that our services would be more fruitful if Yahoo! remain an independent organization. So Filo and Yang took the risk of investing in their sites. Not a bad move, given the fact that early 1995 proved to be a very productive time for young entrepreneurs in the Internet-related fields. They had no problem with the number of interested subscribers.

Kleiner Perkins, Silicon Valley's biggest venture capital firm, was also interested in Young and Philo's work, but said they should team up with Architect (now known as Excite), another search engine built by Stanford students. Young and Philo refused. But when Mike Moritz, a general partner at California firm Sequoia Capital (which once funded Apple Computer and Cisco Systems), offered Yang and Philo a $1 million stake in their company, Yahoo! Inc. went up the hill.

Young and Filo say there were two reasons for their decision to work with Sequoia Capital: one, of course, was the firm's reputation and achievements, and the other was that the company was willing to support Young and Filo's idea to keep Yahoo! independent, and not to turn into an object of placement of securities. “Mike supported our point of view, which was to make Yahoo! a commercially viable company without undermining the concept that made it so popular,” Young said in an interview with Newsbytes News Network (April 20, 1995).

In the same article, Moritz, who is still a member of the company's board of directors, hails the vision and vision of the founders of Yahoo! which, he notes, were based on respect for the Internet community and concern for its needs. But the entrepreneur knew that there was something more behind his decision. Yahoo! attracted us not only by the vision of its founders, but also by the notable success that, apparently, came to Yahoo! overnight. We support David and Jerry's commitment to keep Yahoo! for all users,” Moritz said, adding that he believes that the gradual integration of advertising and sponsorship needed to make this investment profitable will not jeopardize the promise of the founders of Yahoo!.

Selection of talented personnel

With their funding secured, Yang and Philo knew they needed to recruit a team of talented people to make Yahoo! successful. Although they knew they needed employees to run the business, and both had already appointed themselves as company leaders, Young and Philo focused primarily on bolstering the science side to develop their directory. One of their first discoveries was Srinia Srinivasan, a former Stanford student who was an artificial intelligence specialist and who, along with the title of "Ontological Yahoo!" was tasked with organizing branching hierarchical structures to help people search for content. Today Sriniya Srinivasan is the Vice President and Editor-in-Chief of the company.

On the business side, Young and Philo knew they needed a management expert, and together with Moritz, they interviewed a lot of professional managers for the CEO position. The work was huge and at times very interesting, as some candidates were happy to share their thoughts on how they would redo everything if they had the opportunity. One told three employers that the first thing he would do was change the name of the company. Naturally, it was immediately deleted.

The search for the chief administrator in the end focused on Tim Kugle, a Stanford graduate engineer who, after graduating from university, was president of the Seattle-based Intermec Corporation that manufactures data acquisition and communication products. Kugle spent nine years at Motorola, where he held several executive positions in operations and corporate investment. In 1999, Kugle was appointed chairman, and he continued to combine both positions.

The latest addition to the original Yahoo! in mid-1995, Jeffrey Mallet, then vice president and general manager of Novell's global consumer alliance, became chief operating officer. Previously, he was vice president and founding member of the executive group of Reference, acquired in 1992 by Word Perfect Corp. In 1999, Mallett was named president of Yahoo!.

public domain

As soon as the leadership team was recruited and approved, the number of employed employees exceeded 100 people. And while the company hadn't made any notable profits yet, 1996 seemed like the best time to go public. That Yahoo! and did on April 11 when it floated 2.6 million common shares at $13 each. The first day of sales turned out to be a historic day as the stock rose 154%, breaking the record for Netscape's stock, which rose 105% on the first day. The market capitalization of the company was $848 million. Employees of Yahoo! were in ecstasy, and the management was a little worried when 35 million capital investments suddenly entered the company's account. As Young told Fortune magazine, he felt "panic - no, not panic, but anxiety" when he realized that Yahoo! now there are shareholders.

