The original name: "David's and Jerry's Guide to the World Wide Web", was appropriate, but not exactly catchy. They used the dictionary to come up with “Yahoo!”, a term that anyone can remember and say with ease. More importantly, Jerry and David said they liked the definition of a yahoo: "rude, unsophisticated, uncouth."
In the end, the word Yahoo! did roughly describe it as a web search directory. The term "hierarchical" described how the Yahoo! database was arranged in directory layers. The term "oracle" was intended to mean "source of truth and wisdom". And "officious" described the many office workers who would use the Yahoo! database while surfing from work.
Jerry and David loved to surf the Web. The Web was only 5 years old and still relatively “small” in 1994, but with thousands of websites being created daily, it was rather difficult to find anything fast. So, the two students built Yahoo! as their own guide to the World Wide Web! In their own words, they were “just trying to take all that stuff and organize it to make it useful”.
Jerry and David spent many nights collating the list of their favorite websites into the Yahoo! database. At first, the list was manageable but, soon, it became too large to navigate with ease. This is when the huge list got divided into categories. After a while, the categories also became too full and had to be split into subcategories. This, of course, became what is known as the “context based” search concept behind Yahoo!.
Largely by the word of mouth, the Yahoo! audience grew quickly. Within a year, the Stanford network became so clogged with Yahoo! web search traffic, Jerry and David had to move their Yahoo! database to the Netscape offices.
David and Jerry had recognized Yahoo!’s potential as a corporate business, and incorporated in March of ‘95. They both left their graduate studies to work on Yahoo! full time. In April 1995, the investors of Sequoia Capital funded Yahoo! with an initial investment of nearly $2 million. Also, at this time, David and Jerry hired Tim Koogle as CEO and Jeffrey Mallett as COO into the ranks of their management team. More funding came later in 1995 from investors Softbank and Reuters Ltd. Yahoo!, as a team of 49 employees, went IPO in April of 1996.
In the words of Tim Koogle, Yahoo! has been "an exercise in sleep deprivation". The concept that was intuitive, well devised and ahead of its time, became Yahoo! Inc. – a leading global Internet communications, commerce and media company that offers plethora of network services to more than 345 million individuals each month worldwide.
Today, David and Jerry, who are in their mid-thirties, are billionaires. Neither of them ever went back to finish their PhD studies, but they are both ranked by Forbes as two of the 400 wealthiest men in America.
Read the full story of Yahoo! and David Filo and Jerry Yang here.
Special thanks to guest technical writer, Joanna Gurnitsky, for this article