It began as a college start-up before it became a giant in the Internet world.

But with its recent problems and increasing competition, is Yahoo on its way to becoming irrelevant?

How It Started

The company began innocuously, with Stanford graduate students Jerry Yang and David Filo browsing around in 1994 the then new world of the Internet. Yang then began posting random stuffs online, including his golf handicap, his name in Oriental characters and a list of all the websites he follows. Soon, he organized these into a list of other websites, naming it Jerry and Davids Guide to the World Wide Web. These garnered the attention of other users as it provided an easy link to other useful and relevant sites. Barely two months later, the site had been renamed as Yahoo, an acronym for Yet Another Hierarchical Officious Oracle. It was also a slang for rural Southerners, a description applied to Filo by his girlfriend back in college. The company grew fast in a short amount of time. Before the end of the year, Yahoo was already experiencing more than a million hits in one day. Yang and Filo recognized this unique opportunity and got support from Sequoia Capital, which invested $2 million in the company.

Yahoo quickly became one of the most popular sites in the Internet. It employed around 50 people by 1996, with these people tasked to add sites to the directory. That year, the company had its initial public offering, raising $33.8 million in the process. By 1999, both Yang and Filo were worth more than $8 billion each. Yahoo stocks were trading at $118.75 per share in the beginning of 2000. The company became so strong that it rendered its competitor, AOL, useless.

Then Came Google

Google came along just as the dotcom bubble was about to burst. These twin scenarios hit Yahoo hard. Google proved itself to have a better and simpler search engine that spits out relevant results. Google also made use of Internet crawlers that yielded automatic results. At that time, Yahoo was still using humans to add to its directory. Around that time, the dotcom bubble also burst. From the $118.75 per share in January 2000, Yahoo stocks dipped to as low as $4.05 per share barely 21 months later in September 2001.

With Google growing cheaply because of its superior search engine and cheaper overhead costs, Yahoo was forced to lay off some of its workers.

Keeping Calm and Surviving

Still, Yahoo survived this onslaught. It recognized its problems and took a strategy of both confrontation and collaboration. It even made use of Googles search engine starting in 2000 as Yahoo developed its own technologies for its search engine. This was then launched in 2004. It also expanded its role in the Internet by gobbling up smaller companies in allied fields, like Hotjobs, a job finder in the web, Oddpost, a provider of webmail services, and Flickr, a popular photo-sharing website. It also enhanced its web portal by partnering with different content providers from around the world. Information was categorized into Yahoo! Sports, Yahoo! Music, Yahoo! Movies, Yahoo! Finance, Yahoo! Weather, Yahoo! News, Yahoo! Games and Yahoo! Answers. It also added a personalization service called My Yahoo!, which allows users to create their own combination of all their favorite features, content, information and feeds into a single page.

It also enhanced its Internet communication services, like Yahoo! Messenger and Yahoo! Mail, with Yahoo! Mail facing Googles Gmail service challenge head on by offering

unlimited data storage. It also provided social networking and user-generated content services, like My Web and Yahoo! Personals. Yahoo also provided shopping services like Yahoo! Shopping, Yahoo! Autos, Yahoo! Real Estate and Yahoo! Travel, which allows users to garner important information and conduct commercial purchases and transactions online, it even briefly had an eBay style service called Yahoo! Auctions, but this was discontinued in 2007, though the service was maintained in Asia. By 2007, Yahoos share of all online searches stood at 22 percent. This was still way behind Googles 54 percent, but substantially ahead of Microsofts paltry 10 percent. During the first quarter of 2008, Microsoft offered $45 billion to take over the entire Yahoo group.

Missteps and Miscalculations

Yahoo has had its share of missteps and miscalculations. Several of its products and services were forced to close down in the past few years, like Yahoo! 360, Yahoo! Buzz, MyBlogLog and several others.

It bought the popular web hosting service called Geocities in 1999, only for it to close shop a decade later, thus deleting a huge amount of information from seven million web pages. It also had a brief phone application that ran on Java called Yahoo! Go, but this was closed in 2010.

Other discontinued services from Yahoo include Yahoo! Tech, Farechase, Audio Search, My Web, Pets, Kickstart, Live, Briefcase and Yahoo! for Teachers. it also ran a geo-tagging website called Yahoo! Koproi, but this was discontinued as it did not help with the companys bottom line, with most of its users based in Indonesia. But it is its rejection of Microsofts offer to take over for $45 billion that may loom a large dark shadow over Yahoo. Microsoft had dropped the offer due to disagreements in the amount involved. Yahoos share price slowly but surely dipped. While Microsoft came back with newer offers, all of them were at substantially lower amounts. It moved the billionaire investor named Carl Icahn to lambast Yahoo for its corporate irresponsibility in rejecting the original offer made by Microsoft.

In 2008, Jerry Yang stepped down from his post as Chief Executive Officer, though he did retain the title of Chief Yahoo. He is still involved with the company, though at a much lower level. In 2010, Yahoo decided to power its search engine using the facilities of Bing, the new search engine created by Microsoft. Such is the dizzying ride of Yahoo. The college start-up turned Internet giant may soon follow the footsteps of AOL, the company that Yahoo consigned to irrelevancy back in its heyday.

