Yahoo!, eBay and Amazon: The three survivors: Economist

Jun 19th 2008 | SAN FRANCISCO
From The Economist print edition
Illustration by David Simonds
What the diverging fates of Yahoo!, eBay and Amazon say about the internet

AND so Yahoo! survives. The internet company—which, at the age of 14, is one of the oldest—appears in the end to have rebuffed Microsoft, the software Goliath that wanted to buy it. It has done so, in part, by surrendering to Google, the younger internet company that is its main rival. In a vague deal apparently designed to confuse antitrust regulators, Yahoo! is letting Google, the biggest force in web-search advertising, place text ads next to some of Yahoo!'s own search results. Google thus controls some or all of the ads on all the big search engines except Microsoft's. Yahoo! lives, but on the web's equivalent of life support.

Yahoo!'s descent, first gradual then sudden, during this decade marks a surprising reversal of the fates of the only three big internet firms to have survived since the web's earliest days. Back in 1994 Jerry Yang and David Filo, truant PhD students at Stanford, started to publish a list, eventually named Yahoo!, of links to cool destinations on the nascent web. Around the same time, Jeff Bezos was writing his business plan for a website, soon to be called Amazon, for selling books online. The following year, Pierre Omidyar, a French-born Iranian-American, put an auction site on the web that would become eBay.

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