere not just here.

benrutter

I want to know this too! If I invent a time machine, I'll message you but till then here's my ungrounded take (Obviously everything here is my personal opinion and not evidenced)

The current political climate has mainly happened because capital interest has taken control of unregulated news and opinion. Meta are a particularly bad example of this, but as long as there's money to be made by providing a platform for polarising politics and fake news, then I think someone will do so.

Who knows, maybe in that alternate universe you'd be posting "if Yahoo hadn't made such savy choices, I wonder if we would have the political climate we have today?"

gonzobonzo

> The current political climate has mainly happened because capital interest has taken control of unregulated news and opinion.

We're seeing the opposite, though. As the traditional media companies declined and the masses gained a greater ability to voice their own views, polarization increased.

As someone who tries to avoid the news and politics, it's pretty easy to avoid the companies selling them. But I keep running into them because there are lots of users on Hacker News/Reddit/etc. who try to interject it into every discussion they can . Invariably, these people don't come at it from the point of view that they might be wrong and the other side might be right; they act like zealous crusaders on a mission to vanquish evil.

kevin_thibedeau

It's because of the fragmentation of news sources that can now be customized to one's preference with any finely sliced political cant desired. Three television networks maintained a measure of neutrality in their reporting. Mainstream print media did too albeit to a lesser extent. Wackjobs had a hard time finding each other to form a tribe that would destabilize society.

dehrmann

> unregulated news

For all of unregulated news's flaws, government controlled news would be worse.

cruffle_duffle

> The current political climate has mainly happened because capital interest has taken control of unregulated news and opinion

This has always been the case for as long as society has been consuming the news. “Business tycoons” have bought up newspapers and media outlets since forever to push their narrative.

I think one component that has changed is the sheer volume and diversity of media makes competition for your attention (clicks) all the more fierce. Enter The Algorithm and optimizing for metrics above all else.

I dunno. That doesn’t invalidate anything about the original question about what present day would be like without Facebook. Would something else similar have replaced it? Is Facebook really “the problem” or is it algorithmic content because algorithmicly driven content was going to happen facebook or not.

anomaly_

Haha what? It’s the literal opposite mate. We’ve had an explosion of independent and non-capital aligned media. No matter what your brand of crazy is, you can find the “thought leaders” and community for you.

trueismywork

We would have had something else with same effect. The age was ripe with social media, orkut, Facebook, MySpace, and so many others I cannot even remember.

smelendez

That’s my thought.

One analogy is local news media ecosystems across the US, which have generally looked pretty similar though not 100% identical over the past ~125 years or so, suggesting some determinism based on broader culture and technology.

If Facebook had stumbled, something else would have gotten the next microgeneration of college students and then their parents and grandparents.

It’s possible to me that an independent Instagram would have filled Facebook’s niche a few years later, and something like Snapchat would have taken the current Instagram niche. Maybe Twitter would have played a different role.

It’s also possible a web 2.0 answer to classmates.com would have grabbed the older crowd, and we’d have a slightly more profound age split.

But ultimately I think we’d end up where we are — a set of platforms algorithmically curating feeds of user-generated content — with a few cosmetic differences.

nkrisc

I think something roughly Facebook-shaped was inevitable.

elevaet

Before Facebook there was Myspace and Orkut (which was huge in Brazil) - things were definitely pointed that direction.

Spooky23

I think so. Social networking was the AI of that era.

fnord77

> Would we have the same political climate?

that's exactly where my thoughts went

Mistletoe

No it would just be a bunch of happy people messaging each other on Yahoo Messenger. We were never meant to see the inside of the brain of the average human put on public display.

dyauspitr

Yahoo could have been society’s loss leader.

pilingual

Inclined because, for example, Viaweb didn't become Shopify.

Tumblr, del.icio.us, ROI. Probably all should have continued growing and becoming established properties.

paradox460

Flickr was the Instagram of it's era. It could have maintained that crown if Yahoo gave half a duck about it

smelendez

Flickr and Instagram were pretty different.

