Tim Koogle, vice–chairman and former chief executive officer (CEO) of the Yahoo! Web portal, will be remembered (along with Jeffrey Mallett) as half of the management duo that built the company into one of the mightiest on the Internet. He once told Saul Hansell in the New York Times, "I just love speed. And I love well–built, highly engineered machines." Though the former engineer used to build and race cars, most of Koogle's drive was channeled into creating a quick, high–performance Internet search engine. As head of the very popular Yahoo! Internet portal service, Koogle was in charge of one of the rare Web companies that turn a profit, and a handsome one at that. In January 2000, Yahoo!'s stock had peaked at a split–adjusted $237.50. In May 2001, Koogle left the top post but continued to serve as vice–chairman on the company's board of directors. Once listed on Forbes' 400 Richest People list, Koogle, who had company stock worth $365 million, was removed from Forbes' list in 2001 when his stock plunged.
Koogle was born on July 5, 1951, in Alexandria, Virginia. His father (both parents are now deceased) was a fire fighter and Navy machinist who taught him a strong work ethic early on. "He said nobody owes you anything, so go out and earn what you want," Koogle related to Hansell in the New York Times. Starting at the age of seven (with a crew of other seven year olds that he gathered) he earned cash doing gardening and delivering newspapers. His father also taught him to repair engines. As a 15–year–old teen too young for employment, Koogle obtained a special work permit so that he could fix machines at the local McDonald's and help his father repair cars. He was able to put himself through undergraduate college by doing engine repairs for professors.
In 1973, Koogle graduated at the top of his class from the University of Virginia's School of Engineering and Applied Science with a bachelor's degree in mechanical engineering. He worked his way through school by rebuilding race cars and restoring antique cars, and he also won a full scholarship for graduate studies at Stanford University. There, in 1975, he obtained his master of science and, in 1977, he earned a doctorate degree. In addition to rebuilding engines, as a graduate student Koogle started up his own industrial design business making controllers for electronics manufacturers. He later sold the operation to Motorola. By the time he earned his doctorate, he had saved enough money to buy a house.
Before Koogle's fast–paced career with Yahoo!, he played in various rock bands and continued to have the image of "an aging rock–and–roller," according to the article by Hansell, who described him as sporting "black jeans, a denim shirt and a mane of gray hair." Another reporter, Umberto Tosi of Forbes, described him as having a "GQ look, which runs to hand–painted Italian ties or black turtlenecks." Yahoo! marketing head Karen Edwards told Hansell, Koogle "is not one of those ego–CEOs who try to micro-manage everything. He is easy to talk to, but it always seems like he's pondering life's true meaning." As a further testament to Koogle's artistic bent, his circle of friends included a group of glass blowers outside of Venice, Italy.
With Yahoo!'s irreverent image and youthful staff (the average age of Yahoo! employees at the company's peak was 29), the graying and somewhat conservative Koogle was decidedly more low–key. He refused to spray paint his hair with the company's yellow and purple logo for a photo shoot, and he never tattooed the Yahoo! logo on his rear end, as had at least one other executive. However, Koogle was known for being willing to take risks, a quality that was essential when he decided to leave his stable job to join the staff of six at the tiny startup in the earlier days of the Web.
Koogle, who is known casually as "T.K.," has an older brother, Grayson, is divorced, and has no children. He owns homes in Saratoga, California, and on Lake Washington in Seattle, near the home of Microsoft founder Bill Gates. In addition to driving fast cars (his Mercedes reportedly could reach 170 miles per hour), in his spare time he enjoys playing guitar and collects vintage auto models such as a 1972 Stratocaster, a Beatles' Rickenbacker, and an acoustic D–41 Martin.
In 1983, Koogle went to work for Motorola, an electronics corporation specializing in communications equipment. He worked there for nine years in management in its operations and venture capital groups. During this time he was responsible for deciding whether to sink millions of dollars into business plans, thus learning all about risk–taking. However, Koogle never felt comfortable in his marble–floored office in an imposing tower. "I never could stand it," he commented to Linda Himelstein in Business Week. He left in 1992 to take a job as chief engineer at Intermec, a Seattle–based subsidiary of the Raytheon corporation making automated data collection and data communications products such as bar code machines. He was soon promoted to president of the ailing company and, in that post, more than doubled the firm's sales to $370 million. Also during that time he served as vice president of Intermec and Raytheon's parent company, Western Atlas, which boasted annual revenues of $2 billion.
