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.



Yahoo bought 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 it simply redirects the page back to Yahoo.



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

#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.


Sandeep Singh February 15, 2011

Well , interesting put up with very good facts. I agree that YAHOO is certainly not the yahoo , we knew around 5-6 years ago. But certainly it is not the end for them, still if they think well and plan !. I hope they do so, i love YAHOO !

Aditya Kane February 15, 2011

I am not sure about their future as they do not seem to have identified a core business around which they will grow.

Ajinkya March 1, 2011

I think yahoo messenger can be a core business for YAHOO because even when other chatrooms have opened …yahoo messenger still is the preferred mode of chat for many.

Aditya Kane March 2, 2011

thanks, glad you liked the post. Yahoo messenger can be a core business but I think Yahoo might have missed that bus considering how widespread the use of Skype is.

Mohul February 15, 2011

very interesting post Aditya..Yahoo had been the synonym of Internet as a medium for communication in the last decade.. however, its slow but steady demise is more or less.. caused by Yahoo only.. $100 billion valuation which it received around 10 years back was mainly because of illogical banner ads it received from big companies.. nd these banner ads were placed on its search engine.. and the thing which went wrong was.. Yahoo search sucked big time! Even Yahoo employees used Google search engine 🙂 do read this..

Aditya Kane February 15, 2011

$100 billion valuation was quite accurate, it was before the dotcom bubble but still it was decent valuation compared to how much capacity the internet had back then to grow. Yahoo also bought companies which could have ruled the internet. The problem with Yahoo probably is that they tried to do everything for everyone on the internet.

Ankit Das February 15, 2011

Interesting post, but certainly Yahoo has have made few basic mistakes of not pursuing even a single portal as their flagship business like Google and Facebook did. No doubt, Yahoo may decline in the future to end like the big ship Titanic!

Aditya Kane February 15, 2011

Fact is even today Yahoo does not seem to say what will be their core service around which they will build their company.

prabhakaran February 17, 2011

Nice Post. Amazing information!

Aditya Kane February 18, 2011

Thanks. Glad you found it interesting. 🙂

namita February 23, 2011

Really good information on yahoo empire history.

Aditya Kane February 23, 2011

Thanks, glad you liked it.

nicky February 24, 2011

intresting post

Ankit Saini February 27, 2011

Very sad news to me…

Ajinkya Uplekar March 1, 2011

Really amazing article.!!!

Shafeeque om March 12, 2011

You said it, but a wish that yahoo! will get back soon.

Robert March 15, 2011

I can remember when Yahoo’s founder Jerry Yang was featured on the cover of time magazine.

Yahoo died when they wanted $279 from webmasters for submission to their search engine directory.

Aditya Kane March 16, 2011

I remember a time when all that was interesting on the net was on Yahoo. Too bad its all crashing down.

mark July 7, 2011

It boils down to having a core competency i guess…
Google = Search
Yahoo = Master of none (going by all those acquisitions)

Aditya Kane July 7, 2011

yes, the old saying Jack of all trades master on none holds true for Yahoo.

Saurabh April 11, 2012

Yes yahoo is lacking a vision about its future. Yahoo has closed The Projector, The Set, The Amplifier & The Famous, 4 blogs wrapping television, movie, music & celebrity topics, in that order.

ram January 22, 2013

Yahoo will get back soon with colorful features and attract more customers