Flickr incentivized uploading a lot of photos with metadata and was highly searchable. It was great for photo hobbyists building a personal archive for others to peruse.

Instagram was for smartphone photos and playing with filters to set a vibe, and ephemeral sharing with friends and people you wanted to impress. It’s hardly searchable at all.

cruffle_duffle

Delicious was the only useful bookmark manager ever. Nothing ever came close to replacing it. Though for me the “social” part was pretty useless (plenty of actual link aggregators out there to discover content at the time)

…god remember the “tags” phase of content organization?

firesteelrain

Delicious was cool because of the constant streaming of links and things that I was able to discover back then. I would sit there and just click on links, finding good content

MattSayar

What's the superior phase of content organization now?

xxr

> In inclined to believe that neither would have become trillion dollar companies if they had been acquired by Yahoo.

People also like to point to how foolish of Blockbuster it was not to buy Netflix when they had the opportunity to, but I’m also inclined to believe that the merged companies would never have made the decisive moves involving streaming video and content production. It’s tempting to say that Amazon would have filled in the streaming video gap (although perhaps late enough for feature film and TV piracy to proliferate a little further into the mainstream), but I wonder whether Apple would have adapted its iTunes service into Apple TV first. (Another dark horse I like to think about here would be RealMedia which may have identified a niche.)

dehrmann

The story also mentioned Yahoo!'s best investment: Alibaba. What was different was Yahoo! was just an investor, not a buyer.

Jabbles

"Facebook’s board would have forced Zuckerberg to take it"

Doesn't Zuckerberg have majority control?

dpe82

Sure; but (IIRC) at the time Facebook was burning cash and the board could have threatened future funding if he refused the offer. He may have been able to get more funding anyway but the larger point is these things are never as simple as the legal docs might imply.

manquer

Yup It is power dynamics always, legal documents only matter in court.

At the time in 2006 there were plenty of competing networks and any one of them could have climbed to the top.

Facebook wasn’t unique tech wise by all accounts one huge 20k line main file not like Google with PageRank or pegs viaweb written in Lisp or Amazon with early aspects of AWS.

FB could have been replicated and with right money scaled by anyone else , the challenge was there were series of spectacular growth and failures in the social network space

The tech innovations started first with Hack as a PHP compatible language couple of years later then things like relay , graphQL, react and so on.

Ifkaluva

Recall that Kalanick had majority control at the time that he was ousted.

Barbing

Travis Kalanick of vibe-physics near-breakthroughs fame?

drewg123

I do miss them being one of the biggest FreeBSD contributors. For a long time in the late 90s / early 2000s Yahoo was to FreeBSD what Netflix is now (and maybe a bit more). They used to host a lot of the FreeBSD build/test infrastructure and employed several src committers and they contributed heavily to a LOT of work that has made FreeBSD a viable OS going forward.

For example, they contributed heavily to the SMPng project (which made FreeBSD into a modern, multi-theaded kernel with fine grained locking). They even hosted the kickoff meeting: https://people.freebsd.org/~fsmp/SMP/SMPmeeting.html They employed Peter Wemm, who did the majority of the work for the AMD64 (eg, x86-64) port. And lots that I'm forgetting about probably..

chris_j

What happened? Did they stop using FreeBSD? Did they continue to use it but jsut stop contributing?

otterley

Yes, we migrated over to Linux for a number of reasons, among them 1/higher developer mindshare, and 2/Linux had better SMP performance for the first decade or so vs. FreeBSD as we started to buy beefier multi-core and multi-socket servers.

andy_ppp

I think the issue was the people running it were the type of people who are taught to ruthlessly look at a spreadsheet and decide if Coca Cola can invest X in marketing and product development they can expect to get Y back (with reasonable accuracy). Of course with software small teams can do big things so these calculations are almost impossible.

Investing a billion dollars in your search engine in ~2008 might be considered insane of course. We were told by Carol Bartz at an all hands that they had done the work on their spreadsheets and they could not compete with the investment Microsoft and Google were planning. It still annoys me to this day that there was no discussion or attempt to decide if the engineers and the company were up for the challenge with Google, even with less money. I'm not saying Yahoo! would have won, but to not even have bothered trying still irritates me - where is your vision? where is your fight?

