On November 18, 2006, The Wall Street Journal published an article titled “As Yahoo Falters, Executive’s Memo Calls for Overhaul.” The article then went on to becoming dubbed “The Peanut Butter Manifesto” as an analogy that the company has been spreading themselves thin with all the resources (including acquisitions) that the company owns.
The internal document was written by Brad Garlinghouse, a Yahoo! senior VP. The document was to provide the same motivation that J. Allard used on his Zune team with the article that I wrote earlier and the “Features, not products” initiative brought upon by Google’s Sergey Brin.
In acknowledgment of the need for change for Yahoo! about utilizing their resources, I decided to focus a blog post on the properties that Yahoo! has purchased since 1997 and where they are now. This way it will give you a better idea of what Yahoo! has to work with.
Net Controls Corporation was Yahoo!’s first major acquisition. Net Controls Corporation developed software that was the basis of the My Yahoo! Ticker. The premise of Net Controls’ product was to provide a customized stock, sports, and weather ticker in the Microsoft Windows operating systems taskbar. Although the Net Controls homepage is down, I was able to find archives of it on Archive.org. Check out the homepage archived from April 13, 1997.Â
Yahoo!’s purchase of Four11 for $92 million has now evolved into Yahoo! People Search . Yahoo! People Search seems to have remained the same since the purchase as its only functions are to search people by their first and last name, address, e-mail address, and phone number. Here is a link to Four11’s homepage on April 1998 (about 6 months after being acquired).
3.) Classic Games
The acquisition of ClassicGames.com brought Yahoo! into the realm of online gaming. Yahoo! Games which was partially powered by ClassicGames.com is now a place for users to download all types games for about $19.99 per game. Back then, ClassicGames.com was a website where users could play a few select Java-based multiplayer games such as Hearts, Spades, and Euchre. To see another move Yahoo! made to penetrate the massive gaming market, also look into the acquisition of The All Seeing Eye below.
Viaweb was the first application service provider which allowed users without technical expertise to develop an online store. The website was created by Robert Morris and Paul Graham and was started in 1995. Viaweb was written in Lisp, the second oldest high-level programming language after Fortran. Yahoo bought Viaweb for 455,000 shares of Yahoo! stock valued at $45 million and since then, Viaweb has evolved into Yahoo! Store.
5.) WebCal Corporation
WebCal Corporation was transformed into what is now known as Yahoo! Calendar. WebCal calendar software was web based and allowed users to customize the look-and-feel of their calendars. The technology was based on the Standard Event Entry and Distribution (SEED) architecture. Any event organizer was also allowed to enter/edit events securely into the EventCal database anywhere in the world. WebCal also used the EventEngine webcrawler to add public events from the web.
6.) Yoyodyne Entertainment, Inc.
Yoyodyne Entertainment, Inc. was acquired by Yahoo! on October 12, 1998 for 280,664 shares of Yahoo! common stock. Yoyodyne was an interactive direct marketing Internet-based company. “The acquisition combines Yoyodyne’s extensive database of self-selected consumers and its expertise and proven ability in direct-permission marketing with Yahoo!’s industry-leading sales and service organization [source].”
Yoyodyne launched in 1995 and was known for four branded programs, EZSpree.com (aggregator of online shopping sites), GetRichClick.com (an advertisement sponsoring website), EZVenture.com (a promotional company for small businesses) and EZWheels.com (a site that refers car buyers directly to car manufacturers).
“Yoyodyne provides several key elements Yahoo! seeks in extending its business, including the most talented team in the industry; a proven business model, client and user base; and a solid track record,” stated Tim Koogle, former CEO of Yahoo! Inc. “This acquisition further enhances Yahoo!’s leading position of providing marketers with the world’s best interactive platform for reaching highly targeted audiences, along with the richest online user experience based on their stated preferences.”
Through the acquisition, Yahoo! was able to bring Seth Godin, the charismatic founder of Yoyodyne on Yahoo!’s Board. Godin became the Vice-President of Permission Marketing for Yahoo! and Godin had also served as a columnist for Fast Company since now. Godin has written many books and started Squidoo, a “recommendation network” website last year.
Sportasy was a foundation for fantasy sports league websites. Yahoo! acquired Sportasy on December 1998 for an undisclosed amount, but Yahoo! seems to have benefitted from the acquisition as the Yahoo! fantasy sport league websites are still widely used. I looked at the HTML source of the available pages on archive.org for Sportasy.com and discovered that before Yahoo! acquired the company, Sportasy charged $15 to participate in the fantasy sports leagues and the sports that the company supported was baseball, hockey, soccer, football, and basketball fantasy leagues. Sportasy services has been implemented into Yahoo! Sports.
8.) HYPERParallel, Inc.
San Francisco based HyperParallel Inc. was the second of Yahoo!’s marketing company acquisitions after Yoyodyne. HYPERParallel Inc. was acquired for $8 million in 1999. HYPERParallel developed software for Fortune 500 companies that mined data and provided analysis that focused and dubbed it “CRM (customer relationship management)” systems. The market sectors that HyperParallel served included the telecomm, retail, and banking sectors. According to TwoCrows, a product of HYPERParallel included the //Discovery suite which were “data mining tools for classification, regression, clustering, association, and sequencing.”
