It's only a slight overstatement to suggest that Yahoo was the SpaceX of the late 1990s. Back then, the concept of using a single search engine seemed as futuristic as commercial interplanetary travel or asteroid mining does today. Throw in a free email service, instant messaging, and up-to-the-hour news feeds, and Yahoo appeared poised to become the technology company for a new century.

Then Google happened, offering virtually everything Yahoo did except cheaper and faster. That condemned Yahoo to the unfortunate fate of devolving from a precocious upstart to a sluggish legacy company in a mere 18 months. It now exists as a diminished yet lucrative amalgam of disparate offerings, with everything from fantasy football and celebrity gossip to web hosting and maps. This is all packaged for the company's real clients—its advertisers.

So how does this once-darling of the internet, which is now owned by Verizon, continue to make money? This article outlines a brief history of Yahoo and its business model.

A History of Yahoo

Yahoo was founded in 1994 by Jerry Yang and David Filo. The two were graduate students at Stanford University. It began as a collection of websites and was originally called Jerry and David’s Guide to the World Wide Web. As its popularity increased, Yang and Filo changed the name to Yahoo.

The company was incorporated in 1995 and made a series of acquisitions. Unlike others launched during the dotcom era, Yahoo survived. The company lost popularity and relevancy to Google around 2000. However, its revenue did not peak until 2008. Yahoo was acquired by Verizon () for $4.48 billion in 2017.

After the sale to Verizon, Yahoo began operating alongside media brands like HuffPost and TechCrunch under an umbrella once called Oath. In January 2019, Oath was replaced by Verizon Media.

Enter Verizon

Verizon's 2017 acquisition shook up Yahoo's business model and turned the company away from the Asian market. Yahoo's business included an equity stake in Alibaba (BABA). That stake helped keep Yahoo alive during its decline. It was originally a 40% stake, which was acquired for $1 billion in 2005. Former 澳洲幸运5官方开奖结果体彩网:chief executive officer (CEO) Marissa Mayer, sold a portion of it back to Alibaba in 2012 for a large profit.

Verizon chose not to acquire the remaining Alibaba stake. It also excluded Yahoo Japan from the sale. A further development occurred in 2021, when Verizon Media was sold to Apollo Funds with Verizon retaining 10% ownership.

The Business Model

Most of Yahoo's 澳洲幸运5官方开奖结果体彩网:business model was redundant. Despite Verizon Media's efforts, this may still be true. Almost every Yahoo service has a more prominent, more successful, and more easily identifiable competitor. Among t🦋hem are:

• Yahoo Movies vs. Comcast's Fandango
• Yahoo Weather vs. Weather.com
• Yahoo Sports vs. Walt Disney's (DIS) ESPN.com

But if you have an active Yahoo email account that you never bothered to close after switching to Gmail, or if you happen to click on a Yahoo-branded news link, congratulations. You are one of the 澳洲幸运5官方开奖结果体彩网:monthly active users (MAUs) the company claims to engage. Verizon🥂's strategy is to leverage this engagement for digital advertising.

Ads on Yahoo sites work like any other digital ads. Yahoo sells ad space to advertisers. Ad spaces are only valuable based on the number of clicks they receive. Advertisers can buy space on Yahoo sites through their demand-side platform, which is more profitable for Yahoo, or on 澳洲幸运5官方开奖结果体彩网:third-party ad exchanges, which is more efficient for advertisers and less profitable for Yahoo.

Subscription Services

In June 2019, Yahoo Finance launched a subscription service called Yahoo Finance Premium that provides investors with premium content. This includes premium data and charting, advanced portfolio analytics, research reports and investment ideas, and company profiles. The site also allows investors to link their eTrade account to their Yahoo Finance account. Although the service is available, some of these features ar🌸e still being fully fleshed out.

As of January 2025, the service has a free tier and three paid tiers. The paid tiers range from $9.95 to $49.95 per month. A discount is offered for billing annually.

Inbox Commerce

Yahoo launched an updated version of the Yahoo Mail app during the Verizon era, calling it a super-app. This update centered around a new Deals tab, which offers individualized online shopping offers to users. Verizon Media's CEO, Guru Gowrappan, called this "enabling commerce through mail."

This update will hopefully provide space for Yahoo to 💜sell more ads inside one of its platforms. In doing this, Yahoo is betting on users who are already faithful to Yahoo. This set-up could offer some insulation from the fierce competition with Google, Facebook, and Amazon. 

Yahoo News XR Program and 5G

In November of 2017, Verizon Media launched a creative studio with immersive media company RYOT to create branded 澳洲幸运5官方开奖结果体彩网:augmented reality (AR), 澳洲幸运5官方开奖结果体彩网:virtual reality (VR), and 360-degree video content with corporate partners. It is perhaps Verizon's most futuristic and exciting 澳洲幸运5官方开奖结果体彩网:subsidiary. In April 2019, Yahoo News, Yahoo's second most popular site, announced it would oversee a partner program between Verizon's RYOT Studio and high-profile news organizations including Reuters, the Associated Press, and TIME. Through this program, RYOT and Yahoo News helped other news outlets create AR and VR news content.

Yahoo News monetized this venture by infusing news content with the VR- and AR-branded content — read: ads — that RYOT had experience making. RYOT also offered partners access to its software development kit, which makes the creation oꦍf VR and A💫R content more cost-effective.

This studio also served a flashy, modern project that integrated with Verizon's launch of their 澳洲幸运5官方开奖结果体彩网:5G network. This network supported all ofܫ Verizon Media's products to raise their speeds. The RYOT studio was designed to show off what such ꦑspeeds can do and to encourage users to consume the studio's data-intensive content using Verizon devices and apps. 

Staff Cuts

Like all digital media companies, Verizon Media and Yahoo have had to undertake layoffs in different moments to help boost profits. In 2019, Verizon Media cut . In 2024, Yahoo anounced the lay-off of over 1,600 workers, more than 20% of its workforce.

The Bottom Line

With the online advertising space as competitive as ever, and the existence of more popular competitors to Yahoo's major offerings, Apollo has a difficult task in making Yahoo into a success once again.