Yahoo! vs Alphabet Inc. (Google)

Jerry Yang and David Filo were Stanford PhD students in 1994 when they began maintaining a directory of websites they found interesting — initially called "Jerry's Guide to the World Wide Web." They organised the links into categories, then categories within categories. The directory was renamed Yahoo — an acronym they claimed stood for "Yet Another Hierarchical Officious Oracle," though they admitted they mainly liked the word because its dictionary definition included "rude, unsophisticated, uncouth." By 1995, Yahoo was receiving one million page views per day.

In 1998, Larry Page and Sergey Brin approached Yahoo and offered to sell the Google search technology for $1 million. Yahoo declined — they were concerned that a better search engine would send users away from Yahoo's portal too quickly, reducing advertising revenue. Yahoo later had multiple opportunities to acquire Google at larger but still manageable prices. Each time, Yahoo declined. Google went public in 2004 at $85 per share.

Yahoo offered to acquire Facebook for $1 billion in 2006. Mark Zuckerberg was initially interested — he was 22 years old and the offer was extraordinary. He put the deal to a shareholder vote. It failed. Yahoo subsequently reduced its offer. The negotiation collapsed. Facebook was valued at $104 billion at its 2012 IPO and over $1 trillion at its peak.

Microsoft offered to acquire Yahoo for $44.6 billion in February 2008 — a 62% premium to Yahoo's market price. Yahoo's board, under pressure from CEO Jerry Yang, rejected the offer as inadequate. Microsoft withdrew its offer. Yahoo's stock, which had been trading at $28 before the offer, fell to $10 by the end of 2008 as advertising revenue declined during the financial crisis. Yang resigned under shareholder pressure. The rejection of Microsoft's offer is widely regarded as one of the worst decisions in corporate history.

Yahoo sold its core internet business to Verizon Communications in June 2017 for $4.48 billion — approximately one-tenth of Microsoft's 2008 offer. The sale was complicated by the disclosure of two massive data breaches: one affecting 500 million accounts in 2014 and one affecting all 3 billion Yahoo accounts in 2013 — the largest in internet history. Verizon reduced its acquisition price by $350 million following the breach disclosures. The company that had turned down $44.6 billion from Microsoft sold nine years later for less than $5 billion. Yahoo Finance, Yahoo Mail, and Yahoo Sports survived under new ownership. The search engine that had turned down Google had been replaced by it.

Larry Page and Sergey Brin met at Stanford in 1995. By 1996 they had built a search engine called BackRub — named after its method of analysing backlinks. It ran on Stanford's servers and consumed so much bandwidth that the university repeatedly asked them to take it down.

Sun Microsystems co-founder Andy Bechtolsheim wrote Google a cheque for $100,000 in August 1998 after a brief demo in a Stanford parking lot. There was one problem: Google Inc. didn't exist yet. Page and Brin had to incorporate the company before they could cash it.

In 1999, Page and Brin tried to sell Google to Excite CEO George Bell for $1 million. Bell turned them down — the search was too good, it would send users away from Excite's portal too quickly. Bell later called it the worst decision of his career. Excite filed for bankruptcy in 2001. Google became worth more than $2 trillion.

When OpenAI launched ChatGPT in November 2022, Google declared an internal "code red." The company that had invented the transformer architecture — the technology that made ChatGPT possible — had published its research openly and was now scrambling to compete with the system it had inadvertently enabled. Google rushed Bard to market. It made a factual error in its first public demo. The stock dropped $100 billion in a single day. Google's search share fell from 80% to under 70% as users migrated to ChatGPT, Perplexity, and Claude.

In September 2025, a U.S. federal court ruled that Google had illegally maintained its monopoly in search, ordering the company to end exclusive distribution contracts with Apple, device manufacturers, and browser makers. The Apple deal alone had been worth approximately $20 billion per year to keep Google as the default search engine on Safari. The court stopped short of forcing Google to sell Chrome or Android, but the ruling was the most consequential antitrust action against a technology company since the Microsoft case of 1998. Google announced it would appeal. The case is expected to reach the Supreme Court.