Yahoo! began as a search engine in 1994 when Stanford University engineering students Jerry Yang and David Filo created a guide to assist fellow researchers in retrieving information from the Internet. Initially it was simply a list of their favorite sites, but as it grew they created categories for the listings. They developed software to help them locate and label material in order to categorize it, and the site became a useful database, grouped by umbrella categories such as "Business & Economy," "Education," and "Science," then getting more specific (such as "Astronomy," "Ecology," and "Physics"). Soon it was one of the best–known sites on the Web.
In 1995 Yahoo! sent a headhunter to Koogle, and he accepted the offer to become their president and CEO. Though many would balk at leaving an established company to head up a fledgling business in an uncharted field, he was excited. "I like building stuff," he remarked in the Daily Telegraph. "This looked great. It was going back full circle to my roots in Silicon Valley and start–ups. It looked like fun; joining something with a clean slate, six people, no business plan, the ability to craft a brand new enterprise in the face of a market which was probably going to be all about a major shift going on in the world." He added, "I have always had a lot higher tolerance for what most people would consider risk." In 1999 he was made chairman of Yahoo!.
Soon after he took over at Yahoo!, Koogle pioneered the idea of making money by signing companies to post banner advertisements directly on the site's pages, instead of charging users, which other sites were doing at the time. As it turned out, his plan became the standard way of business, and the Yahoo! site carried as many as 3,800 such advertising banners at one time. Also, Koogle broadened Yahoo! from being a search site into being a "portal," offering services such as free e–mail accounts, chat rooms, online auctions, and areas focusing on real estate, finance, health, and more. To use many of these services, Web surfers needed to register demographic information with Yahoo!, which the site then provided to businesses.
More notably, Koogle decided that Yahoo! would retain its independence, making it the "Switzerland" of the Web, while other sites teamed up with bigger corporations or signed exclusive agreements with advertisers. For example, the Excite search engine was sold to the At Home Corporation, owned largely by AT & T and cable firms, and competitor Infoseek was acquired by the Walt Disney Company. But these deals caused various problems for the parent companies. And, as Koogle mentioned to Kara Swisher in the Wall Street Journal, "When an Internet–based company combines with one that is purely one kind of access or one provider of content, the offering for user is a little bit more narrow. That may be totally viable, but it's not what has made us successful."
Instead, Koogle chose to do the buying, rather than allowing his company to be put on the auction block. Yahoo! purchased Geocities in 1999, a Web service that hosts a vast number of home pages, and then bought broadcast.com, an Internet audio and video service. In addition, Yahoo! teamed with Kmart to provide a free Internet service provider called Bluelight.com. It also began making money by charging retailers a fee for sales generated via its Web site, which allows Yahoo! to collect a commission on sales without the cost of stocking warehouses or paying customer service employees. However, after a deal in early 2000 in which AOL announced plans to purchase Time Warner Inc., many wondered if the iconoclastic portal would be able to keep its pace. Steve Rosenbush wrote in the May 2000 issue of Business Week, "The tremendous scope of Time Warner's assets seems likely to widen the gap. Most important right now, Koogle has to catch up in e–commerce."
Thanks to Koogle's leadership, Yahoo! began to turn a profit in September 1997, which was unusual considering the bulk of Internet ventures, including behemoth operations such as Amazon.com, had yet to operate in the black as of mid–2000. Koogle noted in the New York Times in 1999, "I still have conversations with people asking, 'Why do you bother with profits?' But I've had enough experience to know at a gut level that if you don't build a company from the start to be profitable, you're never going to be able to get profitable later." The company went public in 1996, earning about 90 percent of its revenue from ad sales at the time of its initial public offering (IPO).
Chronology: Timothy Koogle
1951: Born in Alexandria, Virginia.
1973: Graduated top of class from University of Virginia School of Engineering.
1975: Earned Master of Science degree in mechanical engineering from Stanford.
1977: Earned doctorate degree from Stanford.
1983: Joined Motorola.
1992: Joined Intermec as chief engineer, later became president.
1995: Recruited to Yahoo! as president and CEO.
1997: Yahoo! posted first profits.
1999: Named chairman of Yahoo!.
2001: Removed as CEO but stayed on as vice–chairman.
Though other search engines came into existence, Yahoo! continued to grow, adding elements such as free e–mail, chat rooms, news, auctions, and business services. By 1998 they were the most–visited site on the Web, with some 40 million users logging on each month. Their 1999 sales reached $588.6 million, according to Hoover's Online, with a net income of $61.1 million. By this time, the firm boasted almost 2,000 employees, a far cry from the handful on board just five years earlier. Though they later lost their lead to American Online (AOL), in May 2000 they were still the second–most visited Internet site with 48.3 million visitors per month as opposed to AOL's 59.8 million, according to Steve Rosenbush in Business Week. But by 2001, Yahoo was attracting more than 120 million worldwide users per month—making it the most popular Internet portal site in terms of traffic and global brand. Koogle once asserted to Andrew Cave in the Daily Telegraph, "We are trying to build Yahoo! into the only place anyone would have to go to find or get connected to anything or anybody."