However, the next day, skepticism woke up among many shareholders, and they began to disappear. The stock fell to almost half its value before the close the day before, prompting Manish Shah, publisher of the Maven IPO, to derisively announce Yahoo! "Another Highly Publicized Fraud Offer," to paraphrase the legendary acronym for Yahoo! "Another Executive Hierarchical Helper".

The share price remained at the same level until the end of 1996, but with the beginning of 1997 it was made several improvements that have spurred the company's progress towards its current leading position. Yahoo! began to reap the rewards of her "guerrilla" marketing campaign. In January 1997 Yahoo! announced the registration of 550 advertisers. Even better, the company announced its quarterly profit of $92,000. And just three months later, Yahoo! proudly announced that the number of views of their web page by users reached one billion views per month.

End of story

Over the next three years at Yahoo! many things happened. We will refer to them again in the following chapters, as they serve as exemplary examples of the principles listed below that have guided Yahoo! in the past and now.

• Understand the needs of middle class users. As the initiators of the first Internet search engine, Young and Philo never lost touch with their audience or users, with whose support they built their company. They stayed true to their idea, which was to keep Yahoo! open to the public and support the independence that online service gives users.

• First people, then technology. Yahoo! had the best reputation and the worst technology base when the company got into search engine development. But Yang and Philo never wavered from the belief that the human factor involved in the categorization process would eventually succeed. And so it happened.

• Build local communities in the global community. The Internet is indeed a worldwide network, but Yahoo! noticeably gained momentum, creating local sites in the United States, which were later expanded to a worldwide audience. The founders believed that this was an essential factor in making the service offered not just an online resource, but also a "purpose of destination".

• Give users multiple reasons to visit again. Being user-centric has been a critical part of Yahoo!'s success. and the first step in this direction was the creation of the My Yahoo! service. Plus a growing array of services for the younger generation of Internet users, as well as for business and commercial purposes. This is one of the most important reasons why traffic growth has left all competitors far behind, and this is also the key to the fact that Yahoo! continues to hold the first place in terms of the average length of time a user stays on the site among all websites that hold the record for traffic.

• Partnership with the best. Yahoo! takes its independence very seriously. That's why the company has a huge and growing list of companies that Yahoo! has partnerships to provide the services and information users need. Everything is designed to support the development mission of providing users with "the best possible web software".

• Buy what you need. Sometimes it is better to buy a technology or service that is needed at the moment. The point is to avoid unnecessary acquisitions that may not be profitable for the company. Over the past three years, Yahoo! bought 14 companies, and each acquisition brought real value to the company and its shareholders.

• Become a brand. According to Philo, the most important factor in the success of Yahoo! became the name. It was memorable even if people had no idea what the company was doing. Now Yahoo! managed to become a world famous brand as an information channel.

• Advertising, advertising and more advertising. Starting with its catchy slogan Do you Yahoo? и до более эклектичных рекламных трюков, таких как парашютисты, совершающие онлайн-покупку, или служащие, делающие себе на разных частях тела татуировку в виде логотипа компании, компания никогда не изменяла своей стратегии, девиз которой Yahoo! everywhere." And the company has successfully developed, avoiding excessive commercialization.

• Creation of dynamic corporate development. While every company needs some form of structure to succeed, Yahoo! created a fairly even organization with no discernible hierarchy. The work is dynamic, employees are satisfied with their profits. And decisions are made on a democratic basis.

• Stay in good shape. Yang said that Yahoo! is the business of tracking change. But the company also understands that the Internet continues to change as it gradually becomes a medium of mass commerce. Competitors lie in wait everywhere, and one should be flexible and able to transform the services provided and search for new ones. markets to meet the changing requirements and needs of users.

Yahoo! Sequence of Key Events

1990 Jerry Yang and David Filo received a master's degree in electrical engineering from Stanford University and later became members of the Stanford research team as PhD candidates.
1993 Yang and Philo began