Now that the news about Microsoft / Yahoo deal are so hot and the comments are so plentiful, it is interesting to take a look back at how it all started and how Yahoo got  diversified beyound control and lost its old leadership position in search. Read my “story that repeats – Part 1” below.

The story.

It happened somewhere in California lately. Hard working family opened a pizza place. They wouldn’t spare the time and effort to turn the place into the best pizzeria in town. They managed to do it. They were living the American dream. Customers were piling up and the business was flourishing. They landlord didn’t think so. As soon as the lease expired the Landlord did not renew it. Instead he moved into the space and started his own pizza business trying to take advantage of his tenant’s hard work and success.

The repetition.

Yahoo was just a directory, search engine and a web information portal in the early days of the Internet in mid and late 90-s. Our company Aplus.Net used to advertise web hosting and domain name registration with them. Once in a sudden, out of the blue we have received a letter from Yahoo saying that they will not renew our advertising contract because they consider us a competitor?!? The web hosting business was just one of the many businesses Yahoo entered at that time. Online dating, travel, jobs, domain names come to mind. It seems that Yahoo examined their advertiser’s list and found the most successful online industries and got involved in those. Yahoo’s CEO Mr. Terry Semel stated in an interview that he used to run theme parks and he has noticed that people would buy pop corn and other stuff when they walk around the theme park. This is good point Mr. Semel, however you have to get those folks in the theme park first. They won’t come if the rides suck. This is exactly what happened. While Yahoo was busy imitating us in the web hosting and domain registrations, Google came in and ate their breakfast in the search engine space. What goes around, comes around.