But "Paradise Lost" was on the agenda for the following year. In January 2000, Yahoo! stock closed at an all–time high of a split–adjusted $237.50. Within days, company executives learned that main competitor America Online Inc. planned to purchase media giant Time Warner Inc., creating a new media empire that would drastically diminish Yahoo's presence in cyberspace. Internal dissention broke out, most over whether Yahoo! should try something similar. At first blush, the best strategy seemed to be the purchase of online auction site eBay, a move that Koogle opposed. But Yahoo! began to lose advertising revenues to competitors and, by November 2000, Morgan Stanley had downgraded its stock. Friction developed between Koogle and Yahoo! president Jeffrey Mallett. The first of several internal Yahoo management shakedowns occurred, which continued well into 2001 with the announcement that Koogle would be replaced as CEO. Meanwhile, water under the bridge, eBay was recording a 79 percent increase in revenues, up to $184 million. Had the merger gone through, Yahoo would not have needed to rely on advertising for 90 percent of its revenues.
Social and Economic Impact
Timothy Koogle demonstrated his risk–taking and entrepreneurial skills and his passionate drive for success by taking on a fledgling company and building it into one of the strongest search engines on the Web. Unfortunately, his managerial style and the decline of the Internet "boom" companies caused his departure from Yahoo!. Koogle once told Christian Science Monitor's Shelley David Coolidge, "The No. 1 thing my father taught me was to try to find what I really feel passionate about. If you feel passionate about something you'll probably be good at it, and if you're good at it, the rest will follow." He went on, "Never, ever turn it around . . . ." Koogle lived by his father's advice, and it carried him far. It is most likely good advice for all.
Sources of Information
Coolidge, Shelley David. "Bottoms Up!" Christian Science Monitor, 11 May 1998.
"Dropouts." Forbes, Annual 2001.
Elgin, Ben, et al. "Inside Yahoo!". Business Week, 21 May 2001.
Lau, Debra. "Forbes Faces: Yahoo!'s Timothy Koogle." Forbes, 29 January 2001.
Tosi, Umberto. "Yahoo!'s Tim Koogle." Forbes, 7 October 1996.
Koogle, Timothy 1951–
Former CEO, Yahoo!
Born: 1951, in Alexandria, Virginia.
Family: Son of a machinist and mechanic (name unknown); divorced; children: none.
Career: Company that manufactured equipment for electronic manufacturing companies, 1977–1983, founder; Motorola, 1983–1992; Western Atlas, 1992–1995, corporate vice president and also president of subsidiary Intermec Corporation; Yahoo!, 1995–2001, CEO and president, 1999–2001, chairman of the board of directors.
Awards: Named one of the Top 25 Executives of the Year, BusinessWeek, 1999, 2000.
■ The venture capitalist and communications executive Timothy Koogle was recruited by Yahoo! founders David Filo and Jerry Yang as the first chief executive officer and president in March 1995, a month before the company went public. Koogle, who had nearly 20 years of operating and venture capital experience, along with a natural poise and seasoned professionalism, was an ideal match for the talented but inexperienced founders. Right from the start Koogle helped shape Yahoo! into a company with a $21.4 billion market capitalization (in 2001) and oversaw nearly $10 billion in critical acquisitions.
REPAIRING CARS AS PROUD SON
While growing up, Koogle was a race car enthusiast who liked to rebuild engines and aspired to become an engineer. In fact, when Koogle was five years old his father—who was a machinist and mechanic—began to teach him about repairing cars. Known for his industriousness, even before the age of 10, he sold gardening services to neighbors and later inspected
and repaired hamburger equipment for McDonald's, the fast-food provider. Koogle proudly stated that his father was the greatest influence on his life.
While attending the University of Virginia, Charlottesville, Koogle repaired cars to pay for many of his school expenses. In 1973 he graduated at the top of his class from the School of Engineering and Applied Science with a BS in mechanical engineering. Koogle was a member of both the Raven Society (the school's oldest and most prestigious honorary society) and the Omicron Delta Kappa honor society and was a self-described "antiwar radical." During his undergraduate days, Koogle impressed his professors, who asked him to teach an alternative course in automobile engine repair. He also restored antique cars and rebuilt and modified race car engines part time while earning his master's and doctoral degrees in mechanical engineering at Stanford University in 1977.
