History and growth of yahoo

Early history (1994–1999)
Yahoo! co-founders Jerry Yang (left) and David Filo (right)

In January 1994, Jerry Yang and David Filo were Electrical Engineering graduate students at Stanford University. In April 1994, "Jerry and David's Guide to the World Wide Web" was renamed "Yahoo!", for which the official backronym is "Yet Another Hierarchical Officious Oracle".[11][12] Filo and Yang said they selected the name because they liked the word's general definition, which comes from Gulliver's Travels by Jonathan Swift: "rude, unsophisticated and uncouth".[13] Its URL was akebono.stanford.edu/yahoo.[14]

The Yahoo! domain was created on January 18, 1995.[15] Yang and Filo realized their website had massive business potential, and on March 1, 1995, Yahoo! was incorporated.[16] On April 5, 1995, Michael Moritz of Sequoia Capital provided Yahoo! with two rounds of venture capital, raising approximately $3 million.[17][18] On April 12, 1996, Yahoo! had its initial public offering, raising $33.8 million, by selling 2.6 million shares at $13 each.

Like many web search engines and web directories, Yahoo! diversified into a web portal. In the late 1990s, Yahoo!, MSN, Lycos, Excite and other Web portals were growing rapidly. Web portal providers rushed to acquire companies to expand their range of services, in the hope of increasing the time a user stayed at the portal.

On March 8, 1997, Yahoo acquired online communications company Four11. Four11's webmail service, RocketMail, became Yahoo! Mail. Yahoo! also acquired ClassicGames.com and turned it into Yahoo! Games. Yahoo! then acquired direct marketing company Yoyodyne Entertainment, Inc. on October 12. On March 8, 1998, Yahoo! launched Yahoo! Pager,[19] an instant messaging service that was renamed Yahoo! Messenger a year later. On January 28, 1999, Yahoo! acquired web hosting provider GeoCities. Another company Yahoo! acquired was eGroups, which became Yahoo! Groups after the acquisition on June 28, 2000.

When acquiring companies, Yahoo! often changed the relevant terms of service. For example, they claimed intellectual property rights for content on their servers, unlike the companies they acquired. As a result, many of the acquisitions were controversial and unpopular with users of the existing services.