Yahoo, one of the pioneering internet companies, has changed hands several times since its founding in 1994 by Stanford university students Jerry Yang and David Filo. Many people remember Yahoo’s heyday as a leading web portal but may wonder about its current ownership structure.
Yahoo is now 90% owned by Apollo Global Management and 10% owned by Verizon Communications, following Apollo’s acquisition of Verizon Media in 2021.
Since Apollo took over, Yahoo has experienced something of a renaissance under new leadership. The private equity firm purchased Yahoo and AOL collectively from Verizon for $5 billion, which was actually less than the combined annual revenues of both companies.
Under CEO Jim Lanzone, who took the helm in 2021, Yahoo has been restructured as a standalone business with renewed focus on its core strengths.
Key Takeaways
- Yahoo is majority-owned (90%) by Apollo Global Management with Verizon retaining a 10% stake in the company.
- The company has undergone significant ownership changes since its founding, transitioning from an independent company to Verizon and then to Apollo.
- Under Apollo’s management since 2021, Yahoo operates as a standalone business focused on digital media and technology services.
History of Yahoo
Yahoo has evolved dramatically since its humble beginnings as a web directory in the mid-1990s. The company’s journey includes rapid growth during the dot-com boom, numerous acquisitions, and several strategic pivots as the internet landscape changed.
Founding and Early Years
Yahoo was founded in January 1994 by Stanford University engineering students Jerry Yang and David Filo. They initially created it as “Jerry and David’s Guide to the World Wide Web” – a directory of websites organized in a hierarchy. The name was later changed to Yahoo, which stood for “Yet Another Hierarchical Officious Oracle.”
The company quickly became popular as one of the pioneers of the early internet era in the 1990s. Yang and Filo incorporated Yahoo in 1995 and took it public in 1996 with a highly successful IPO.
Yahoo’s original value proposition was simple but revolutionary: helping users navigate the rapidly growing web. The company expanded its offerings to include Yahoo Mail, Yahoo News, and other services that made it a central destination for early internet users.
Expansion and Acquisitions
Throughout the late 1990s and early 2000s, Yahoo grew tremendously through both internal development and acquisitions. The company acquired numerous services including:
- GeoCities (1999) – a web hosting service
- Broadcast.com (1999) – an internet radio company
- Flickr (2005) – a photo sharing platform
- Tumblr (2013) – a blogging platform
During the dot-com boom, Yahoo became one of the most valuable technology companies in the world. It expanded globally and developed a wide range of products that touched nearly every aspect of online life.
Yahoo’s services became deeply integrated into how consumers used the internet. From email to news, shopping to search, Yahoo created an ecosystem that millions of users relied on daily.
Yahoo’s Strategic Shifts
As the internet evolved, Yahoo faced increasing competition, particularly from Google in search and Facebook in social media. The company went through several strategic shifts and leadership changes in attempts to remain relevant.
In 2008, Yahoo rejected a $44.6 billion acquisition offer from Microsoft – a decision many later questioned. The company struggled to define its identity in the changing digital landscape.
By 2015, Yahoo announced plans to spin off its valuable stake in Alibaba Group. This was followed by a major announcement in 2016 when Yahoo agreed to sell its core operating business to Verizon.
The Verizon acquisition completed in 2017, marking the end of Yahoo as an independent company. As of 2021, Yahoo is 90% owned by Apollo Global Management and 10% by Verizon Communications, showing how far the once-dominant internet pioneer had traveled from its startup roots.
Yahoo’s Ownership Timeline
Yahoo has changed hands several times since its founding in 1994. These ownership changes reflect the company’s evolving position in the tech landscape and its struggle to maintain relevance in a rapidly changing internet environment.
Verizon’s Acquisition of Yahoo
In July 2016, Verizon Communications announced plans to buy Yahoo’s core internet business for $4.83 billion. This major deal came after Yahoo had tried various strategies to regain its former glory in the internet world.
