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Livingston: Did you make a bid for the button Brady: We bid up to a certain point in which we felt comfortable that we could
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make a return on money. After which point, we knew it became investing in the brand, and I don t think we felt comfortable investing in the brand at that point. Because we didn t know how big the Internet was going to be at that point. Even though the press was going crazy, the numbers were still pretty small compared to any other media. I think it was $5 million that Excite paid for that button. We definitely worried about Excite, and we were worried about Microsoft. In the summer of 95, Bill Gates sent out one of his famous memos on the Internet. I think this was one of the first ones. It talked about Microsoft needing to get in the game, and he ended the memo with: My favorite site: Yahoo. Cool. Cool. Cool. At first our reaction was, Yeah, cool, cool, cool, and then our next thought was, Oh no. Does that mean we re in Bill s crosshairs or does that mean we re just cool Any time you talk to Microsoft, just the way they do business, they have the potential to do whatever the hell they want, so when you go to them their mindset is always, We could partner with you, or we could do it ourselves. We were always very nervous about them doing anything. At the time, I think IE had just come out, and it was a poor effort, their first crack at a browser, but still, you knew that they were going to grow. There was always that threat looming over us. There was also a handful of other competitors: Lycos, WebCrawler. Also, AOL was growing faster than the Internet for a period of time. Everyone heard Internet, but then they went and signed up for AOL because it was the easiest way to get online. Although we thought it was crazy, AOL s walled garden was bigger than the Internet for a handful of months there, which made our strategy impossible. That was definitely a threat.
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Livingston: Did you ever see anything on a competitor s site where you said,
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They just launched this feature; we have to do it now.
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Brady: In the early days, not too much. Jerry and Dave were way ahead of the
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curve. The ideas that they had really early on were right strategically and creatively. So everything we did through the middle of 97, invariably we were first and we did it very well. The one thing we didn t do that all our competitors were spending a lot of time doing was search. They were crawling the Web and doing full text search, and our strategy was, Look, that s a technology game. We re not a technology company, we re a media company. Since there are so many of them out there, we re always going to be able to rent it. That was the thought back then, and until Google came along that strategy was perfect. Because, as things played out, that s exactly what happened. We had this searchable directory. It was big, and it had all the popular sites, so you could search for anything on it. But it didn t have everything. If you really wanted to search for that needle in the haystack, that wasn t us. But we
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Tim Brady 133
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had a lot of those people. They would read an article, then go to the Web and think, I can find anything on Yahoo. The expectation when they came to Yahoo was that they could find anything, but we didn t necessarily deliver on that needle in the haystack expectation. So what we did was that we searched our directory first, we gave you those results, and then, if we didn t find anything, we kicked you over to a full-text search. So, when I say we rented that technology, we essentially partnered with full-text search companies to be the falloff searches that we had.
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Livingston: That s what you did with Google Brady: Yes. Strategically, it was spot-on until Google showed up. Because we always thought it was going to be a leapfrogging game. No one is ever going to be able to get so far ahead that we d ever be in strategic risk of kingmaking a full-text search engine, because you just can t do that. Google ended up doing exactly that. At the time, until 2000/2001, we had Open Text first, then I think we had AltaVista, then Inktomi. So we just switched off as better technologies became available. We just switched out the old partners with the new ones and always had the best-of-breed search as our falloff. Livingston: Was this invisible to the users Brady: Yes, it was largely invisible to our users. Even though their brands were
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there, you came to the front page of Yahoo; you searched; the search result had a Yahoo brand on the upper-left and the technology provider had a smaller brand. We tried to make it as seamless as possible.
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