The rise, fall and comeback of Yahoo!

In the heady days of the early 1990s two young Stanford PhD students David Filo and Jerry Yang Yahoo founded Yahoo! as a hierarchical directory of other websites. From the insane startup days through the massive growth and rise of the internet during the early 2000s, Yahoo could do no wrong, despite the internet bubble crash of 2000. In 2002 Yahoo even tried to buy Google for US$3-billion.

Yahoo! then tried to start its own search engine and proceed to buy up internet companies by the dozen. Famously they overlooked thefacebook.com and youtube.com. The massive juggernaut of the internet had begun to falter and the next phase of CEO after CEO began. Jerry Jang famously turned down US$44-billion in 2008 from Microsoft and left the company soon after.

It appeared that Yahoo! was to be the Digital Equipment Corporation of the internet era, massively influential in its day but soon forgotten as technology and competitors passed it by. After five new CEOs in five years Yahoo may just have found its saviour in ex-Googler Marissa Mayer.

Analysts have long maintained that Yahoo! missed the massive changes that were driving the internet. Companies such as Google, Amazon and even Microsoft were reinventing and changing their business models exponentially while Yahoo! stuck to its old style methods. All that may just be changing and 2013 may just be the year that Yahoo finds it way back.

Mayer has wowed the business world since taking over the reins at Yahoo! in July 2012. Not only did she have a baby in September, she found time to clarify Yahoo! strategy and direction. The first shot was the recently released Flickr app, which kicked Instagram to the curb with great features and fantastic usability.

Yahoo! Mail has also been reinvented and is now able to compete head on with Google’s Gmail and the fresh new Outlook.com from Microsoft. Mayer clearly wants to make yahoo a product company with a huge emphasis on mobile. There are also rumours that Yahoo and Apple are getting cosy. Facebook is also reportedly talking to Yahoo! about a new social search engine.

The fact is, Yahoo still has 68-million Mail users, per Comscore, making it the company with the third largest mobile reach in the USA. More and more these users are primarily connecting via mobile and can be advertised to and connected to, via their mobiles and online. The new Mail app was released on Windows 8, iPhone and Android and has already showed some promise and growth. All these positive developments are already having a positive effect on the stock price, with a steady recovery in recent months and potential for far greater growth in 2013.

The scene appears to be set for Yahoo to make a comeback in 2013, led by the unflappable and very capable Marissa Mayer.