Business way: Yahoo! Secrets of the world's most popular Internet company. Anthony Vlamis, Bob Smith

This book is dedicated to your business success. I hope that its content, as well as the conclusions we have drawn from the analysis of the triumph of Yahoo! will inspire and guide you on the path to achieving all that you desire.
The fact that this book has gone from idea to its realization, I owe primarily to the devotion and support of my family. In particular, I want to thank my parents, Earl and Connie Smith, who stood by me through sorrow and joy, as well as my sister, Elaine Smith, who has always been a good friend and helper to me. Special thanks go to my partner, Tom Moffit, without exaggeration, best friend and helper for 14 years now. And last but not least, to our agent John Willig and also to my collaborator Tony Vlamis for his professional cooperation and friendship during this project and all possible future ones.
Bob Smith

I express my deep gratitude to all those without whose help and participation this book might not have seen the light of day. The two people who are most important to me: Connie, my wife, and son Stephen Alexander, who thought he'd write about Yahoo! it was very cool of me. Also to my parents, Steve and Anna, and to my sister Susan, who infected me with her enthusiasm. To our agent, John Willig, for getting us on this project. Special thanks to Alex Saenz for research and help writing Chapter 4, and to my co-author Bob Smith, a wonderful writer and partner and true networking friend.
Anthony Vlamis

Introduction Yahoo! We are rich!
Some say it was an accidental success. Others see it as a classic Silicon Valley spin-off story. And there are those who consider it the tales of Horatio Alger [1] of our time.
History of Yahoo! is quite worthy of presentation, as it includes many interesting facts and tells about the people who once came together and created this story. What began as a hobby of two Stanford University engineering students is today considered one of the world's leading Internet media companies, offering a high-quality network of advertising, commercial and communications services to more than 156 million users worldwide (Yahoo! FQ2 2000) through a growing global network that includes 23 network resources around the world.

Yahoo! continues to surprise investors with its explosive growth in both revenue and traffic. Between 1999 and 2000, revenues rose by as much as 110%, from $128 million to $270 million. At the same time, web page views increased by 40%, from 465 million per day in December 1999 to 625 million in March 2000.
Even more interesting to consider are Yahoo! in the amount of 86%. With $1.2 billion of cash on hand, the company has just $64 million in land, plant, and equipment.
That's a pretty impressive statistic for a company that, according to its founders, was originally just entertainment - a distraction from writing a doctoral dissertation. And of course, in the process of becoming, it brought great wealth to its founders. According to Fortune magazine's "Forty Richest People in America Under 40", 33-year-old David Filo, who owns a net worth of $3.12 billion, ranks fifth on the list. His partner, thirty-year-old Jerry Yang, is right behind Philo in sixth place with 3.05 billion.

Could such enormous wealth and astounding success come to them by accident? Is this really a typical American rags-to-riches story? And is Yahoo! is a typical example of the Silicon Valley zero to million business model?

We think that the development of Yahoo! had all of the above features. The company really started almost from scratch, and its first office was a student trailer. The people who founded the company were not rich and did not come from wealthy sections of society. And of course, we must admit that they still smiled luck.

But it is very important to note the fact that the leading principles that Yahoo! - created by its founders and supported by other people who hold key positions in it - are a valuable object of study in the management of the Internet system. If not for the foresight, competence and strategic skill of the people behind the development of Yahoo! and especially its two leaders, it would be a completely different story.

humble beginnings
Jerry Yang was ten years old when, along with his mother Lily and younger brother Ken, they emigrated from Taiwan to the United States (his father had died eight years earlier). The family settled in San Jose, California. Jerry's mother worked as a maid to provide for the family, and he himself easily entered the local school and became an excellent student.
Meanwhile, David Philo was living in Moss Bluff, Louisiana with a father named Jerry, who was an architect, and a mother, Carol, who was an accountant. Throughout his childhood, David's family lived in the community, sharing a garden and kitchen with six other families.

Jerry and David's paths didn't cross until years later when they met at Stanford University. Philo, who had completed a basic computer engineering degree from Tulane University in New Orleans, came to Stanford determined to pursue a master's degree in electrical engineering. Young, having completed a basic course in electrical engineering at Stanford, went on to study for a master's degree. Both received their degrees in the 1990s and soon settled down together in the same trailer on the university campus, becoming graduate students in electrical engineering. Young and Philo worked in the same electronic computer-aided design research group and worked part-time at Stanford.

Favorite hobby
While studying at the university, the Internet became a daily activity for both students, starting with e-mail correspondence and chatting at conferences. They then began using Gopher, a pre-Internet system developed at the University of Minnesota that allowed the contents of Internet servers to be organized and displayed on the screen as a hierarchically structured list of files. It wasn't until 1993 that they got their hands on the earliest version of Mosaic, the first web browser developed by the National Center for Supercomputing Applications. It was then that the future of Yahoo! appeared on the horizon.

By the end of 1993, Philo's personal list had over 200 selected websites. And Mosaic's "hot list" option could no longer organize so many web links into a view that was easy to see. Young and Philo then decided to write some programs to host, identify, and edit Internet content so that a growing list of sites could be sorted by subject areas.
The founders of Yahoo! themselves admit that they did not even think of making a business out of their occupation when they started creating the list. “David and I were just hanging around the Internet, compiling our own database of websites and clicking them on our page,” Young recalled in a 1997 interview with Money magazine. We had no idea that our list was of any value. We just loved doing it” (Money, October 1, 1997).
Philo agrees, noting that Yahoo! was just a tool for both of them to keep track of websites they found interesting. And at first they were not going to tell anyone about it. "Then it was just the two of us," Philo said during an interview for Sun Microsystems' "What's Happening" user newsletter in May 1995 (What's Happening, June 1995). But in the end, Young and Philo put their directory on the Internet using two of their student workstations, which they named after two famous Hawaiian sumo wrestlers. Young's computer, "akebono", maintained the original version of the directory, while Philo's computer, "konsiki", supported the Web search engine. But even then, they never once considered placing their directory on any other website. “A couple of our friends started using it,” Philo added. “Everything was transmitted simply by word of mouth, and sometimes people came to us through a link from their home pages.”

Although their directory (originally called "Jerry and David's Guide to the World Wide Web" before they renamed it Yahoo!) started as a hobby, not a business, its potential did not escape the attention of the two students. “I think we believed from the very beginning that the potential of what we came up with was huge,” Young told CNN correspondent Valerie Morris in 1997. “So David and I really considered it our hobby, our favorite thing to do, if you will, for almost a year and a half before we decided to take the risk and invest in it and try to start our own business.”

Development
Early 1995 was a key period in Yahoo!'s history. Marc Andreessen, co-founder of Netscape Communications, first offered Young and Philo the opportunity to transfer their files to more powerful computers in California. Mountain View offices. This move, according to Yahoo! turned out to be very profitable for both founders of Yahoo! and for the university, where they took a sabbatical (neither Young nor Philo ever completed a Ph.D.). Stanford's computer network, which had been under heavy load due to increased traffic to Phil and Young's directory, returned to normal with their departure. Even better, Yahoo! Andreessen was so impressed that he made it the default directory in his Netscape Navigator Internet browser. Avid Internet users flocked to the site, and the legendary status of Yahoo! began to take shape. The site was soon noticed by the business world as well.

Philo and Yanga were bombarded with business proposals. Netscape and America Online sent in messages suggesting that Yahoo! into their companies, but Philo and Young refused. "We didn't want to work for a big company," they explained during a 1995 Sun interview. – We thought