Yahoo's Decline

Daring Fireball's John Gruber writes about Yahoo:

Yahoo reportedly had an opportunity to buy Google in 2002 for $5 billion. Yahoo, under the leadership of CEO Terry Semel, declined. And that was the end of Yahoo.1 We all know hindsight is 20/20. There are all sorts of acquisitions that could have been made. But I would argue that acquiring Google in 2002 (if not earlier) was something Yahoo absolutely should have known they needed to do.

$5 billion was an extremely cheap price for what Google has become today. But then again one can’t say Google would have gone on to do things that they have done since 2002 under Yahoo’s leadership. Look at what happened to flickr. 

Buying Google in 2002, at whatever cost, was the only way for Yahoo to return to those roots. Google wasn’t just something shiny and new — it was the best solution to date (even now) to the problem Yahoo was originally created to solve. In a broad sense, buying Google would have been to Yahoo what buying NeXT was to Apple in 1997: an acquisition that returned the parent company to its roots, with superior industry-leading technology and outstanding talent.

Amazing read.