How Yahoo’s Empire Crashed From $100 billion to $22 billion!

There is a popular saying that ‘Rome was not built-in a day’. Yes, the Roman empire took hundreds of years to reach its pinnacle and eventually took a couple of centuries to be completely ruined. Throughout history we have seen large empires being brought down by the heady cocktail of lack of clarity from leaders, inflexible bureaucracy and in general a decline of ideas about the future. Basically most empires have collapsed when they became complacent about their position.

Yahoo seems to be a similar empire that is crumbling away piece by piece. This decline has been brutal and in times will probably get worse. Here is a sobering thought, in 1999 Dec, Yahoo was worth almost $100 Billion (Source). At the time of writing this post it is valued around $22 Billion (source). Just imagine, that it is today half of what Facebook is being valued at and more than 5-6 times less than what Google is valued at.

So where did such a massive decline begin? How did the once largest internet company get left behind?

The Yahoo Failures!

#1. Geocities:

About 10 years ago, if you wanted to create your own online page, most people did it on Geocities. I even like to think of Geocities as the birthplace of blogging industry to some extent. It was where people expressed themselves openly in their own little corner on the internet. Geocities was bought by Yahoo for a amazing $3.17 billion, and instead of making it into a Facebook or a great blogging platform, we saw a decline of Geocities with nothing new happening. Geocities was finally closed down in Oct 2009.

#2. Broadcast.com

Yahoo bought broadcast.com for a monstrous $5.7 billion. The company was supposed to be revolutionary for video. Another lost opportunity which was promptly snapped by companies like YouTube. Today if you visit broadcast.com it simply redirects the page back to Yahoo.

#3. SOLD.com.au

SOLD was a major competitor to eBay in Australia. In April 2001, Yahoo bought SOLD and decided to leverage it against eBay. Forget competing but within two years Yahoo shut the company down and redirected users to eBay!

#4. HotJobs

Another very successful portal for job-seekers which Yahoo purchased for $436 million and almost 10 years later sold it for almost half the price at $225 million to Monster.com.

#5. Delicious Bookmarks

Delicious bookmarks had a great opportunity to grow and was purchased by Yahoo for a mere $15 million. Today rumours still circulate that it will be shut down by Yahoo. Yahoo, publicly maintains they are planning to sell Delicious.

The strange decline

Yahoo, has had a strange record of taking over companies or web services which are hugely popular and successful and then turning them into nothingness. This is where they have lost literally billions of dollars over the last decade.

Yahoo had advertisements on their search before Google did, they also had created Yahoo instant search but discontinued it in 2005. Today Google has done the same in 2010 and saw a rise in their AdWords clicks. I shudder to think what would have happened to Google if Yahoo had purchased it back in 2003. Would Google even exist going by Yahoo’s track record? I doubt it, Yahoo would have inefficiently dismantled it.

There is a downward spiral of Yahoo that has got so much momentum that it’s decline is almost certain. Unfortunately a company that could have shaped the history of the internet in a big way, will end up being a mere footnote 10-15 years down the line.

What are you views on Yahoo? Will it make a turn around, or will it eventually crash and burn completely? Do drop in your comments.