Yahoo Brand Check-up: The Front Door It Gave Away
In January 2000, Yahoo was worth more than $125 billion and was, for a time, the face of the internet. Today it is a private company owned by Apollo funds, which bought it with AOL for $5 billion in 2021. It still has a large audience. It no longer has the role that made it famous. This check-up looks at how that role slipped away.
Key takeaways
- Yahoo’s market value passed $125 billion in January 2000; in 2021 Apollo funds paid $5 billion for Yahoo and AOL together.
- Yahoo hired Google to power its search in 2000 and agreed in 2009 to run search on Microsoft’s Bing, giving others the core job of its front door.
- Its board turned down Microsoft’s $44.6 billion offer in 2008; nine years later, Verizon paid about $4.48 billion for the operating business.
- Under Apollo, Yahoo has cut back in ad tech and invested in news, including the purchase of the AI news app Artifact, announced in April 2024.
Download the full Yahoo Brand Check-up (PDF): vital signs, timeline, diagnosis, treatment and sources.
From peak value to private ownership
Yahoo began in 1994 as a web directory built by two Stanford graduate students, Jerry Yang and David Filo. By January 2000 its market value had passed $125 billion. In February 2008, Microsoft offered $31 a share, about $44.6 billion, a 62% premium to the previous day’s close. Yahoo’s board rejected the bid, saying it substantially undervalued the company.
Eight years later, Verizon agreed to pay about $4.83 billion for the operating business. After Yahoo disclosed large data breaches, the two sides amended the deal in February 2017, cutting the price by $350 million to about $4.48 billion. The sale closed in June 2017, and the listed company that kept the Alibaba and Yahoo Japan stakes became Altaba. In May 2021, Verizon agreed to sell Yahoo and AOL to Apollo funds for $5 billion, after spending about $9 billion to buy the two.
The symptoms
- About 900 million monthly users across Yahoo and its sister brands when Apollo’s purchase closed in 2021, against more than 1 billion for Yahoo alone in early 2016.
- Search handed to Microsoft’s Bing under a 10-year deal agreed in 2009.
- A $4.6 billion goodwill write-down by Verizon in 2018 on the media unit that held Yahoo and AOL.
- More than 1,600 job cuts in 2023, about 20% of staff, including more than half of the ad tech unit.
Diagnosis: the front door was run by others
Yahoo’s first job was helping people find things online. In 2000 it hired Google to power its search results. In 2009 it agreed to run search on Bing and keep 88% of search ad revenue on its own sites for five years. At the time, comScore put Google at 65% of U.S. search, against 28% for Microsoft and Yahoo combined. In our reading, each deal traded the brand’s core job for a near-term gain.
The second problem was focus. The business Verizon bought covered search, communications, content and ad tech, and it was merged with AOL into a unit called Oath. In December 2018, Verizon cut the goodwill value of that unit by $4.6 billion, citing competitive and market pressures that left revenue and earnings below expectations. A brand that tries to be the whole internet gives people no single reason to come back.
The third was trust. In October 2017, Oath said a 2013 attack had affected about three billion accounts, every Yahoo account that existed at the time. For a mail service, that goes to the heart of the promise.
Treatment under Apollo
Since September 2021, Yahoo has been a standalone company owned by Apollo funds, with Verizon keeping 10%. The new owner has narrowed the business. In 2022 Yahoo agreed to take nearly 25% of Taboola in a 30-year partnership, and in 2023 it said it would shut its Gemini native ad platform. In April 2024 it announced it had bought Artifact, the AI news app created by Instagram’s co-founders, and said Yahoo News ranked as the top U.S. news and information property in 2023.
These moves point toward fewer jobs done well. What we do not yet see is a plain answer to one question: why choose Yahoo over the default app on your phone?
What to watch
We would watch three signs: whether monthly users hold near the 2021 level, whether Artifact makes Yahoo News a daily habit, and whether direct and branded visits grow. Branded numbers need care, because branded search inflation can make paid results look stronger than they are.
What growing companies can learn
Know the one job customers come to you for, and do not hand it to a rival, even for good money. A regular marketing audit should show which product brings people in on purpose and which ones ride along. Treat security as brand work, because people judge the whole name by its weakest product.
This check-up uses public information available on May 7, 2024. It is brand and marketing analysis, not investment advice.
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