Read: The web-2.0 bubble
Yahoo’s first major acquisition to this end was GeoCities, in 1999, for $3.6 billion. “They paid over $100 per GeoCities user, and that’s still one of the most expensive deals in internet history,” says CJ Reynolds, a doctoral candidate and media researcher at the Hebrew University of Jerusalem who considers herself a lifelong Yahoo fan. Reynolds has studied the relationship between GeoCities and Yahoo, and the culture clash between the site’s existing users and the corporate giant’s business interests. (Following the sale, users led a huge, successful boycott called the “Haunting” to protest Yahoo’s terms of service.) Ten years later, after a series of failed integrations and lackluster attempts at synergy, Yahoo abandoned ship. The cost of maintaining GeoCities’ extremely simple webpages is difficult to know, but it was likely small, Reynolds says. “Shutting down GeoCities was a way to shut down a product that looked old, dated, and still wasn’t strongly associated with the Yahoo brand.”
In 2005, Yahoo went on a Web 2.0 buying spree, picking up Baio’s event-calendar site, Upcoming, as well as the photo-sharing app Flickr, known for its exuberant user community, and the bookmarking site Delicious, which mainstreamed the idea of letting people write their own tags and organize their own content. Maciej Ceglowski, a web developer who was hired by the Flickr co-founder Caterina Fake to work at Yahoo’s in-house incubator, told me he remembers feeling like he was in the “late Byzantine empire.” At that point, Yahoo had a ton of history, a ton of wealth, and nowhere to go.
Then Ceglowski paused and started a new metaphor: “You know those 1950s Jell-O molds where it’s clear and there’s a raisin over here and a chicken leg over there? That was kind of what Yahoo was. Embedded in it were these little things with no clear plan or connection.”
In 2011, Yahoo sold the raisin that was Delicious to the YouTube co-founders Chad Hurley and Steve Chen, who later pawned it off to a marketing company, which sold it to an SEO-optimization expert, who sold it to Ceglowski in 2017 for just $30,000. “Now it lives as a museum,” Ceglowski told me. (Flickr was sold to a company called SmugMug, which started mass-deleting photos in 2019; Baio was able to buy Upcoming back from Yahoo in 2017 and has preserved an archived version.)
In fact, Yahoo’s bad reputation may be thanks, in part, to the fact that it had such a good eye for acquisitions 15 or 20 years ago. It kept buying things that people really cared about, cool companies that could have had more interesting futures if their founders hadn’t sold them to a megacorporation that would eventually pull them from public view. Ceglowski started a third metaphor with a sadder tinge: “Yahoo put everything behind glass, locked the door, and then walked away,” he said. Then he laughed. “I hope to buy them one day, that’s all I can tell you.”