Before the rise of Google in late 2000s, Yahoo was the undisputed king of the internet, with its search engine and email services being used by billions of internet users across the world. However, after the launch of Google, Yahoo gradually began to decline, and today it has become a relic of the past.
But did you know that Yahoo had the chance to acquire Google but the deal did not materialize. Let us delve into the untold story of how Google’s creators once approached Yahoo to sell their website.
In 1996, two Stanford University students, Larry Page and Sergey Brin, started working on a school project which took the form of a revolutionary search engine that would transform and revolutionize the internet decades later. Andy Bechtolsheim, the co-founder of Sun Microsystems, was the first to realise the potential of Page and Brin’s innovative search engine, and became its first patron, investing $100,000 in Google in 1998, even before it was officially registered as a company.
The same year, Page and Brin approached Yahoo and other tech giants for investments or buy their company outright as they felt that the project was distracting them from their academic pursuits. The founders of Google, who also invented the PageRank system, approached Yahoo, offering to sell their innovative system, which today is at the core of Google’s search engine, for just $1 million.
However, Yahoo turned down Sergey and Larry’s offer to buy their nascent company, which would transform into world’s most powerful tech firm in coming years.
In 1999, Larry Page and Sergey Brin offered to sell Google to Excite for $1 million, but Excite CEO George Bell rejected the offer, even after
Excite’s venture capitalist, Vinod Khosla, negotiated the price down to $750,000.
In 2002, Yahoo, seemingly realising their mistake of not taking Page and Brin’s offer, tried to buy Google when Yahoo founders, Jerry Yang and David Filo gave the green light to the company’s CEO Terry Semel to make an offer to Google’s founders.
Soon, at a dinner with Brin and Page, Semel asked them what they wanted to do next (with regards to Google). “We don’t know,” came the answer. Semel then offered to buy Google, with Page and Brin initially asking for $1 billion, a price agreed to by the then Yahoo CEO.
However, later Google’s founder raised the price to $3 billion and the negotiations fell apart.
While Yahoo tried to acquire Google in 2002, it seems logical that its founders were hesitant to sell the company because at that time Google had started emerging as a powerful force as internet usage became more common.
Google had found a unique business model with its AdWords model, which would shape the future of digital advertising and cement the company’s place as the undisputed ruler of the internet in the years to come. Google’s AdWords platform allowed advertisers to bid on keywords and the number of people who clicked on their ad were determined by the bid price.
Ads that did not perform well were quickly removed, which benefited both advertisers and users. Additionally, Google also helped clients improve their campaigns using its large database. This new technology had made Google a major player in the tech industry by the early 2000s.
Startled by Google’s rapid success, Yahoo tried to buy them out, but after the deal failed, it acquired Inktomi, a search engine that used parallel computing technology to search the web for pages that contained a word or phrase, to counter Page and Grin’s juggernaut.
However, Google continued to grow at an unprecedented rate and soon became synonymous with the internet, even as the downfall of Yahoo continued, gradually shutting down many of its services, and becoming a shadow of what it once was.