Log-Me-On.com LLC was acquired by Yahoo! in 1999. Log-Me-On.com was a website that served as a bookmark website and an e-mail address manager that could be accessed anywhere. Yahoo! most likely embedded Log-Me-On.com technology into the toolbar and possibly into Yahoo! Mail. Log-Me-On had a service called EmailAnywhere that allowed users to e-mail anyone from anywhere in the world and also had an Auto-Log-On feature that remembered your username and password. This acquisition most likely took place to develop technology in order to compete with the 1998 Hotmail acquisition by Microsoft. Here is the archived “Learn More” page of Log-Me-On available by Archive.org.
10.) GeoCities.com, Starseed Inc., and Futuretouch Corporation
Ah yes, GeoCities. I would call GeoCities the “My Space” of the 90s. GeoCities is still alive and running on Yahoo! and is a free homepage builder that costs up to $8.95 per month for premium services. Geocities was Yahoo’s first acquisition billion dollar plus acquisition.
GeoCities was founded by David Bohnett and John Rezner in 1994. Before GeoCities was acquired and revamped GeoCities, communities were heavily advocated. Users selected a “city” to group their webpages with a certain clique. These cities were related to the website content that the user was planning on focusing upon. For example, entertainment websites were “Hollywood” and computer-related websites were “SiliconValley.”
GeoCities started as BHI or “Beverly Hills Internet” at www.bhi90210.com and was a small web hosting company in southern California. GeoCities quickly popularized and was signing thousands of “Homesteaders” per day. On May 1997, GeoCities started the allowing of advetisements and many users revolted, but since the Internet was becoming a global commodity and because GeoCities was a free service, it still remained popular.
However in June 1998, GeoCities introduced watermark advertisements on every website hosted by GeoCities, which ultimately costed them many users (including myself). Watermarked advertisements when a floating image hovered on the right side of the page on every website and followed the page as you scrolled up and down. I found myself switching to TheGlobe.com to practice website design after GeoCities introduced the watermark ads.
In August 1998, GeoCities had an IPO with a listing on NASDAQ with the code, GCTY. The initial price was $17 and rose to even $100 at one point on the first day. Four months later, Yahoo! purchased GeoCities for $3.57 billion. There was another major drop in users after Yahoo! modified the terms of service on GeoCities stating that Yahoo! would own the property placed on GeoCities pages including media such as images, but Yahoo! had quickly reversed this TOS decision after more and more people revolted.
Before Yahoo! bought Geocities, Geocities bought Starseed Inc., who created Webring.org. Therefore, Webbring became Yahoo! property. Webring.org was a website in which a collective group of websites joined various web rings and usually placed their web ring group affiliation at the bottom of their website. Users could then navigate to previous, next, and random websites pertaining to that web ring from the webpage owned by a particular web ring group member. After Yahoo! purchased GeoCities, they then revamped Webring.org into Yahoo! Webring and then ended it. Starseed was founded by a high school student, Sage Weil.
Also through the GeoCities acquisition, Yahoo! gained possession of Futuretouch Corporation according to SEO By the Sea. Futuretouch created WebDazzle, which was the first online WYSIWYG web site designer created in Java for easy web site design. Futuretouch was founded by Scott Daniel.
Check out the list of the GeoCities Neighborhood communities on Wikipedia.
Encompass, Inc. had designed software that had complemented Internet connections for ISPs. I am guessing that it was somewhat similar to channel portals that are offered through AOL and Prodigy. “This acquisition supports Yahoo!’s strategy to deliver consumers the best experience available on the Web and expands the business services the company offers its strategic partners. Encompass currently serves the world’s leading PC and PC peripheral manufacturers and ISPs, including Acer, CTX, Dell, Diamond Multimedia, Hewlett-Packard, Micron, Toshiba, Sony, AT&T, Earthlink and GTE [source].” The acquisition was valued at $130 million
12.) Online Anywhere
In 1999, Yahoo! acquired Online Anywhere for $80 million. Online Anywhere was started as a Motorola Ventures project and enabled web publishers to deliver content to TVs and other wireless devices. Online Anywhere used FlashMap technology that automatically converted published content to fit the sizes of the devices where the content is being delivered. Online Anywhere was founded in 1997 by Mohan Vishwanath, Anurag Mendhekar, and Sridhar Ranganathan from Bombay (Mumbai), India.
Broadcast.com was Yahoo!’s biggest acquisitions so far at an astonishing $5.7 billion in stock. Broadcast.com started out as a web radio company called AudioNet created by Chris Jaeb. Later on, Todd Wagner and Mark Cuban came on board and added tremendous value to AudioNet. AudioNet was created to solve the problem of being able to listen to Indiana University basketball games over the Internet and eventually led to the ability to broadcast other sports events over the Internet. Later on, other legal events were added to the broadcasts such as the presidential convention happening at the time.