FOUNDING A COMPANY AND VISUALIZING THE INTERNET
Koogle started his own company after graduation, making equipment for electronic manufacturing companies. He later sold the company to Chicago-based Motorola. After completing the sale, he began working for Motorola in 1983, spending nine years employed in the company's operations and corporate venture capital groups, where he attained a number of executive management positions. In 1992 Koogle became president of Intermec, an automated data collection and communications systems manufacturer located in Seattle, Washington, that had (earlier) invented bar code symbols. From 1992 to 1995 Koogle helped the company increase its sales by 50 percent to more than $300 million. During this time Koogle was also the corporate vice president of Intermec's parent company, Western Atlas, a multinational information services and technology company.
As the Internet grew in popularity in the early 1990s, Koogle became interested in the new technology. In 1995 a corporate headhunter informed Koogle about a small company called Yahoo!, whose four employees needed an experienced manager to run its business operations. Two of the employees were also the company's founders—David Filo and Jerry Yang—who had dropped out of Stanford University to develop their Web directory.
Even though Koogle was risking his career by switching from a large and growing company to a fledgling start-up with virtually no sales, he decided the change was worth the risk. He joined Yahoo! as CEO and president in 1995. Koogle's first job was to find the best way to make money from the millions of people who were surfing the Internet. He also needed to make Yahoo! distinctive from all of the other Internet portals that were crowding the new media source. He decided that Yahoo! should sell advertising from its free site to bring in revenue. At first, Filo and Yang were hesitant about the commercialized concept, but they finally came around to Koogle's novel idea.
AGGRESSIVELY ADVERTISING YAHOO!
Jeffrey Mallett, as Yahoo!'s chief operating officer, and Koogle, as its CEO, engineered an amazing campaign to make Yahoo! the most famous brand on the Internet. Mallett concentrated on the day-to-day operations of the company, while Koogle focused on developing large-scale partnerships and deciding where all revenues would come from. Critical in this action were several crucial deals that allowed Yahoo! to offer users specialized content, free e-mail, community offerings, and commerce. In 1996 Yahoo! began airing its humorous and now-famous tagline, "Do you Yahoo!?" Owen Shapiro, a senior analyst at the market and brand research firm Leo J. Shapiro & Associates, said of the advertising campaign, "The name contains the promise of the product. It reinforces the idea that when I go to Yahoo!, I'll be so pleased I'll be Yahooing afterwards" (BusinessWeek, September 7, 1998).
By 1997 Yahoo!'s stock price rose over 500 percent from its initial public offering, making it the fourth-best performing stock on NASDAQ. Yahoo! soon announced that its earnings were twice as high as analysts' consensus estimates—creating an amazing market value of $6.09 billion, compared with a valuation of $334 million when it went public two years earlier. Yang said about the Koogle-Mallett team, "Without a doubt, there would be no Yahoo! as it is today without them. Their execution of our business plan has been key to the company's success" (Wall Street Journal, April 10, 1998).
In just three years Koogle's practical wisdom helped the cofounders develop a valid business strategy that offered a tremendous array of services and information and that transformed Yahoo! from an untested concept to a very lucrative, one-stop Web site directory. While its competitors were working on faster software, Koogle hired experts to edit the Internet to bring order to a chaotic vehicle. As a result, by 1998 many stock analysts were calling Yahoo!, which had 40 million people logging on to it every month, one of the best Internet stocks. It was widely considered the new media company for the 21st century.
Koogle accomplished his feat with Yahoo! by keeping tight control on expenses and avoiding the capital losses that were so common with most fledgling Internet companies. Perhaps the most important asset in Koogle's arsenal was the power of Yahoo!'s brand name. But equally important was its strong asset base of hundreds of millions of dollars. During its first few years many companies were heavily investing in Yahoo!; for instance, Softbank Corporation invested $250 million to own 31 percent of the company.
Koogle built advertising revenues with a strategy of aggressively promoting the brand name, increasing services, and making sure that the operations of Yahoo! were distributed everywhere possible. Koogle insisted that the name Yahoo! be placed in high-profile arenas, including the two popular television shows Ally McBeal and Caroline in the City, the Oakland Athletics' professional baseball team, and the popular Comedy Central cable channel. Koogle had already placed Yahoo! on minor but still important places, such as T-shirts, computer bags, yo-yos, surfboards, parachutes, and shoes.
