Paul Graham tells his his perspective about what went wrong with Yahoo!. Paul writes "When I went to work for Yahoo after they bought our startup in 1998, it felt like the center of the world. It was supposed to be the next big thing. It was supposed to be what Google turned out to be ... What went wrong?" According to Paul, "Yahoo had two problems Google didn't: easy money, and ambivalence about being a technology company."
One of the weirdest things about Yahoo was "they insisted on calling themselves a "media company." Whereas, the office actually looked a software company. So why did they call themselves a media company? One reason was the way they made money: by selling ads. In 1995 it was hard to imagine a technology company making money that way. Technology companies made money by selling their software to users. Media companies sold ads. So they must be a media company….The worst consequence of trying to be a media company was that they didn't take programming seriously enough. Microsoft, Google, and Facebook have all had hacker-centric cultures. But Yahoo treated programming as a commodity."
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