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Yahoo and Pontiac - Lessons Learnt!
By: SivaKumar Nadarajah
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I have been analyzing, learning and writing about tech companies for a while now, but something about Yahoo always amazes me. How did Yahoo survive the burst? What did Yahoo do different from other internet portals that made Yahoo stand tall during the continuous hurricanes that swept away other dot coms that solely depended upon advertising revenues? How can a company be so effective even without a proprietary technology or a killer application? Everything Yahoo does even today, is hugely possible for anyone to do. The technology behind Yahoo is not rocket science, and not as complicated as, say, even Google. So, What makes it so special that visitors always end up in Yahoo for many of their Internet needs?

I think, partially, I know the answer. It's simplicity and performance that makes Yahoo so special. Yahoo is never down. The home page always loads in a split second. It's pleasant. It's easy to navigate, and it has everything you need. In other words, it's damn plain simple.

Simplicity always attracts people, and it's not limited only to web sites. Here is a fascinating story:

A friend of mine, who came to Jersey for a short assignment, rented a Pontiac lately. By the way, ever seen a Desi techie 'buying' a Pontiac?. I waited for him in my car at the entrance of the rental place, so that he could follow me to the hotel. I waited so long and noticed that there was no sign of him starting the car. I pulled over, parked my car, and walked down to him to check if anything was wrong. My friend, who gets slightly nervous now and then, was hell bent trying to figure out something underneath the dashboard. When asked, he said he couldn't find the switch to the headlights, which sounded silly to me. With my Jersey stupidity whirling around my brain, I tried my luck with lots of desperation, and hey, I couldn't figure out the switch either. The Pontiac had zillion switches in, around, and underneath the steering wheel and the dashboard, and it looked like a cockpit to me. Why on earth these guys make it so difficult? What do they do different than, say, a Honda or a Toyota. Why can't they make it simple? Then my last question is, why is Pontiac( and GM) losing money ,and why did GM plan to stop making Pontiacs anymore?

If the basic things work fine , and if the basic things are simple to use, any product should find it's place in the market place. Yahoo is the perfect example. From a simple idea of an Internet directory, the company has evolved as a mega Internet portal with very simple ideas. If we look back at the short history of Yahoo, we could learn some very interesting facts about this simple, yet powerful Internet gorilla.

Here are couple interesting Q & As from a very early interview that Yahoo founders Jerry Yang and David Filo gave in May 1995 ( Yahoo was founded in April 1994). I read them once in a while to get my batteries recharged. The interview will give you some motivation in some form for you to get going. You don't have to be a techie to understand the following text. I edited them for more 'simplicity'. Remember, success very often comes from hard work, dedication and yes, simplicity.

When did you start Yahoo, and did it start out just for personal use?

A: We started Yahoo in about April '94. It started out as a way for us to keep track of things that we were interested in. We began with a Mosaic hotlist, and we just added things to it. When our hotlist was about a hundred items or so, all you could do was scroll through it sequentially. Soon we couldn't find anything anymore because the list was so big and there was no way to search it.
So, we created some tools that allowed us to hierarchically categorize our links much the same way that many browsers like Mosaic and Netscape do today. Once we did that, finding previously visited links and adding new links became much easier. We then made the list available via the Web to make it easier to browse and added the search capability to make it easier to find specific entries.
And when did you guys realize that Yahoo was more than just your personal hotlist? Was that after a couple of months?

A: Probably about six months after we started. Things really changed in this respect when we added the ability for people to add their own links. At that point it was obviously no longer just for our own interests. We also began to add more functionality to make it more useful to a wider range of users.

Such as searching and graphics?
A: Searching was available from the very beginning, but we did improve things over time. The main improvements were in its ease of use and its efficiency. They were necessary improvements as the number of users grew and the demographics broadened. The graphics were also tweaked over time to make the pages as efficient as possible in terms of load time.

What about the size of the menu bar?

A: Even the menu bar was only about 1K. If you have a 14.4k connection, anything over 1K starts to become noticeable.

Whose HTTP server were you using?
A: We wrote our own. We were using the NCSA server in the beginning, and, around 100,000 to 200,000 hits a day, it was pretty much just killing the machine. So, we wrote a server that is extremely barebones.
And that's your own proprietary server?

A: Yes, for now. But, we'd rather use someone else's, like Netsite. We just haven't had time to switch over.

Does Yahoo only take about 30 meg?

A: Probably closer to 50 meg now because of the directory structure. The database stuff is probably close to 30 meg. All combined, it's a total of about 100 meg right now.

We heard that you guys were spending 15 to 20 hours a week updating URLs while you were in school, and that now it's probably even more time. Is this true, and how did you manage all the updating while you were in school?

A: Well, we didn't have classes; we were working on our thesis. And our advisor is out of the country on sabbatical.

Big surprise when he gets back and sees what you guys have done...

A: He's been very supportive of what we've done. Now we're both on leave and are devoting full time to the project.

How long will you be on leave from Stanford?

A: Well, we just took a leave starting this last quarter in April. Officially, it's two quarters that we'll be off. It kind of depends on how things go.

So your interest has shifted to the Web from EE?

A: Yes. This whole Internet thing is very intriguing. Plus, we're both more practical than theoretical, so the Internet is a better fit in that regard too. It's just a shame we couldn't combine the two so that we could have finished school.

Great stuff, isn't it? I just thought the interview is worth sharing with you all.
The core of the above text is just one word: simplicity. And till now, that's the success mantra behind Yahoo.

Probably Pontiac should have learnt a lesson or two from an Internet portal. Who knows, it might have saved this great American icon from becoming a history.

Good luck and see you in couple of weeks.


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