CO-FOUNDERS, YAHOO!
MS '90, BS '90, ELECTRICAL ENGINEERING / MS '90, ELECTRICAL ENGINEERING

The company co-founders, acknowledged industry pioneers, are reflective. Employees scurry outside their offices, heads poke in with questions, e-mails and stock prices pop up on the computer screen. But they sit still within the bustle of their own enterprise and recall their long-ago days at Stanford, their very first year in business, the launch of their first product, and the birth of a whole industry.

"We were very lucky to have been there in the early days," remembers one of these computer industry veterans. "It was virgin territory. There was so much creativity. Every time someone did something novel, it was monumental."

Bill Hewlett remembering HP's garage days? Andy Bechtolsheim on the rise of Sun Microsystems?

Nope. It's Jerry Yang and David Filo dusting off the heady yesteryear of 1994. That's when these two PhD students started surfing the Web in earnest and, to organize their late-night fun, created the Yahoo! directory to help their Stanford pals locate cool Web sites.

"Thousands of people were producing new Web sites every day," says Filo, the 30-year-old who now leads software development for Yahoo! "We were just trying to take all that stuff and organize it to make it useful. As it became more popular, it became pretty clear we would have to get more people involved."

One of their first additions was Srinija Srinivasan, a 26-year-old Stanford alum with expertise in artificial intelligence and now the resident Ontological Yahoo! (it's on her business card) in charge of organizing the branching hierarchies that steer people to content. Every day, millions of people begin their Web journey through one or more of the 14 key Yahoo! Categories‹such as Arts, Business and Economy, Entertainment, Health, and Science‹in a so-called "context-based" search. But even a growing army of full-time surfers can't track the rapidly expanding universe of Web sites, which explains why Yahoo! has integrated Alta Vista's search engine to provide an ultra-comprehensive directory for "content-based" searches.

Today, about 120 people have joined Yang and Filo at Sunnyvale-based Yahoo! to categorize Web sites, sell advertising, and manage the explosive growth of the company. More than 350 companies now advertise on Yahoo!, attracted not only by the demographics of Yahoo! visitors, but also by the ability to create more interactive and measurable forms of advertising for these visitors.

With more big names like Honda and Disney lining up as customers, these are clearly good times for Yahoo! But the future, cautions the 27-year-old Yang, will depend on the company's ability to transform itself from a one-trick Yellow Pages into a full family of media products that capitalizes on the Yahoo! brand name.

"We were unique," says Yang, explaining the Yahoo! competitive leg up. "We were the first in this business to build a credible, sustainable, and likeable brand. If you believe the Internet is the next big medium, and if you realize every medium has had a brand associated with it-like CNN with cable-then it's conceivable that Yahoo! will become one of those brands."

With the competition starting to look like Ted Turner, Bill Gates, and Tom Brokaw, the two Chief Yahoos went out last year and recruited some adult supervision of their own. Tim Koogle, a Stanford graduate who was leading a couple of high-tech companies in the Northwest, didn't hesitate when he got the call.

"When I first met Jerry and David," says Koogle, "what struck me immediately was that they had filled a fundamental need and they had done it intuitively. That's what you look for in starting a business."

With Koogle on board as President and CEO, Yahoo! went public in early '96 and has been in full-tilt execution mode ever since, spinning off media products based on geographic, demographic, and subject-based segments. For example, Yahoo! Japan, Germany, Canada, or San Francisco Bay Area offer users localized versions of Yahoo! Demographic products include Yahooligans!, a Web guide for kids, and My Yahoo!, a customizable Web guide. And Yahoo! Internet Life magazine and Web site feed viewers subject- driven updates on topics such as stock prices or sports news.

Yahoo!'s blast-off and this current mid-air transformation into a more sustainable global media company has been, according to Koogle, "an exercise in sleep deprivation." And when you"re riding a rocket, sleep-deprived or not, you tend not to look back.

But today, the company principals seem energetic and more than willing to reflect on the early steps at Stanford that led them to this crazy spot.

They talk about the graduate fellowships that allowed them to choose Stanford in the first place ("I was almost a Cal Bear!" exclaims Yang)...the classes with John Hennessy, Jim Adams, and David Kelley...the business seminars in entrepreneurialism...the summer internships in Silicon Valley...and the Stanford-in-Kyoto exchange that not only brought Yang and Filo together as friends but also introduced them to Srinivasan.

Yes, Yahoo! is young. But this is a company born of deep roots and a long academic history.