In May 1998, AudioNet renamed themselves to Broadcast.com and then in the following July, Broadcast.com had an IPO in which the stock price went up from $18/share and closed at $62.75/share on the first day. On April 1999, Yahoo! bought Broadcast.com and then began to transition the technology into the Yahoo! product line. The acquisition of Broadcast.com and LAUNCH Media led to the Yahoo! LAUNCHcast music player.
One of the owners of Broadcast.com, Mark Cuban used his wealth from the acquisition as a means for creating his own reality show similar to Donald Trump and NBC’s The Apprentice. Mark Cuban’s show was called The Contender. Cuban had also bought the NBA basketball team, the Dallas Mavericks. Wikipedia has a detailed page on Mark Cuban and Mark Cuban has own blog that he updates regularly.
Through the Broadcast acquisition, Yahoo! also gained possession of SimpleNet and NetRoadShow, Inc. as well.
14.) Innovative Systems Services Group, Inc. (ISSG) and MyQuest Systems [source – SEO By The Sea]
MyQuest Systems was known as a telecommunications application provider. Madhu Yarlagadda was the Founder and Chief Operating Office of both MyQuest Systems and Innovative Systems Services. After the acquisition, Madhu Yarlagadda was signed on as the Director of Engineering of Communications Products at Yahoo! Some of the patents filed by people related to ISSG and MyQuest include Message store architecture, Intelligent voice converter, Integrated instant messaging, and routing and telephone services billing system
Arthas.com was acquired by Yahoo! on March 23, 2000 and served as a P2P technology platform. Arthas.com was the operating arm of dotBank.com which was an electronic payment service similar to PayPal. The purpose of the acquisition was to drive Arthas users to Yahoo! and to integrate Arthas technology into Yahoo!’s commerce offerings.
Arthas allowed anyone with an e-mail address to send and receive money as well as send personalized electronic bills. “We couldn’t be happier to join the Yahoo! team,” stated Robert Simon, a co-founder of Arthas.com, in the press release. “By joining the Web’s leading enabler of commerce, we can deliver our easy-to-use, secure, cost-effective payment solutions to the world’s largest audience of online purchasers.”
eGroups.com was a management website for e-mail lists. This website allowed its users to create personalized email lists or sign-up as a member for other lists. Yahoo! bought this company for $432 million in August 2000 and the company was integrated into Yahoo! Groups.
eGroups.com was originally created by Scott Hassan in January 1997 and was originally an e-mail archiving service called FindMail. Carl Page, the brother of Google founder, Larry Page, worked part time with FindMail in May 1997. By January 2000, eGroups raised a few million from Sequoia Capital and merged with a company called OneList. eGroups.com then began working on going public but decided to sell themselves instead.
On November 9, 2000, Yahoo! had acquired the No. 1 ranked web site in Taiwan called Kimo (www.kimo.co.tw) for $145 million. Kimo provided users with search content with localized options as well as a free e-mail service, groups, and chat. Through this agreement, Yahoo! Taiwan was able to enhance features. Yahoo! was able to seize a larger marketshare in Asia as well. In the third quarter of 2000, Kimo reported that they had received 25 million page views per day and had four million registered members.
“By teaming up with one of the leading global Internet companies, Kimo is able to leverage Yahoo!’s global network and vast resources to enhance its presence and impact a larger audience locally as well as worldwide,” stated David Lu, the CEO of Kimo in the press release from 2000. “We are pleased to combine our strengths to meet the demands of the marketplace – delivering relevant content and services to consumers, as well as new tools and programs to advertisers and merchants.”
On April 10, 2001, Yahoo! Australia & New Zealand completed the acquisition of SOLD.com.au for $30 million. This acquisition gave Yahoo! the upper hand of online transactions in the land down under. SOLD.com.au was one of the leading auction websites in Australia and New Zealand and had more than 180,000 users and 185 merchants.
After the acquisition took place, SOLD.com.au relocated to the Yahoo! Australia & NZ office in Sydney. Around the same time of the acquisition Yahoo!’s global networks enabled $1.4 billion of transactions through its commerce operations. As of today Sold.com.au redirects to eBay and the Sold.com.au technology has been implemented into Yahoo!’s global commerce system.
19.) LAUNCH Media Inc.
If you know what LAUNCH is, you may remember the packaged CDs that would come in the mail with the LAUNCH logo and had contained music and videos. Marrying the content from LAUNCH with Yahoo! Broadcast (see Broadcast.com acquisition above) enabled Yahoo! to synergize its various entertainment channels. When Yahoo! acquired LAUNCH Media for $12 million on June 28, 2001, Yahoo! had a regular of 192 million consumers accessing Yahoo!’s music services.
“Under the terms of the merger agreement, through a subsidiary, Yahoo! will commence a cash tender offer to acquire all of LAUNCH’s outstanding shares at a price of $0.92 per share in cash representing aggregate consideration of approximately $12 million. Any shares not purchased in the tender offer will be converted into the same cash price in a subsequent merger” stated the press release.
