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work with many regional sites. The firm offered chat, personal home pages and additional
features in an ads-driven model. Over time, Lycos' prominence as a search engine declined,
this despite its 1999 decision to adopt the more-efficient FAST search technology.
One year later, at the most inflated moment of the dotcom bubble, Lycos was purchased
for 12.5 million in stock by Terra Networks, S.A., a leading provider of Internet access
to the Spanish and Portuguese-speaking world. Today Lycos remains somewhat viable in
those markets, but takes its search results from Yahoo!
This latter firm also had university roots. According to Yahoo's official history: "The
two founders of Yahoo!, David Filo and Jerry Yang, Ph.D. candidates in Electrical Engin-
eering at Stanford University, started their guide in a campus trailer in February 1994 as a
way to keep track of their personal interests on the Internet. Before long they were spending
more time on their home-brewed lists of favorite links than on their doctoral dissertations.
Eventually, Jerry and David's lists became too long and unwieldy, and they broke them out
into categories. When the categories became too full, they developed subcategories ... and
the core concept behind Yahoo! was born."
"Jerry and David's Guide to the World Wide Web" soon evolved into Yahoo!, this name
an acronym for "Yet Another Hierarchical Officious Oracle."
Yahoo! celebrated its first million-hit day in the fall of 1994, this translating to almost
100 thousand unique visitors. Just a few months later, in early 1995, Filo and Yang formally
launched their firm and received $2 million in venture capital from Sequoia Capital, the
highly-respected Silicon Valley firm which had previously put money into such promising
start-ups as Apple, Atari, Oracle and Cisco.
In due course, Filo and Yang hired Motorola management veteran Tim Koogle, an
alumnus of the Stanford engineering department, as chief executive officer, and Jeffrey
Mallett, founder of Novell's consumer division, as chief operating officer. Reuters Ltd. and
Softbank provided a second round of funding in late '95, and the company (then boasting
49 employees) went public with a wildly successful IPO during early 1996.
Yahoo! grew rapidly throughout the 90s and, like Lycos, diversified into a Web portal.
The firm's stock price shot to a high of $118.75 at the peak of the dot-com bubble, but af-
terwards reached an all-time low of $8.11. By 2008, in the face of stiff competition from
Google and other players, Yahoo! was forced to enact several large layoffs.
During February of that year, Microsoft made an unsolicited bid to acquire Yahoo! for
$44.6 billion. Yahoo! subsequently rejected the bid, claiming that it substantially underval-
ued Yahoo! and was not in the interest of its shareholders. Eleven months later, in Janu-
ary of 2009, Yahoo! appointed Carol Bartz, former executive chairperson AutoDesk, as its
new chief executive officer and a member of the board. (Shortly, when asked on CNBC's
Squawk Box whether she would have taken Microsoft's initial bid of more than $40 billion,
Bartz said: "Sure, do you think I'm stupid?") It is Google, however, which poses the largest
problem for Yahoo! "Google is a fierce competitor," says Bartz. "I wish I was worth a bazil-
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