5 Biggest Blunders Of Yahoo That Caused Its Downfall


Despite having maximum traffic and being the most popular search engine of its time, Yahoo gradually lost its user base and has finally been sold to the telecom giant Verizon. The Yahoo website was cluttered with so many bits and pieces. This was not appealing to many people, so they shifted to other search engines like Google. The fall of Yahoo is harrowing to relive because the company was so close to basically owning our entire online life in the late ’90s.


Founded in 1994, Yahoo was one of the last independently operated pioneers of the web.  Started primarily as a web directory, the company soon expanded to many fields, offering searches, email, shopping, and news. It’s been a long decline since then as the company made mistakes and alienated its users and the companies it acquired. Here is a list of 5 mistakes of Yahoo which caused its fall:


1. Not Buying Google


In 1997, Yahoo turned down the offer of buying Google for just $1 million because Yahoo didn’t want to direct traffic from its websites. Five years later, Yahoo had yet another chance to buy Google. This time, Yahoo was already using Google’s technology for its search engine. Then CEO Terry Semel refused to buy Google for $3 billion, even though advisers said it was worth at least $5 billion. The deal was not accepted by Google, which later became a significant reason for the fall of yahoo.


2. Missing Out On Facebook


Yahoo had a chance to buy Facebook in 2006 for $1 Billion, but because of depression in stocks, Yahoo lowered its offer to $850 million. This resulted in Facebook CEO Mark Zuckerburg rejecting the deal. Later Facebook went on to become the most significant Social network and, along with Google, caused the fall of Yahoo.


3. Rejecting Microsoft’s Buyout Offer


In February 2008, Yahoo declined a $44 Billion offer from Microsoft, citing it to be “too low.” Yahoo, at that time, failed to recognize its falling popularity and did not make any attempts to reinvent itself to survive in the competition. The offer of Microsoft was almost 10 times what it got from Verizon now.


4. Aborted Projects


The history of Yahoo is rife with projects that were started, with great fanfare, only to be aborted months, sometimes years, later. The company’s failure to manage and utilize the assets it acquired, despite having its vast user base, represented another huge missed opportunity that could have helped Yahoo regain its position on the present-day internet. Soon, cloud computing will be the name of the game, but Yahoo did not initiate any steps to conceptualize a cloud-computing environment.


5. Not considering Itself A Tech Company


Yahoo had constantly been confused as to whether it’s a media company or a tech company. It made money through ads rather than software, so it considered itself a media company, but it often operated like a tech company. Experts also assert that in the beginning, Yahoo was scared of being crushed by Microsoft. It went the tech way. Unlike Facebook, Google, and Microsoft, who created hacker-centric cultures that valued competent technologists and hired the best programmers, Yahoo put everything in the hands of ‘product managers’ and ‘designers.’ This finally proved fatal to the company, which ended up being sold.

Yahoo has now reached the dead end as an independent company because of these mistakes. This strengthens the notion that companies need to constantly reinvent themselves without being too confident about their current standings to survive the ruthless competition. Yahoo, Nokia, and Orkut are the most significant examples that prove that even the mightiest can become extinct in no time if they do not change themselves with time.

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