The founders of LAUNCH are David Goldberg and Bob Roback. “We believe this transaction is in the best interests of our stockholders,” stated David Goldberg in the press release. “The addition of LAUNCH’s enormous music video collection and Internet radio service to Yahoo!’s existing entertainment offerings will create even more compelling opportunities for online music fans, established and new artists, and advertisers.”
Around the same time of the acquisition, LAUNCH was settling a lawsuit with Universal Music Group. As many of you know, Universal Music Group is currently in talks with YouTube and MySpace for settling lawsuits as well. Some things just never change.
HotJobs.com was an online search engine that was integrated into Yahoo! in 2002 and is now known as Yahoo! HotJobs. Yahoo!’s HotJobs is now a direct competitor to Monster.com as it also provides tools and software for anyone looking to hire employees or for people looking for jobs. According to Wikipedia, “Job seekers voted Yahoo! HotJobs the (2002, 2003) ‘Best General Purpose Job Board for Job Seekers,’ and recruiters voted Yahoo! HotJobs the (2003) ‘Most Recruiter-Friendly General Purpose Site’ in a survey conducted by WEDDLE’s.” Yahoo! acquired the New York based company for $436 million.
HotJobs was created by Richard Johnson and was based on 24 W. 40th Street on the 12th floor in New York City. Before creating HotJobs, Johnson created the RBL Agency which is similar to ManPower and provided technical job placements. Johnson spotted Gonna Basinger at a Jupiter Communications’ conference and hired her as the first sales person for HotJobs. During the summer of 1997, Johnson started expanding the HotJobs operation by hiring recruiters from the RBL Agecy to join the HotJobs sales team.
In 1999, HotJobs made their first major transaction, a $1.6 million commercial during Super Bowl XXXIII while its revenues were at $2.5 million at the time. Shortly after that, a large number of companies started piling HotJobs with requests including IBM. By the end of 1999, HotJobs went plublic and the company grew to $100 million in revenues.
From the CNET press release, it was noted that Yahoo! CEO, Terry Semel stated “Yahoo’s acquisition of HotJobs is consistent with our business strategy to build a diversified global business and provide deeper, more valuable solutions for our consumers and business partners.”
On January 9, 2002, FindArticles.com announced that Yahoo! Brasil successfully completed the acquisition of CadÃª from StarMedia Network. This acquisition generated a larger market presence in Latin America. However, the acquisition details were not disclosed. After the acquisition, CadÃª and Yahoo! Brasil was merged and had become the third largest portal website as well as being “nation’s largest Web search directory” of the Latin American Internet market.
“This acquisition demonstrates our commitment to constantly improve on the user experience and our determination to be a long-term player in the Brazilian market,” stated Robert Alonso, the VP and manager director for Yahoo! Latin America in the press release from 2002. “As we continue to build the Internet’s leading global consumer and business services company, Yahoo! remains focused on delivering relevant, comprehensive content, programs and services to consumers, advertisers and customers around the world.”
StarMedia is a media company that targets Portuguese and Spanish-speaking Internet users. The company has offices in all of the major Latin American countries such as Mexico, Brazil, and Spain.
AlltheWeb.com was a search engine that was created in 1999 as an inspiration from FTP Search, a doctorate thesis paper written by Tor Egges at the Norwegian University of Science and Technology. Wikipedia compares AlltheWeb to Google in terms of size and technology, but obviously never became as popular. However, AlltheWeb had slightly greater advantages over Google in the sense that they had more advanced features, search clustering, a customizable look and feel, and also a fresher database.
On February 25, 2003 Overture had agreed to pay for AlltheWeb for $70 million in cash and a performance-based cash payment of $30 million over three years. About 8 months later, Yahoo! acquired Overture and took AlltheWeb and AltaVista with it. The Overture acquisition is mentioned below.
Inktomi was a company based out of California and was founded by UC Berkeley professor, Eric Brewer and graduate student, Paul Gauthier created in 1996. Inktomi was then implemented into the HotBot search engine. Inktomi become widely popularized for its use of distributed network technology which made search more efficient compared to rival, AltaVista who ran their searches on a single machine.
Inktomi then went on to develop Traffic Server which was a technology based on proxy cache. According to Cache Now!, proxy cache is when “users request pages from a local server instead of direct from the source. The local server gets the page, saves it on disk and forwards it to the user. Subsequent requests from other users of the cache get the saved copy, which is much faster and does not consume Internet bandwidth.”
Shortly after Traffic Server took off, Inktomi started purchasing various other companies. In November 1999, Inktomi bought Webspective, FastForward Networks in September 2000, and eScene Networks in June 2001. Before those acquisitions, Inktomi had also bought C2B and Impulse Buy Networks. Then the Internet bubble burst and Inktomi lost many of its customers and its value, so Yahoo! swallowed it up for $235 million.
“Bringing together a powerful combination of Yahoo!’s global audience and unmatched breadth and depth of services with Inktomi’s leading search technology, will allow us to create one of the most relevant, comprehensive and highest quality search offerings on the Web for both our affiliate partners and Yahoo!,” stated Yahoo! CEO, Terry Semel in the 2003 acquisition press release.
