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Turning down Google's offer cost Yahoo its future

Updated: Jul 31, 2020

Two friends, Larry Page and Sergey Brin students at Stanford University in California, developed a search algorithm known as “BackRub” and later changed it to Google. They developed a page-ranking and site-scoring algorithm, named PageRank, and its patent was filed in 1998 which they were willing to sell to Yahoo, with an opportunity to buy it for as little as $1 million. The duo wanted to focus on their studies at Stanford, but Yahoo showed no interest as it wanted users to spend more time on its own platform.

Soon the online world began to realize the importance of third-party online advertising revenue. Google built its own pay-per-click service called AdWords and is now the key reason for Google's rags to riches story. In 2002, they approached Yahoo once again, this time to raise funds worth $3 billion. However, then Yahoo Chief Terry Semel refused the offer as it then wanted to build its own search engine to compete with Google. Yahoo acquired search engine Inktomi and ad revenue maker Overture in its mission to build the search engine that would topple Google.

However, Yahoo failed miserably.

The Global search engine market share in 2020 is:

Google- 92.54%

Yahoo - 1.64%

Google's parent company, Alphabet is now one of the world's most valuable companies, with its market capitalization hitting $1 trillion in January 2020.


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