Marissa Mayer has been Yahoo's CEO for one year, and in that time she's made 17 acquisitions, changed several staff policies and updated most of Yahoo's services, but her spending has only been possible through smart investment in Alibaba Group eight years ago.

Marissa Mayer, 38, has been Yahoo CEO for one year and has made 17 acquisitions in that time. (Credit: Reuters) Saying the last 12 months have been a busy year for Marissa Mayer is something of an understatement. In that time, Google's 20th employee became Yahoo's fifth CEO in as many years, gave birth to a baby boy, banned Yahoo staff from working at home (but gave them all an iPhone, Up fitness band and free lunch), oversaw the acquisition of 17 companies and convinced investors her internet dinosaur was far from extinct. But none of these changes, nor the updates to Yahoo's home screen, email service, Flickr photo-sharing app, or the blockbuster $1.1bn (730m) buyout of Tumblr are why the company's share price is up 70% year-on-year. Investors have co-founder and former CEO Jerry Yang to thank for that, as it was he who saw potential in small Chinese company Alibaba in 2005, into which he invested $1bn for a 40% stake, and out of which Yahoo pocketed $7.6bn when it sold 17% of the company earlier this year. When Mayer, 38, took over at Yahoo last July she told her staff there is "an enormous amount of opportunity" in front of them, but despite the headline acquisitions and policy changes it is Yahoo's stake in Alibaba which is keeping it alive and bankrolling those 17 acquisitions while ad revenue continues to slide.

A future full of personalisation, daily apps and beauty When Mayer eventually disclosed her plans for Yahoo! she said its future would be very personalized, and content and mobile focused. Speaking earlier this year at a World Economic Forum event in Davos, she stated that Yahoo!s job was to order the web for users on desktop and mobile. With the web becoming so vast, theres so much content and theres so much social context, and now with mobile, theres so much location context and activity context, she said. How do you pull all that together? In Yahoo!s eyes, through a feed of information that is ordered. The web is ordered for you and is also on your mobile phone. Since taking over Yahoo!, Mayer has revamped some of the companys offerings, cut out a fair number of its apps and introduced users to some beautiful experiences. For instance, the companys weather app, launched earlier this year, plugs into Flickr by pulling user photos to help depict the current weather. Flickr has always been one of Yahoo!s best products and its revamp has been a welcomed change that users have been waiting for. The mission is to make Flickr desirable by making it beautiful, easy to use and mobile. So Mayer made it so: were thrilled to take Flickr even further with a beautiful, completely re-imagined experience that puts photos front and center, she wrote when the revamped site launched. When it comes to photography, technology and its limits shouldnt hinder the experience. So were also giving our Flickr users one terabyte of space for free.

Flickr truly is a breath of fresh air and quite mesmerizing. Its simplicity of use and effortless beauty rivals that of Instagram. It seems Yahoo! decided to allow the extraordinary talents of

photographers to explode on the well designed site and app. This beauty ties in seamlessly into its weather app, this app makes checking the weather a stunning experience, it allows to explore cities not just the climate. That being said, Flickrs architecture feels like its creaking underneath the beauty, search, set management, browsing and relevance are still an issue. And with those two apps it became obvious that Yahoo! has gotten into the business of beauty. Every app that has been released since Mayer joined has emphasised simplicity, a lesson from her Google days no doubt. Even Mail looks quite tempting these days, a tad Gmail(ish) but tempting still, and that is saying something. There is a freshness about the company that means die-hard fans like my father and sister are beginning to feel that their dedication is paying off. It seems that Yahoo! is finally thinking about providing its users with an experience rather than a just a web service that happens to have other stuff too. Changes like these harken good tidings for the company. They tell the world that it is finally ready to get back to the table it help build. But is it too late? There are more dominant, more liked and wildly successful companies that have been succeeding at this for a while now: Google, Facebook and Instagram. In startups we trust: a tale of many acquisitions Yahoo! has a lot of money, which is odd because its stocks arent that great, and it has been on a buying spree that would put Becky Bloomwood to shame. It has spent a lot of money on Tumblr, Summly, Snip.it, Loki Studios, GhostBird Software, Stamped and OnTheAir. The company has bought around 14 companies in the last year, double what it acquired between 2010 and mid 2012. I suppose thats what happens when you sell off some your stake in a rather profitable Alibaba. When you look at the types of companies that Mayers Yahoo! is buying it is clear that the company is prepping itself for a social, mobile and content-driven future quite in line with the CEOs plans. When Yahoo! announced its acquisition of Tumblr, Mayer said that the blogging platform was redefining creative expression online: On many levels, Tumblr and Yahoo! couldnt be more different, but, at the same time, they couldnt be more complementary. Yahoo is the internets original media network. Tumblr is the internets fastest-growing media frenzy. Both companies are homes for brands established and emerging. And, fundamentally, Tumblr and Yahoo! are both all about users, design, and finding surprise and inspiration amidst the everyday. So Yahoo! wants to meet todays media where they are while creating a home for brands as well as being part of your daily expression. It makes sense, though Yahoo! is still a powerful company, it hasnt been very relevant in a long time. Aligning itself with successful and sexy startups (Summly and Tumblr) makes getting back to the table a more manageable journey. According to The Wall Street Journal, Yahoo! has already demonstrated staying power over the last few years and spending over a billion on Tumblr shows a significant power shift on the companys part. Though there are risks, what Yahoo! currently lacks is youth power, something Tumblr has in droves. The quest for cool is indeed a desperate one, Yahoo! is