Overture Services, Inc. is now known as Yahoo! Search Marketing after the $1.63 billion acquisition. Overture was a spinoff of Idealab and was originally known as Goto.com. Overture was the inventor of P4P (aka Pay For Performance). Overture was the inspiration for monetizing search results that is leading today’s web companies into billion dollar margins. Google billions in revenues are accounted for by monetization from web searches based on Overture’s original ideas. Before Yahoo! purchased Overture, Yahoo! estimated that $25 million of their revenues from Q3 of 2002 was responsible for by Overture.
“The combined assets position Yahoo! as the largest global player in the rapidly growing Internet advertising sector,” stated CEO of Yahoo!, Terry Semel in the press release. “Together, the two companies will be able to provide the most compelling and diversified suite of integrated marketing solutions around the globe, including branding, paid placement, graphical ads, text links, multimedia, and contextual advertising.”
Overture was founded in 1997 and was based in Pasadena, CA at the time of the acquisition. During the acquisition, Overture had 1,000 people employed worldwide.
25.) 3721 Internet Assistant
In January 2004, Yahoo! acquired Beijing 3721 Technology Co. Ltd.’s 3721 Internet Assistant which was a Browser Helper Object (BHO) website. A BHO is a .DLL file that works as a plugin for Microsoft Internet Explorer to provide “enhanced functionality.” After being acquired Yahoo!, 3721 Internet Assistant was converted to Yahoo! Assistant. Microsoft AntiSpyware software however detected 3721 Internet Assistant as Spyware, which are programs that collects data about Internet users without the user’s consent.
“3721 Internet Assistant was originally released as a normal client-server application. However, it turned to use ActiveX technology to install itself on a client system later and was also shipped with many sharewares as default install options. 3721 Internet Assistant was also blamed for its use of a flaw in Microsoft Internet Explorer to install itself automatically when a user is browsing an array of 3721 sponsored personal and commercial websites with Microsoft Internet Explorer. Yahoo! Assistant is also included in 3721 Chinese Keywords and Yahoo! Mail Express, but sometimes the whole package of Internet Assistant, Chinese Keywords and Mail Express is named ‘Yahoo! Assistant’ in some sharewares. The company says the automatic installation ended in September 2005 and now asks user’s permission before installing, however, CA Inc. reported that during Yahoo! Assistant installation, extra components are installed without obtaining user’s consent [source: Wikipedia].”
The acquisition price was not disclosed. In 2005, a court in Beijing allowed 3721 to hear an accusation that it had against Baidu.com, another Chinese search engine company created by Robin Li. VentureBeat and the commenters of the post have an interesting discussion of Chinese based search giants.
Kelkoo was a European price comparision website that was created in 1999 by Pierre Chappaz and Mauricio Lopez in France. Innovacom and Banexis Ventures provided initial funding of $3 million and then merged with Spanish website Dondecomprar.com and UK-based website ShopGenie. Then merged as one company, Kelkoo then acquired ZoomIt, a Scandinavian website. In June 2003, Kelkoo then partnered with the European subsidiary of MSN.
On March 24, 2004, Matt Hines, a staff writer for CNET News wrote about the acquisition. “The acquisition also strengthens Yahoo’s position against rival Google, which is testing its own comparison shopping service, known as Froogle.” Kelkoo had a search technology that was known as Shopping Popularity which Yahoo! had implemented into their own commerce services.
Kelkoo is still online today and is a shopping hub for countries all over Europe. Yahoo! had acquired the company for $579 million.
In an interview from 2003, Oddpost’s co-founder, Ethan Diamond described Yahoo! Mail’s setbacks:
“This data-centric approach may sound painfully obvious, but consider that at 1024Ã?768 (the most common resolution on the web), only about 30% of Yahoo! Mailâ??s inbox screen is devoted to your mail. The remaining 70% is not, as you might expect, all devoted to advertising. In fact, ads only account for about 10% of the screen real estate, and the remaining 60% is consumed by navigation, dead space and administrative debris. [Wikipedia]”
The concept behind Oddpost lead to some of the functionality feature ideas in GMail as well. Yahoo! bought Oddpost on July 9, 2004 and opened the new Yahoo! Mail on September 14, 2005 for testing. Although the Oddpost servers were closed and now the website asks you to check out Yahoo! Mail, those who had Oddpost e-mail addresses could use them to log in to Yahoo! Mail Beta.
28.) The All-Seeing Eye
Acquiring the All-Seeing Eye was Yahoo!’s second move to penetrate the gaming market after ClassicGames.com. The All-Seeing Eye is known as ASE and is a game server browser that was designed by UDPSoft. The All-Seeing Eye was developed in two years and was released on June 15, 2001. GameSpy was the market leader at the time, but the All-Seeing Eye grew in popularity rapidly. Yahoo! bought the All-Seeing Eye in September 2004 for an undisclosed amount.
After buying the All-Seeing Eye, Yahoo! converged the service into the Yahoo! All-Seeing Eye. During the time of acquisition, the All-Seeing Eye had boasted over 12 million downloads. After Yahoo! had acquired the All-Seeing Eye, many of its users revolted against the service as the service had lacked noticeable updates.