The acquisition officially closed on June 13, 2017, when Yahoo was formally acquired by Verizon. The final price was actually closer to $4.48 billion, slightly lower than the initial announcement.
After the acquisition, Yahoo’s properties weren’t kept as a standalone business. Instead, they were folded into a new unit called Oath, which combined Yahoo with AOL, another Verizon acquisition.
This move marked the end of Yahoo’s independence, 22 years after it began as a hobby project by Stanford graduate students Jerry Yang and David Filo.
Alibaba’s Investment in Yahoo
Before the Verizon deal, one of Yahoo’s most valuable assets was its stake in Chinese e-commerce giant Alibaba. In 2005, Yahoo made a strategic investment in Alibaba, purchasing a 40% stake for $1 billion.
This investment turned out to be incredibly valuable over time. As Alibaba grew into one of the world’s largest tech companies, Yahoo’s stake became worth far more than Yahoo’s core business itself.
When the Verizon deal was structured, Yahoo’s Alibaba stake wasn’t included in the sale. Instead, these assets were placed in a separate company that was renamed “Altaba.”
This financial arrangement allowed Yahoo shareholders to maintain their valuable Alibaba investment while letting Verizon take over the operational parts of Yahoo.
Yahoo Japan Stake
Another significant ownership element in Yahoo’s history was its stake in Yahoo Japan. Unlike its American parent, Yahoo Japan remained highly successful in its home market.
Yahoo owned about 35% of Yahoo Japan, a joint venture with Japanese company SoftBank. This partnership allowed Yahoo to have a strong presence in Japan, even as its global influence waned.
Similar to the Alibaba stake, Yahoo’s interest in Yahoo Japan wasn’t included in the Verizon acquisition. It remained with the Altaba holding company after the sale.
Yahoo Japan continues to operate as a major portal in Japan, showing how the Yahoo brand maintained strength in certain markets even as it struggled in others.
Management and Leadership
Yahoo has seen several significant leadership changes over the years that shaped its direction and business strategy. Key executives made important decisions that affected the company’s position in the digital marketplace.
Marissa Mayer’s Leadership
Marissa Mayer joined Yahoo as CEO in July 2012, coming from Google where she was a longtime executive. During her five-year tenure, she focused on revitalizing Yahoo’s products and services.
Mayer made over 50 acquisitions, including the $1.1 billion purchase of Tumblr in 2013. She worked to improve Yahoo’s mobile presence and redesigned many core products like Yahoo Mail and Yahoo News.
Despite her efforts, Yahoo faced challenges competing with Google and Facebook for digital advertising revenue. The company struggled to grow its core business significantly during this period.
Mayer’s leadership ended in 2017 when Verizon acquired Yahoo’s core internet business for $4.48 billion. The deal marked the end of Yahoo’s run as an independent internet giant.
Tim Armstrong and Oath
Tim Armstrong, former CEO of AOL, became a key figure when Verizon combined Yahoo with AOL to form a new company called Oath in 2017. Armstrong was appointed to lead this combined entity.
Under Armstrong’s leadership, Oath aimed to become a digital advertising powerhouse by combining Yahoo’s and AOL’s audiences and ad technology. The goal was to create a stronger competitor to Google and Facebook in the digital ad market.
Armstrong’s strategy involved integrating the two companies’ operations and technologies. However, Oath struggled to meet Verizon’s revenue expectations.
In 2018, Armstrong left the company, and Oath was later renamed Verizon Media. Eventually, in 2021, Apollo Funds completed the acquisition of Yahoo, with Verizon retaining a 10% stake. Today, Yahoo operates under Jim Lanzone as CEO, leading Yahoo’s renaissance under its new owners.
Yahoo’s Business Ventures
Yahoo has diversified its portfolio with various digital platforms and services over the years. These ventures show the company’s strategy to expand its reach in different online markets.
