The rise and fall of Yahoo
Yahoo announced that it will sell its core assets to Verizon for a mere $4.8 billion. This is only slightly more than Verizon paid for AOL — another washed up dot-com-era company — last year. Yahoo’s market capitalization reached $125 billion in 2000. Over the next 16 years, it steadily tumbled — mostly due to inaction and missed opportunities. You could fill an entire MBA course with case studies of all the strategic blunders Yahoo has made. I’ll save you some student debt and give you the skinny right here, in just 5 minutes. Mistake #1: Yahoo confused being in the right place — at the right time — with being smart. If Yahoo had launched a year or two later, they probably would have been irrelevant. They rose to dominance in large part by benefitting from what Y-Combinator cofounder Paul Graham — who worked there — called a “de facto ponzi scheme”: “Investors were excited about the Internet. One reason they were excited was Yahoo’s revenue growth. So they invested in new ...