What Happened to Yahoo (2010)
Posted3 months ago
paulgraham.comOtherstory
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YahooCompany FailureStartup Lessons
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Yahoo
Company Failure
Startup Lessons
The article discusses the downfall of Yahoo, highlighting mistakes made by its management, and serves as a cautionary tale for startups and entrepreneurs. The discussion is minimal, but the article itself prompts reflection on what went wrong.
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Oct 9, 2025 at 6:35 AM EDT
3 months ago
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cs702Author
3 months ago
> By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "Eureka!" I was shouting "Sell!"
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