rumored to be bidding for video streaming service Hulu as well, but whether it can fork out the millions for that after the billion on Tumblr remains to be seen. It takes more than pretty and startups to make you cool again The company has said or done very little search in the last year and its finance app, possibly its best tool, seems to have just been left as is maybe that is for the best. Though video and news startups have been acquired, Yahoo! isnt making any big noises around revamping Yahoo! News. Perhaps the company has given up its fight on search (it does Piggyback off Bing after all)? Might be for the best that one. But theres still a sense that Yahoo! is struggling with its identity. Is it a tech company or a media company? It may not want to be a media company, but it actually still is and needs to figure out how all that fits in with its new vision. Here is what I see: a company trying to fight its way back from the depths of irrelevance. Yahoo! isnt a dead company: anyone that can afford to pay a billion dollars for something that barely makes money isnt out for the count. What Yahoo! is, is a not so popular big-butnot-mega internet company. It has dedicated users but does not have the cult following of Google, Facebook and Apple. Mayer is working hard to bring the company back, culling useless apps and launching more user-demanded ones is a good start in the trek out of oblivion. But is a buying spree really the answer? No one really knows what Yahoo! is up to with all these purchases. A strong mobile, social and media focus seems to be coming through but is it enough? This has been Yahoo!s problem in recent years, trying to be both a tech and media company. Mayer hasnt really given a concrete distinction of which she would like to be. For now it just seems to be case of I got dollar dollar bills so buy buy buy.

Yahoo fights back

Yahoo reported mixed financial results in the second quarter of 2013, with ad revenue declining but profits rising 46%, as the internet giant continues its fight back against the likes of Google and Facebook.

The news comes as chief executive Marissa Mayer marked one year at the helm of Yahoo, embarking on a series of acquisitions, while scaling back on less profitable areas and focusing on content, mobile and video. The results were the first since the company acquired blogging platform Tumblr for $1.1bn (73m) in June. Profits were $331m, up 46% from the same time last year. The rise was due mostly to the company's investment in Chinese ecommerce site Alibaba. Display advertising revenue fell 13% in the quarter, while search revenue was down 9%. Commenting on the results, Mayer said: "We reached a pace of launching a new product almost every week," said Ms Mayer during a webcast to discuss the company's earnings. As you can tell, we've been busy." According to research firm eMarketer, Yahoo's share of global digital ad spending is expected to decline to 3.1% in 2013 from 3.37% last year. In the US, eMarketer estimates that Yahoo's share of US digital ad revenues will decline to 8% from 8.6% in 2012. Yahoo bought nine technology start-ups in the past quarter, including Tumblr and Summly, bringing the total to 17 acquisitions under her watch. Yahoo hopes this will diversify its base, attract engineering talent and boost company morale. Mayer also mentioned an improved environment at the company, noting that in the second quarter, attrition - that is, employees leaving the company - declined by 59%. She also noted that more than 12% of new hires in the past year were boomerangs - that is, people who left Yahoo only to come back.
Significant chunk Of the $390m profit Yahoo made in the first quarter this year, $218m came from Alibaba Group, which is enjoying success as China's internet economy grows and the company approaches a stock market flotation. It was a similar story for the second quarter, as Yahoo earned $846m in cash by redeeming its shares in the group, representing a significant chunk of Yahoo's $1.07bn revenue for the quarter, down 1% on last year. Alibaba saw its revenues jump 80% year-on-year in 2012 to $1.8bn and profits doubled in the same time to $642m. The 24% stake Yahoo still holds in Alibaba is potentially worth another $20bn, giving Mayer and her board plenty of cash to keep on buying companies - and their staff - in the hope that the purchases will bring features and services Yahoo customers will want to use. Reinvigorate There's no doubt Mayer has helped to reinvigorate Yahoo after years of being little more than an also-ran while Google and Facebook saw huge growth, and widespread publicity for each change to its products and update to staff policy is no doubt a bonus, but Mayer can't live off Alibaba forever. One day that $7.6bn will be gone and although Mayer knows she still has around $20bn in options to play with, getting rid of this will take away the most profitable part of her company, and investors will jump ship.

The next few years will be a balancing act as the stabilising wheels are removed and Yahoo, with dozens of acquired startups patching up the rust, will have to make progress under its own steam. To report problems or to leave feedback about this article, e-mail: a.charlton@ibtimes.co.uk