The All-Seeing Eye’s competitors includes Qtracker, GameSpy Arcade, and XFire. XFire and Yahoo! had fought a legal battle, but resolved it in January 2006. Currently, the full version of the All-Seeing Eye costs $15. When I looked at the website last, there were 71,188 total players online mostly playing Half-Life.
On September 14, 2004, Yahoo! had officially acquired Musicmatch, Inc. for $160 million. Musicmatch was founded in 1997 and is especially known for its Musicmatch Jukebox software which competes with iTunes, WinAmp, and other mp3 software players. Musicmatch Radio network is a competitor of RealNetworks’ Rhapsody and other pay-per-month streaming music players.
Musicmatch Jukebox allows users to play audio files, burn, download, and organize music collections. The Musicmatch Radio network contains over 900,000 songs and 200 radio stations available for streaming during the acquisition. For those who want to purchase the music that they liked, Musicmatch, Inc. also had the Musicmatch Music Store which allowed users to download music and contained over 700,000 songs during the acquisition.
“Our goal is to give consumers the music they want, how they want it, anywhere they want it. We believe Musicmatch provides a great music experience that will further extend our offerings. The combination of our strengths will help us execute on our vision of providing music fans the best and broadest suite of music products and services, from discovery to distribution to music management,” stated David Goldberg, founder of LAUNCH Media (see above) and the VP and Generam Manager for Yahoo! Music in the 2004 press release. “This acquisition also gives Yahoo! a strong position in the digital music business, in both ad-supported media, such as radio and music videos, and on-demand distribution, with subscriptions and downloads.”
Musicmatch, Inc. is still online today and is a subsidiary of Yahoo! Music. Currently the Musicmatch Jukebox 10 is available for download on the company website and still has still provides the aforementioned services. The songs today cost roughly around 99 cents per song at the Musicmatch Music Store and now Musicmatch boasts over 1 million songs available for download.
30.) Stata Labs, Inc.
On October 21, 2004, CNET News.com wrote about Yahoo! buying an e-mail search company called Stata Labs, which was a private company based in San Mateo, CA. Stata Labs developed a software that allowed users to search for text and attachments within e-mails called Bloomba. CNet noted that this acquisition “could be an investment in a coming PC search tool to rival Google and Microsoft.”
The financial details of the acquisition was not disclosed. Around the same time of the acquisition, Google released software that also was able to search through e-mails for text and attachments. Also around that same time, Microsoft had also bought Lookout Software, a company that is now the basis of Windows Desktop Search. Stata Labs was bought quietly and there was not an official press release published.
Stata Labs boasted themselves as the world’s first search-based email client and also stated that their software had the ability to search all email and attachments even if you had 10,000 or more messages. Stata Labs also developed SAproxy, an anti-spam software “based on the leading Open Source spam identification technology, SpamAssassinâ?¢ [source].”
In February 2005, Yahoo! had acquired VerdiSoft, a software company whose purpose was to converge mobile and broadband technologies and promote the interconnection of the two means of communication. Through the acquisition, Marco Boerries joined the Yahoo! Management Team as
the Senior Vice President of Connected Life.
Marco Boerries is also known for developing Sun Microsystems’ StarOffice. VentureBeat wrote a detailed article about the acquisition on July 26, 2005. VerdiSoft had never shipped any products, yet was still acquired by Yahoo! for a reported $93 million.
In the above linked VentureBeat article, Michael Bazeley, the author of the post explained how the technology works. “If you add a phone number into the phone book on your mobile phone, that number would automatically be added to your other address books. If you read an email message on the phone, itâ??s marked as read when you get back to your desk at the office.”
Yahoo! had hired the entire the VerdiSoft team, including the 35 who were based in Germany. In the Connected Life blog dated from January, Terry Semel introduced a new array of Yahoo! Go products utilized VerdiSoft technologies.
32.) Ludicorp Research (Owner of Flickr)
Flickr has especially popularized amongst bloggers. The concept of tagging was one of Flickr’s major winning points. There is also a feature called Interestingness in which top pictures are added to the front of the Interestingness pool, which is a similar concept to featured videos on YouTube and stories making it to the frontpage of Digg. Yahoo! is currently attempting to patent the word, Interestingness.
In March 2005, Yahoo! acquired Ludicorp Research and on June 28, 2005, all the content from Flickr servers from Vancouver, British Columbia made its way to USA. As far as integration goes, Flickr results have found its way into Yahoo! Web Search. Yahoo! bought Ludicorp for $40 million.
On March 4, 2005, Gamasutra wrote an article entitled Yahoo! Games Opens Yahoo Games Studio, Acquires Stadeon. This was Yahoo!’s third acquisition in the gaming industry after ClassicGames and All-Seeing Eye. However, this was the first deal that brought Yahoo! Games into the mobile games market. With the acquisition, Yahoo! broke Yahoo! Games into two separate divisions: Yahoo! Game Studio and another division that Stadeon Inc. would oversee. Yahoo! Games Studio would create games for mobile phones and Stadeon would provide cross-platform games technology.
