Inside Yahoo! Reinvention and the Road Ahead

290 Pages·2002·0.69 MB·English

by  Karen Angel

Inside Yahoo!
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Reinvention and the Road Ahead
K A
AREN NGEL
John Wiley & Sons, Inc.
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Inside Yahoo!
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Inside Yahoo!
(cid:1)
Reinvention and the Road Ahead
K A
AREN NGEL
John Wiley & Sons, Inc.
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Copyright © 2002 by Karen Angel. All rights reserved.
Published by John Wiley & Sons, Inc., New York.
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Preface
F
“ aced with the prospect of showing up every day at a small
desk and laboriously manufacturing a lengthy document
with hundreds of footnotes, the human spirit seems to gravitate
toward other distractions.”1 That’s how Jerry Yang and David
Filo explain the origins of the “distraction” from finishing their
electrical engineering Ph.D.s that turned into a $130 billion com-
pany at its height and a wildly popular Web directory right
from the start. “Part of their success was due to the intensity
with which they tracked down Web pages, and part of it was
due to their timing,”2 they admit in Yahoo! Unplugged (IDG
Books, 1995), coyly referring to themselves in the third person.
Like Yang and Filo, I know all about laborious manufactur-
ing and lengthy documents, but for me there was no escape
hatch. My book is the story of the Internet symbol that sprang
from a trailer on Stanford University’s campus and the brains of
two tech talents, an extrovert from Taiwan and an introvert
from Moss Bluff, Louisiana. But it’s the story of Yahoo with one
big difference: Unlike other such accounts, mine is informed by
key players who have rarely or never been heard from before—
among them, the interim-management team that got Yahoo up
and running and was later relegated to invisibility by the com-
pany’s principals, the Reuters exec whose investment gave him
a plum vantage point on Yahoo’s board of directors, a manager
who headed e-commerce and Yahoo Finance business develop-
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PREFACE
ment for the company, and Yahoo’s own M&A specialist, who
orchestrated all its acquisitions, including the controversial
GeoCities and Broadcast.com buys.
Yahoo itself declined my request for participation—not sur-
prising for a company that has gone from basking in the
overblown praise of Wall Street and the media to squirming un-
der the harsh spotlight cast by unhappy investors and critical
journalists. “Once again Yahoo! knocked the ball out of the
park,” gushed Credit Suisse First Boston analyst Lise Buyer in
October 1998. “We are raising our estimates (yet again).”3 In
June 1999, Fortune magazine beamed, “The company’s execu-
tion so far has been picture perfect.”4
Fast-forward to March 2001, when the Wall Street Journal
trumpeted, “Yahoo! Inc. has seen the enemy—and it is them.”5
BusinessWeek, which had dubbed Yahoo “the lord of the Web”6
back in September 1998, came out with “Inside Yahoo!: The Un-
told Story of How Arrogance, Infighting, and Management Mis-
steps Derailed One of the Hottest Companies on the Web.”7
Today, Yahoo is struggling to win back its pampered-pet sta-
tus and reverse that trajectory of all-important indicators—
stock price, revenues, reputation. The last thing it needs is a
reporter putting a period, an exclamation point, or any other
full-stop punctuation on its story while the ending is so ambiva-
lent. (Speaking of punctuation, for the sake of simplicity and to
take it easy on my readers’ eyes, I’ve dropped the exclamation
point after the company’s name.) But again, like Yang and Filo, I
believe in my timing, and that the crossroads where Yahoo now
finds itself is a good place to stop and take stock.
KARENANGEL
New York, New York
March 2002
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Acknowledgments
I
’d like to thank former Fortune staff writer Jodi Mardesich
and former Industry Standard senior writer Laura Rich, my
unofficial coauthors—and eyes and ears in San Jose and Los An-
geles, respectively—for all their help.
Thanks to Ethan Schwartz for elucidating the finer points of
cash burn.
And thanks to my mother for all her weather reports, with-
out which I surely would have frozen years ago.
K.A.
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