Anyway this is my take on it, the management decided to just give up on being technically excellent and even being a software company at some point. The mind boggles why you would do this while software was eating the world and you had loads of fantastic engineering talent...

ogou

An underreported part of the Yahoo story is its relationship to India. I worked there during the Verizon years and heard the history. Yahoo was a forerunner of the "offshoring" of technology jobs to India. It moved lots of core operations to a small army of engineers there. They figured out that their American counterparts made substantially more money than they did, especially the middle managers. Waves of Indian employees began moving to Santa Clara and getting market rate wages. Suddenly, Yahoo wasn't saving as much money as they used to. I don't think it was a major factor in its overall financial decline, but it had some effect I'm sure. On a side note, I heard a couple of Indian engineers say they were moving back to raise their kids because they didn't like the cultural influences in our schools. There were many interesting lunchtime conversations about things like that.

jjbinx007

It was only just over a decade ago I used to play lots of the online games hosted on Yahoo and it was great! I had just started dating my (now) wife and we used to hang out every evening in an online video conference and play online versions of Pool, Risk etc, and as it was all inside Yahoo's ecosystem we only had to login once and we could automatically play each other.

Going further back, Yahoo's web directory was also a good and fun way to explore the world wide web. When Google appeared, and its search was so good, the concept of "people don't need bookmarks any more" seemed to spread, but in the process the joy of discovery was lost. Rather like how browsing DVDs in Blockbuster means you could find something really cool by accident, but searching a database means you have to have an idea what you want to find to begin with.

nertzy

I am still a Yahoo! pinger as well.

  ~  ping yahoo.com
  PING yahoo.com (74.6.231.20): 56 data bytes
  64 bytes from 74.6.231.20: icmp_seq=0 ttl=50 time=42.366 ms
  ^C
  --- yahoo.com ping statistics ---
  1 packets transmitted, 1 packets received, 0.0% packet loss
  round-trip min/avg/max/stddev = 42.366/42.366/42.366/0.000 ms

qingcharles

It's a muscle memory now after 30 years of doing it. Always the first thing I ping when testing a connection.

jen729w

Shortest, fastest?

    ping 1.1

oreilles

I just tried, pinging Yahoo is about 20 times slower than pinging Google...

firefax

I decided to run a small experiment

ping -c 20 -i 5 google.com; ping -c 20 -i 5 yahoo.com [snip] --- google.com ping statistics --- 20 packets transmitted, 20 packets received, 0.0% packet loss round-trip min/avg/max/stddev = 14.746/19.939/25.057/3.153 ms [snip] --- yahoo.com ping statistics --- 20 packets transmitted, 20 packets received, 0.0% packet loss round-trip min/avg/max/stddev = 14.561/20.883/25.080/2.675 ms

They look comparable to me?

katzgrau

As a Y! employee for a couple of years - although my time was brief, I can say with confidence that had Yahoo successfully acquired Google or Facebook, both would have been destroyed in short order.

NoMoreNicksLeft

Yes, but that just makes me wish it had happened...

mixmastamyk

Wish they’d been bought by MS, probably would have sidelined them. Was a really bad deal from memory.

rasz

Nobody can beat Yahoo in making bad deals. Lets not forget they made Mark Cuban a billionaire with a legendary Broadcast.com acquisition at $10K per user! $5.7 billion dollars written off in less than two years.

WarOnPrivacy

Another football in the Verizon Yahoo/Shuffle are those Verizon customers who were sold to Frontier but had verizon.net email addresses.

Verizon kept control of those lightly-maintained email accounts and pushed them into the Yahoo/AOL infrastructure. Users with a verizon.net email address had webmail access at mail.aol.com.

Verizon didn't make life easy. They changed POP/IMAP/SMTP servers every year or so. Just this May they changed again, from smtp.mail.yahoo.com to smtp.verizon.net - but the old servers still worked until the AOL outage 2 days ago.