“We are excited to bring Stadeonâ??s cross-platform games technology to Yahoo! Games,” stated John Cahil, the founder of Stadeon. “Yahoo! understands the value of its large community and now letting its consumers play against any one of the 345 million Yahoo! users worldwide, anywhere, anytime and whether they are on a mobile device or their PC.”
John Cahill had become the Director of Games Operations and Platforms for Yahoo! Games after the acquisition. Also through the acquisition, 345 million Yahoo! Games users would be able to play anyone, anywhere in the world while mobile.
On April 18, 2005, Nacho Hernandez of Search Engine Roundtable wrote about Yahoo! buying TeRespondo to gain market share in Latin America. Today TeRespondo.com relocates to Yahoo! Search Marketing. TeRespondo was a Brazilian PPC (pay-per-click) advertising network. Nacho included statistics on the Brazilian Internet market, which proves the amount of value that was added through the Yahoo!-TeRespondo transaction.
In essence, the 2004 population of the Hispanic population in North America, South America, Central America, and the Caribbean was about 567 million and there is about 68 million Internet users in that population. Two Colombian entrepreneurs, Daniel Echavarria and Juan Diego founded TeRespondo.
What is TeRespondo up to these days? TeRespondo released a new CPC model for Mexican markets for Yahoo!
On June 14, 2005, Yahoo! had acquired Dialpad for an undisclosed amount. Brad Garlinghouse, the former CEO of Dialpad Communications and also the member of the Yahoo! Management Team that wrote a memo stating that it was time for Yahoo! to see some changes as mentioned at the very top of this post. Three months later, eBay bought Skype for $2.6 billion in stock. These transactions by both companies was a sign to the world that VoIP was a booming market.
Dialpad found its way on to Yahoo! Messenger shortly after the acquisition. Windows Live Messenger, Google Talk, and Yahoo! Messenger all have VoIP technologies implemented within their messaging services as of today. When I was backtracking for news on this acquisition, I stumbled upon GigaOM, who seems to have been the first to report the acquisition.
“What we saw in DialPad was quick way to add PC2Phone and inbound calls,” stated Joanna Stevens, Yahoo’s Vice President of Corporate Communications, reported in the GigaOM article.
In June 2005, Jeremy Zawodny, a Yahoo! employee in the platform engineering group wrote in his blog that the acquisition of blo.gs will be treated similarly to the Flickr acquistion. “What are our plans for the service? Simple. Keep it running, make it scale, and make it even better (a lot like the Flickr plans),” stated Zawodny. According to Wikipedia, Zawodny is also credited as being the inventor of podcasting.
blo.gs is a simple blog pinging website and is currently tracking over 162 million blogs. Blo.gs is based on RSS feed aggregation for blogs and lists the newly updated blogs on the Blo.gs homepage. Blo.gs also lists the most popular posts as well.
Jim Winstead, the founder of blo.gs also wrote about the acquisition [here].
In July 2005, Yahoo! had acquired Konfabulator.com and integrated the technology into the Yahoo! Widget Engine. Yahoo! Widgets provide free run time engines for Windows and Mac OS X. Yahoo! Widgets run small applications within the website and call these small software applications widget engines. A large number of blogs and millions of MySpace users have widgets integrated within their profiles. Also, as more people are customizing their Internet homepages and desktops to display only customized news and other information pertaining to what the user is interested, widgets popularized even more.
The core team of developers of Konfabulator includes Arlo Rose, Perry Clarke, and Ed Voas. This team released Konfabulator originally on February 10, 2003 and sold the service as a Mac-only application for $24.95 and then after a new release, Konfabulator was available for Windows at a price of $19.95.
38.) 46% Ownership of AliBaba.com
In October 2005, Yahoo! purchased a 46% stake in Alibaba for $1 billion in cash and gave Alibaba control of Yahoo! China. Ma Yun (Jack Ma), the founder of Alibaba.com remained on board for Alibaba/Yahoo! China. Alibaba.com’s slogan is “Global Trade starts here…” In a Supply-Chain Management Procurement class that I took in Fall 2005 at the Broad College of Business at Michigan State, I was a part of a group in which we write a fictitious proposition to strategically source a semiconductor company in Indonesia (the countries were picked from a hat). In the report, I remember I wrote about Alibaba.com as it flattens the distance between buyers and suppliers in the Asian market particularly in the manufacturing sector.
Yahoo! China/Alibaba.com had taken Zhou Hongyi, the chairman of Qihoo to court, alleging that Zhou may have embezzled and/or defrauded Yahoo! China before leaving Yahoo! China the year before. Once again, I must redirect you to the VentureBeat article that focuses on the Alibaba/Qihoo ordeal.
In October 2005, Yahoo! had acquired Upcoming.org at an undisclosed amount. Finding out the purpose of Upcoming.org is described right in the company name. Upcoming.org lists upcoming events that are submitted by Upcoming users. Users can add new events, explore events, add friends and view their friends’ event listings, and even submit pictures to their event page. Upcoming.org also utilizes tagging features for the events.