Yahoo Finance
Yahoo Finance is one of the most successful services in Yahoo’s business portfolio. It provides users with financial news, data, and tools to track market information. The platform offers stock quotes, financial reports, and personalized watchlists for investors.
Users can access real-time market data, charts, and financial statements from companies worldwide. Yahoo Finance also features original content from financial experts and journalists.
The service attracts millions of visitors monthly, making it a valuable asset for Yahoo Inc. The platform competes with other financial information websites while maintaining its position as a trusted source for market data.
Yahoo Finance has evolved over time to include premium subscription services and enhanced portfolio analysis tools. These features help users make informed investment decisions.
Acquisition of Tumblr
In 2013, Yahoo made headlines when it acquired Tumblr, the popular blogging platform, for $1.1 billion. This purchase represented Yahoo’s attempt to attract younger users and expand its social media presence.
Under Yahoo’s ownership, Tumblr continued to operate as a separate service with its unique identity and user base. The platform was known for its creative community and diverse content.
However, the acquisition didn’t deliver the expected results. Following Verizon’s purchase of Yahoo, Tumblr was later sold to Automattic (WordPress owner) in 2019 for a reported price much lower than the original purchase amount.
This business venture highlights the challenges Yahoo faced in its expansion strategies. Despite the initial excitement, the Tumblr acquisition is often cited as an example of the difficulties in monetizing social media platforms while maintaining their original appeal.
Rebranding and Company Structure
Yahoo has undergone significant structural changes in recent years, including major rebranding efforts and reorganization of its media properties. These changes reflect the company’s adaptation to new ownership and market conditions.
Formation of Oath
In 2017, Verizon acquired Yahoo. After this, the telecom giant created a new division called Oath. This new entity combined Yahoo with AOL, which Verizon had purchased earlier. The creation of Oath represented Verizon’s strategy to build a digital advertising business that could compete with Google and Facebook.
Despite rumors and some confusion, the Yahoo brand itself didn’t disappear or change its name to Oath. Instead, Yahoo remained as a media brand under the Oath corporate umbrella. Oath served as the parent company name while maintaining the strong brand recognition Yahoo had built over decades.
This structure lasted until 2018, when Verizon renamed Oath to “Verizon Media Group.” The rebranding reflected a shift in strategy and acknowledgment of the continued value of the individual media brands.
Media Brands Under Yahoo
Yahoo’s corporate structure includes several well-known media properties that operate under its umbrella. These diverse brands allow Yahoo to reach different audience segments across various content categories.
Key media brands that have been part of the Yahoo family include:
- HuffPost (formerly Huffington Post) – A news and opinion website
- AOL – One of the internet’s original service providers that evolved into a media company
- TechCrunch – A technology news website
- Engadget – A technology blog focused on gadgets and consumer electronics
When Apollo Global Management acquired Yahoo from Verizon in 2021, the company structure changed again. Apollo now owns 90% of Yahoo, while Verizon maintains a 10% stake in the business.
The continued use of the Yahoo brand name demonstrates its enduring value in the digital marketplace, despite multiple ownership changes and restructuring efforts.
Yahoo in the Marketplace
Yahoo has evolved significantly since being acquired by Apollo Funds in 2021. The company maintains a strong presence in multiple digital sectors while adapting to the changing online landscape.
Position Amid Competitors
Yahoo remains a significant player in the internet industry, though its position has shifted over the years. As a multinational technology company focused on media and online business, Yahoo competes with tech giants like Google and Microsoft in various sectors.
Under Apollo’s ownership, Yahoo has experienced something of a renaissance compared to its previous years with Verizon. The company now operates independently with Apollo holding a 90% stake, while Verizon maintained a 10% stake after the sale.
Yahoo’s competitive position has been strengthened through strategic focus on its core brands and services. This targeted approach has helped Yahoo establish clearer market positioning against rivals in search, news, finance, and email services.
Service Offerings to Users
Yahoo provides a diverse range of services that attract hundreds of millions of users globally. The company serves as a trusted digital guide helping consumers achieve their goals online through various platforms.
