Yahoo! Inc.
| Author | Chris Amorosino, Ed Dinger, Mark Lane |
| Pages | 1849-1857 |
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701 First Avenue
Sunnyvale, California 94089
USA
Telephone: (408) 349-3300
Fax: (408) 349-3301
Web site: www.yahoo.com
Yahoo!, one of the early stars of the Internet, was launched in 1993 as Jerry's Guide to the World Wide Web, offering early users of the Web a way to navigate the quickly expanding Internet—in effect a table of contents. The company's founders soon dropped the name "Jerry's Guide" in favor of something more memorable, Yahoo!, an acronym for Yet Another Hierarchical Officious Oracle. To build the fledgling brand, in April 1996 the company released the "Do You Yahoo!?" marketing campaign.
The $5 million effort included television, radio, and print elements. One of the most memorable of the television spots, which aired in 1997, featured a balding young man using Yahoo! to search for a cure for his thinning hair. The final shot of the spot showed him strutting down the street with a huge, bushy Afro, turning the heads of his fellow pedestrians.
The "Do You Yahoo!?" campaign succeeded in raising the brand recognition of Yahoo! and attracting more visitors to the Web portal. In the late 1990s Yahoo! was far and away the most valuable Internet business, with a market value exceeding $4.3 billion. Yahoo! Stumbled when the Internet sector crashed in the first few years of the new millennium, and its search-engine business was surpassed by a new rival, Google. But Yahoo! was able to rebound and continued to market its portal with the "Do You Yahoo!?" campaign until 2004.
In 1993 Stanford engineering student Dave Filo's personal list of favorite websites had grown beyond 200 "bookmarks." He and fellow engineering student Jerry Yang wrote software that grouped their favorites sites into convenient on-screen folders. When they posted their list on the Web under the title "Jerry's Guide to the World Wide Web," people all over the world contacted them to say thanks. It was the Web's first table of contents.
Filo and Yang then planned to visit and categorize 1,000 websites a day. They decided to avoid the engineer's natural impulse to automate the process, instead throwing tremendous hours of human labor into the project. Yang hated the name "Jerry's Guide," so he and Filo followed the technology community's affinity for acronyms and came up with Yahoo! which stood for "Yet Another Hierarchical Officious Oracle."
Yahoo!'s distinguishing founding idea was using a cadre of professional Web surfers to organize a directory of websites into coherent categories. This approach differed from competitors like Excite (then called Architex), which relied on Web-scouring software to view and catalog. According to Fortune magazine, "Yahoo! had the best name, the worst technology, and a quaint belief
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that while other companies' machines were able to survey website addresses by the thousands every second, the human touch could somehow win out."
In 1995 Netscape and America Online both offered to absorb Yahoo! Yang and Filo declined but later signed with Sequoia Capital. Sequoia put up $1 million, which grew to $560 million by the end of 1997. Among the strong competitors that emerged were Excite, developed by another group of Stanford graduate students, and Lycos, which was developed at Carnegie Mellon.
But while human intelligence gave Yahoo! the early lead among Web search engines, what enabled Yahoo! to far outdistance the pack was a rapid rollout of E-mail, financial services, and a strong marketing effort. According to Fortune, in the first quarter of 1996 Yahoo!, Lycos, Excite, and Infoseek all delivered roughly the same number of pages. By the end of 1996, however, Yahoo! delivered twice as many pages as second-place Excite. By the third quarter of 1997 Yahoo! visitors looked at 50 million pages a day—more than the other three search engines combined.
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"Do You Yahoo!?" aimed to attract those people who intended to go online, an estimated 18 million people in 1998, according to IntelliQuest. Karen Edwards, Yahoo!'s director of brand management, referred to the company's target market as Internet intenders or near-surfers. This market's demographics skewed toward educated, affluent males, generally in the 25-54 age range. As time went on and women gained more interest in the Internet, the target group broadened to include them, and in the 2000s the ongoing campaign targeted a mass audience, touting Yahoo!'s wide range of services. Moreover, as Yahoo!'s overseas traffic increased, the campaign had to be adopted to different cultures and translated into various languages, although "Do you Yahoo!?" tested much better in English than translated.
In 1997 Yahoo! and other high-tech advertisers were counting on television to expand their markets. In May of that year BusinessWeek reported that 40 percent of U.S. homes had computers, but annual growth was down
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from the 20-30 percent clip of the past few years to about 13 percent. Yahoo! and others used advertising to show the ease and advantages of going online, in hopes of drawing more and more people into the Internet services market.
Yahoo!'s strengths against its competition included a huge lead in market capitalization and its reputation as being tops in the search, finance, and news areas. Lycos was more aggressive than Yahoo! in pursuing acquisitions that added new services and broadened its market appeal. Lycos also chose to link separately branded sites to serve different demographic segments. Infoseek and Altavista benefited from the massive shadows of their owners, Disney and Compaq respectively.
Excite had strong health and search features and was the Web page for Dell's PC buyers. In October 1996 Excite introduced a $10 million campaign from Foote Cone & Belding featuring the Jimi Hendrix song "Are You Experienced?" On December 7, 1998, Excite premiered a new network and cable television campaign. Six 30-second commercials showed people botching common activities in embarrassing, humorous ways. One spot told viewers that the woman pictured could send photographs to friends around the world using Excite. She then walked through a screen door she had just closed. In another spot a man was all thumbs as he installed an air conditioner only to watch it plummet from his window. The spots ended with the suggestion that if this person could use Excite "you can too."
By 1998 Yahoo!'s growth and success had moved it into the domain of a new set of competitors. The company was being viewed as a key part of the computing establishment and a great destination for Web users. It felt less like a search engine and more like an online service. The competition grew to include Microsoft and America Online (AOL). Microsoft was spending $61 million on television spots built around its theme "Where do you want to go today?" Trying to outduel Microsoft, AOL spent about $66 million on television advertising. AOL's advantages included billions in monthly Internet user fees and the longest track record as a content aggregator.
In 1998 NBC launched a television campaign for its Web portal company Snap!. The commercials used the tagline "Don't Suffer from Information Overload. Snap! Out of It." A 1996 multimillion dollar campaign from Infoseek appeared regularly in full-page ads in the Wall Street Journal. All told, at one point in the 1990s Yahoo! had to contend with nearly 60 different competitors, yet its chief rival had yet to emerge: Google, the search engine that turned itself into a verb, something Yahoo! had...
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