Yahoo started small and grew fast

Microsoft has offered to buy Yahoo for US$44.6 billion -- but how did a company that started so small come to be worth so much? That's a story that began in the early days of the World Wide Web, when people were struggling to keep track of the new world of multimedia it offered them.

In those days people viewed the Web through NCSA Mosaic, a browser that helped popularize the Web; they could check the level of coffee in the Trojan Room coffee machine at Cambridge University using the first Web cam on the Internet, and they could read the headlines on the NandO Times, one of the first "new media" operations.

Yahoo first appeared on the Internet in 1994 when Jerry Yang and David Filo were still at Stanford University -- something that was immediately obvious from the site's first address: http://akebono.stanford.edu/yahoo/ . It wasn't until later in 1994 that the easier-to-type http://www.yahoo.com came along, but even then it redirected to the Stanford server.

But back in 1994 people weren't that concerned about clunky addresses. They'd been living with the text-based Internet for years and the Web with all of its richness had people hooked. Yahoo stepped in to solve an early problem: how could users keep track of the fast expanding World Wide Web.

What Yang and Filo built was revolutionary for the time: a hierarchical index of the Web divided into subjects like "computers," "government" and "society and culture." (The service lives on today as the Yahoo Directory)

From the early days it was clear that users loved Yahoo.

"David Filo and Jerry Yang should be given a Medal of Honor, then locked in a room and never allowed to get lives: they are already doing an excellent job of categorizing the Web with Yahoo's Hostlist," wrote one user in response to a Sept. 1994 Usenet posting asking for a directory of Web sites.

Word of the service spread through the Internet, often from enthusiastic users passing on details of the resource, but sometimes with a little promotion by Yang and Filo themselves.

"We have a pretty comprehensive listing at the Yahoo Database," wrote Yang on Usenet in Sept. 1994. "It's an attempt to be organized by subject (although not very well) -- but we are working on it. Searchable too," he wrote.

All the time Yang and Filo continued to live everyday lives, unaware they would become billionaires in less than a decade. A look at old Usenet postings reveals Yang campaigning for fair funding for college students while Filo was trying to trade World Cup tickets online.

As 1995 began, Yahoo was serving up 200,000 pages per day from its index of about 25,000 Web sites, and was about to hit the big time. During that year Yang published a book about Yahoo and earned an interview on National Public Radio's Fresh Air. Both cofounders appeared on a PBS Frontline TV documentary about the Internet called "High Stakes in Cyberspace."

"What Yahoo does is make your wasting your time easier. It wants you to get where you want to go to waste time faster so you don't have to waste time wasting time," is how Yang explained Yahoo in the documentary, according to a transcript of the show.

The IDG News Service is a Network World affiliate.