Founded in 1994 by David Filo and Jerry Yang, two Stanford graduate students looking for a way to index their favorite World Wide Web sites, Yahoo met with instant success as an Internet search engine, attracting tens of thousands of Web users searching for their favorite pages. But why do web surfers continue to Yahoo? Not just for the search engine. Visitors to the site can get stock quotes, find recipes, chat online about the latest sports news, order CDs, and take part in online auctions (Yahoo's auction is now the second most popular such site, trailing Ebay.) By including these features, the premier search engine on the web has become the premier Web portal. Every month, 63 percent of internet users visit Yahoo at least once. By December 1999, the site was hosting 465 million visits a day and facilitating $6.7 billion in e-commerce. Its European expansion is proceeding on schedule, with revenue from the other side of the pond at $22 million and accounting for 10 percent of the company's revenues.

Happily ever after?

But while Yahoo remains the most popular portal, the company doesn't have free sailing into the lucrative e-world of the future. Competitors like Infoseek are teaming up with traditional media companies such as the Walt Disney Company, creating deep-pocketed partnerships and stiff competition for Yahoo's brand strength. The record-setting merger of Time Warner and America Online has also worried some observers, who feel Yahoo is not taking enough steps to insulate itself from the potential effects of the merger. Yahoo, which has promised to remain independent, must pay other companies for the articles and photographs that it displays on its site. AOL, on the other hand, can easily take content from a Time Warner publication or music studio for its online content.

After the integration of Broadcast.com, a broadband content site aquired in 1999, Yahoo began to offer its own content. FinanceVision, a live business show starring Yahoo employees as newsanchors, delivers market information throughout the business day. This show takes advantage of the broadband connections through which 65 million Yahoo users access the site. In summer of 2000 Yahoo plans to premiere two more channels following the FinanceVision model.

People still matter

The structure of Yahoo's search engine is the product of careful human editorial labor, as opposed to other engines that use mathematical formulae and programs to search the Web. Now the company is capitalizing on this characteristic. Other search engines may be more powerful and may access more sites, but Yahoo's ability to categorize sites has enabled it to create regional versions of Yahoo and customized versions for children and for foreign countries. Thanks to the region-specific offshoots of Yahoo the company is the biggest portal in Europe, providing unique portals for each country in a variety of languages and returning only sites in that country. In February 2000 Yahoo invested $60 million in Yahoo!Korea, hoping to establish a similarly strong presence in the rapidly expanding Asian online industry. Yahoo also formed an alliance with Samsung Electronics Co. Ltd. of Korea to sell goods at Yahoo's site and work together on developing mobile phones and devices which can directly access the internet.

Have stock, will buy

The company has seen explosive growth. Its market capitalization hit $40 billion in early 1999. Its stock price - which in late 1998 and early 1999 was shooting up 10 percent virtually every day - is being driven by investors who see the company as the media company of the cyberage.

In 2000 Yahoo became the first major internet company to unveil a direct investment plan, allowing people to buy shares without going through a broker. Using its valuable stock as powerful currency, the company has been busy with acquisitions. In January 1999, Yahoo acquired Geocities, a company that lets individuals create personalized web sites, for $4 billion. With Geocities' ability to keep visitors online for a long time, Yahoo hopes to prevail as the Web's premier portal. Later that year, the company purchased Online Anywhere, a software company that enables web pages to be sent to cell phones, Palm Pilots, and other electronic devices. Yahoo also struck a marketing and distribution deal with Sprint Corporation, through which it will deliver e-mail, stock quotes, news, and other information to Sprint PCS users. These agreements, along with one formed in 2000 with AT&T, are factors in Yahoo's Yahoo!Everywhere plan, which seeks to extend the company's reach into wireless devices. Several services are already available, such as email, sports, finance, news, weather, horoscopes, yellow pages, driving directions, and people searches. Mobile e-commerce is next on Yahoo's list of sevices to be conducted on the go. The creation of a KMart Internet subsidiary, BlueLight.com, in December 1999 paved the way for yet another Yahoo co-branding opportunity. The new service will offer online shopping and a free ISP.

It's not all fun and online games

Besides the success of the company, Yahoo also faces legal problems extending from its popularity and broad range of offerings. In France, which has a strict ban on racist material, Yahoo must find a way to prevent French users from accessing sites auctioning Nazi and Ku Klux Klan memorabilia in America. As far as happenings in the states go, Yahoo is being sued for disclosing a user's identity in accordance with a subpoena. The subpoena was issued in regards to an individual who posted derogatory remarks on one of Yahoo's message boards.

Searching for a better engine

Yahoo! announced in June 2000 that it would replace its consumer search provider Inktomi with Google, a new search engine that has been highly ranked. Google revealed that its searches encompass an average of more than one billion Web pages per search--more than any other search engine.

Yahoo! in Asia