Key offerings include:
- Yahoo Finance – One of the most popular financial news and data platforms
- Yahoo Mail – Email service with enhanced security features
- Yahoo News – Aggregated news content from multiple sources
- Yahoo Sports – Sports news, fantasy leagues, and betting information
These services are integrated across platforms to create a cohesive ecosystem for users. Yahoo has focused on modernizing its interfaces while maintaining the familiarity that longtime users appreciate.
The company continues to adapt its offerings to meet changing consumer demands, particularly in mobile functionality and personalized content delivery.
Social and Economic Impact
Yahoo’s ownership changes have significantly affected thousands of workers and communities where the company operates. These shifts have reshaped the tech employment landscape while creating both opportunities and challenges for employees.
Influence on Jobs
Yahoo has been a major employer in the tech industry since its founding. At its peak, the company employed thousands of workers across various departments including engineering, marketing, and content creation. When Verizon acquired Yahoo in 2017, the company’s workforce underwent significant restructuring.
The merger with AOL under Verizon’s ownership created a new entity initially called Oath. This consolidation aimed to create a stronger digital advertising competitor but also meant combining teams and eliminating redundant positions.
Later, when Apollo Global Management purchased 90% of Yahoo (with Verizon keeping 10%), further changes to employment structures followed. These ownership changes have influenced hiring practices, company culture, and job security for employees.
Impact of Layoffs
Yahoo has experienced several rounds of layoffs throughout its history, particularly during ownership transitions. These workforce reductions have affected local economies in tech hubs like Sunnyvale, California, where Yahoo’s headquarters is located.
After Verizon’s acquisition, the company implemented cost-cutting measures that included significant staff reductions. Similarly, when the company’s internet business was merged with AOL to form Oath, many positions were eliminated to reduce operational overlap.
These layoffs have created ripple effects in the tech industry. Many former Yahoo employees have founded startups or joined competitors, spreading Yahoo’s institutional knowledge throughout Silicon Valley.
The human cost of these layoffs extends beyond just numbers. Families and local businesses in communities with Yahoo offices have felt the economic impact of these workforce reductions.
Yahoo’s Digital Assets
Yahoo owns several digital platforms that have changed hands through various acquisitions. The company’s portfolio includes both consumer-facing services and valuable digital properties that continue to operate under the Yahoo brand umbrella.
Overview of Flickr
Flickr, the popular photo-sharing service, has had an interesting journey as part of Yahoo’s digital assets. Yahoo acquired Flickr in 2005 for a reported $35 million, making it one of Yahoo’s most recognized acquisitions at the time.
When Verizon purchased Yahoo’s core assets in 2017 for $4.48 billion, Flickr came along as part of the deal. However, the ownership picture changed again in 2021 when Apollo Global Management acquired 90% of Yahoo from Verizon.
It’s worth noting that Flickr briefly left the Yahoo family when it was sold to SmugMug in 2018, before the Apollo acquisition. The platform continues to operate as a photo storage and sharing service with both free and premium subscription options.
Future Outlook
Yahoo, now owned by Apollo Global Management, is looking ahead to some exciting changes. The company plans to return to the public markets after being privately held since 2021.
Under CEO Jim Lanzone, who took the helm in September 2021, Yahoo has experienced what some call a renaissance. The company seems to be finding new life after its acquisition from Verizon.
Apollo has been actively investing in Yahoo’s core products since the purchase. They’re focusing on strengthening what they call the “crown jewels” of Yahoo’s ecosystem.
The potential IPO represents a major milestone for Yahoo. It would mark a significant comeback for a brand that was once the face of the early internet.
For users, this could mean improved services and new features.
Yahoo still maintains popular platforms in email, news, and finance that millions rely on daily.
The $5 billion Apollo paid for Yahoo was less than the company’s annual revenue at the time. This suggests Apollo saw untapped potential in the technology company that they’re now working to realize.