During the years in between, customers got caught between AOL's mandate to use OAuth and Microsoft's refusal to support it in Outlook.

FF to now-ish and Verizon is purchasing those same FiOS customers back again. One more smack with the Verizon ping-ping paddle.

qingcharles

It has caused no end of trouble for older folks who are still using yahoo.com and aol.com and sbcglobal email addresses who can't get any sort of sane support and are having a nightmare time getting into their email accounts that are linked to everything they've signed up for in the last 30 years.

ciabattabread

> but the old servers still worked until the AOL outage 2 days ago.

So that explains why my dad's email suddenly couldn't send outgoing messages (the configuration, for years, was outgoing.yahoo.verizon.net with normal password). After what felt like an hour, what worked was changing it to smtp.mail.yahoo.com and using OAuth.

sanex

Customers who had sbcglobal and att email addresses ended up using Yahoo for email, which I always found ironic.

mkagenius

Just checked Marissa Mayer's X account, can someone explain why is her account not getting enough views/reach - https://x.com/marissamayer

She apparently has 1.4M followers with barely 20 likes. This was even worse a few months back.

Are those followers bought / dormant? Or is twitter suppressing it?

qingcharles

There was an algo change a couple of weeks back. I saw a few accounts with hundreds of thousands of followers saying they were getting only dozens of likes on their posts. (mostly accounts that had dissed Musk, so factor that possibility in)

I checked Mayer's account and it's not under any sort of shadowban that's detectible with the regular tools, which are usually very accurate.

gonzobonzo

I went back half a year in her account, and it seems like it was entirely re-Tweets and self-promotion? It would make sense if the algorithm isn't prioritizing that kind of content, or that kind of content isn't gaining traction.

I saw she re-Tweeted something from Bryan Johnson. Looking at his account, he has less than half as many followers, but many more likes and a lot more engagement. But it's almost all his own content, and it's content that readers would actually find engaging.

blitzar

Twitter is all bots.

add-sub-mul-div

It's a ghost town for anything substantive, if she's not shouting about culture war stuff she's not likely to get much engagement.

jeffbee

Nobody currently uses Twitter so follower count implies nothing. Lots of notorious figures have posted regarding how they get the same interaction rate on Bluesky even though they supposedly have 10x or even 1000x more followers on Twitter.

For example: https://bsky.app/profile/brandonfriedman.bsky.social/post/3l...

eastbound

I can’t, but influence is bought and temporary. People aren’t found off the person, but what she represents in society. And since she spent 8 years buried at Yahoo!, busy executing the winddown plan (masterfully), she may have inadvertently communicated that she’s expert in liquidation. Not something you follow when you want to know what the future is.

(Insert a distasteful joke about how she would have made a killing at DOGE).

can16358p

Yahoo literally did every wrong move and turned every move that could make it become successful again down, almost as if it deliberate. I can't believe it still exists.

reilly3000

In an odd turn of events I have ben one a regular user of Yahoo! despite how terrible the experience and content is. It shipped as a Safari default years and years ago and has remained in my neglected Safari bookmarks for no particular reason. I’ve recently reverted to using Safari on iPhone as my default mobile browser and used to rely on my recently used tabs for a quick dopamine hit. Several months ago Apple removed that from the new tab experience, putting my bookmarks front and center. So I use Yahoo. It’s mostly clickbait content, heavily monetized, with all of the excrement of 20 years of AdTech on display. Ads routinely load in the wrong unit size, or with a double quote character that breaks the sticky container making it impossible to view the next page of comments. Most often the ads are mobile redirects that just crash the page and lose your scroll position. It’s really a terrible experience to behold. At least I don’t use social media.

hshshshshsh

Everyone is a genius writing what went wrong but never have the guts to short it as it unfolds.

WA

I agree and would’ve written the same several years ago. Unfortunately, shorting is expensive and you have to get the timing right, too, not only the direction of the stock. If you’re early when shorting, you’re still wrong.

mixmastamyk

Also a slow decline is not lucrative enough in comparison to the risk.