Since Yahoo! acquired Upcoming, users could log in to the website using their Yahoo IDs. Also after the acquisition, the three founders of Upcoming.org moved to Yahoo!’s Sunnyvale campus for work. Some of the latest features implemented into Upcoming.org includes mobile access and Guestlists.
Consumers tend to make offline purchases within 8-10 miles of their homes and Whereonearth believes that in the age of the Internet, advertisements should be a lot more personalized. To answer this problem, Yahoo! acquired local search and advertising company, Whereonearth. Through the acquisition, Yahoo! hoped “Together, weâ??ll be able to provide the most geo-relevant information across all of Yahoo!â??s products and services [source].”
Whereonearth was created in 1995 and has 3 members on Board: Paul Frew of Elderstreet Capital Partners as the Chairman, Devesh (Dev) Patel as the CEO, and Qamar Aziz as the Non-Executive Director. Whereonearth also has four products: Internet Locality, Where@Risk, GeoPlanet, and L-Sphere. Whereonearth was acquired by Yahoo! in October 2005 at an undisclosed amount.
Del.icio.us was acquired at an undisclosed amount on December 9, 2005, but it is rumored that the site was acquired for $30-$35 million. Del.icio.us was created by Joshua Schachter and during the time of the acquisition, Del.icio.us had approximately 300,000 users according to TechCrunch. From the TechCrunch post, I found the Yahoo! Search Blog post where Jeremy Zawodny of Yahoo! Search wrote about his interview with Dave Taylor.
“What’s so cool about del.icio.us?” Taylor asked Jeremy Zawodny. Zawodny replied, “Del.icio.us is a service for saving and sharing bookmarks. It’s popular in the blog world because a lot of bloggers are information hounds that collect hundreds of links to interesting web sites. Del.icio.us makes it easy to put them all in once place. Bloggers also like to publish links for their friends and readers to see, so there are a lot of tools for making that easy too.”
On September 27, 2006, former TechCrunch blogger, Marshall Kirkpatrick wrote about Yahoo! acquiring Jumpcut. This acquisition was a bit overshadowed by Google’s acquisition of YouTube. However, Jumpcut provides a different type of service compared to other video streaming websites. Jumpcut promoted the remixing of videos by providing an online Ajax-style interface where users can upload a video and control transitions at every second of the video such as dissolve and wipe.
Another element of Jumpcut is community. In the About Jumpcut page, the website states “as soon as you sign in to Jumpcut, you’ll instantly be part of an online creative community. This means you can look through all of the media that other people have made public and grab anything to use in your own movie. If you choose, you can share any of your stuff with the community as well. If you missed the shot of The Big Moment, chances are, someone else got it, so the more people that join the community and share their stuff, the better it gets for everyone.”
JumpCut was created 6 months before the acquisition even took place. The founders of JumpCut are Mike Folgner and Ryan Cunningham. Jumpcut.com was created under the company, MiraVida Media, Inc. The acquisition details are not known, but Kirkpatrick believeed that it was significantly less than the $65 million that Sony paid for Groupr. The acquisition rumor floating around is $15 million.
On October 17, 2006, Yahoo! announced that it had acquired AdInterax, which is the last advertising company that Yahoo! purchased as of today. The financial details were not released. According to the press release, AdInterax “will enable Yahoo! to provide advanced rich media creative assembly and campaign management tools directly to marketers at no charge as part of Yahoo!’s graphical advertising offerings.”
AdInterax was created in 1999 as a C-Corporation with its headquarters in New York. AdInterax specializes in the creation of rich media advertisements. Acquiring AdInterax is preparing Yahoo! to provide their advertisement clients with this rich media.
“Creativity in advertising is critical to the further adoption of the Internet as a marketing medium, and Yahoo! is committed to giving marketers more creative choice and control over their ads,” stated Greg Coleman, an executive VP of global media sales at Yahoo!. “We look forward to working with our customers and AdInterax’s publisher partners to generate new and innovative solutions for marketers that help simplify the rich media creation and purchasing process.”
And finally, the last official acquisition by Yahoo! as of today is Bix.com, a contest website. This company was acquired by Yahoo! 13 days ago at an undisclosed amount. Not only is Bix.com a contest website, but it is also a karaoke (which means “empty orchestra” in Japanese) website. The CEO of Bix, Miek Speiser would be migrating to Yahoo! as the VP of Community for Yahoo! Groups, 360, and Photos according to TechCrunch.
Bix was not the only company that Speiser had successfully sold off. Speiser also created and then sold epinions.com to Shopping.com in 2003 for $30 million. Bix is based out of Palo Alto and has 16 people working for the company. Speiser wrote a message to Bix users to anticipate some big things coming their way:
“With Bix’s platform focused on talent-based competitions combined with Yahoo!’s global audience and leadership in social media, as well as its sales and marketing muscle, we will take Bix to the next level. Expect many more contests with cool prizes, more community features, tons of entertaining content, and integration with many of your favorite Yahoo! services.”