Knowing that mere name recognition was not enough, Koogle also aggressively acquired many companies as a way to expand Yahoo!'s services and fight off mounting competition. For instance, Yahoo! purchased ViaWeb for $49 million; Four11 Corporation, a free e-mail company, in 1997 for $92 million; and GeoCities for $3.5 billion. In January 1998 Koogle signed a partnership deal with the long-distance telephone giant MCI Communications Corporation to jointly market a special online services where the Yahoo! name received top billing. Koogle also dealt with such popular e-commerce companies as Amazon.com, CD-Now, and E*Trade to drive business Yahoo!'s way.
In all, Koogle continued to stress refinement of Yahoo!'s product by adding reliable access and by refining features such as personalized home pages, stock quotes, chat rooms, and free e-mail. By 1998 Koogle had expanded Yahoo!'s reach into 14 countries, with Web sites in nine different languages. With Yahoo! Japan as its most popular overseas site, Koogle estimated that 30 percent of its traffic came from outside North America.
By the late 1990s competition was fierce for Yahoo! as many established brick-and-mortar businesses, such as NBC/General Electric, Disney, Time Warner, and Microsoft sought to establish their presence on the Web. Their number-one enemy was the upstart but mighty Yahoo! With this in mind, Koogle and his troops worked tirelessly to make sure that Yahoo!'s Web pages were accessible anywhere and from any device. Koogle expanded the services offered by Yahoo! with the introduction of Yahoo! Wallet, which allowed users to register their credit cards and shipping addresses with Yahoo! so they could shop safely anywhere on the Web. Koogle directed Yahoo! to maintain a monthly online bill for its customers, again making it easy and safe to traverse the Internet. At the same time, Koogle was tailoring each person's Web page for particular tastes, interests, and buying history.
One of Koogle's main ideas was to use technology to provide people what they want on the Web. Koogle said, "I can picture Yahoo! as a big depository for people's preferences and consumption patterns. We'll have the ability to notify people of things they should tune into" (BusinessWeek, September 7, 1998). By 1999 the company had grown to 800 employees, 2,200 advertisers, 35 million registered users, and profits of $25.6 million.
Under Koogle's leadership as CEO and chairman (he had been appointed to the latter post in 1999), Yahoo! grew from a relatively unknown startup to a leading global Internet media company with annual net revenues of more than $1 billion in 2000. Koogle had a visionary sense in developing Yahoo! by constantly pushing the company's horizon toward the future. During his tenure, BusinessWeek magazine named Koogle one of the Top 25 Executives of the Year in 1999 and 2000. Koogle also appeared regularly as an industry expert on many business and financially oriented broadcast programs such as CNBC, CNN/fn, and Fox News.
STEPPING DOWN AS TOP YAHOO!
By 2000 the dot-com implosion was in full swing as the major stock market indexes reversed themselves after the long 1990s bull market, in which stock prices continually rose in value, came to an end. Koogle had a $295,000 salary and Yahoo! shares worth $365 million, but Yahoo! was no longer immune to the troubles that were plaguing other Internet companies. In 2000 Yahoo!, the Internet's number-one portal, had a stock price that was 90 percent below its peak of $237.50. Meanwhile, its market capitalization plunged from $100 billion to $10 billion as the market for online advertising unraveled at the seams.
Investors demanded something be done about the falling value of Yahoo! and its failed attempts to merge with companies. Eventually, sentiment from Wall Street showed that most analysts felt Yahoo! needed a new CEO who was from the media side, not the technology side (where Koogle came from). In March 2001 Koogle stepped down as CEO but remained in his chairman position. In 2003 he resigned from the company's board of directors, one of many changes that occurred in the two years following the naming of Terry Semel as the new CEO in May 2001.
Koogle was described as driven, savvy, decisive, and very focused, but he was also a southern gentleman with a strong character who often used folksy phrases reminiscent of his Virginia roots. His hobbies included collecting and playing vintage guitars and auto racing. Koogle served as the chairman of the board of directors for the Association for Automatic Identification and Mobility, the principal worldwide trade association for the automated data collection industry.
See also entries on Intermec Corporation, Motorola, Inc., Western Atlas Inc., and Yahoo! Inc. in International Directory of Company Histories.
sources for further information
Himelstein, Linda, with Heather Green, Richard Siklos, and Catherine Yang, "Yahoo! the Company, the Strategy, the Stock Today, It's the Lord of the Web. But Powerful Rivals Are Moving in Fast. Can Yahoo! Keep Clicking?" BusinessWeek, September 7, 1998, p. 66.
Swisher, Kara, "The Two Grown-Ups behind Yahoo!'s Surge," Wall Street Journal, April 10, 1998.
—William Arthur Atkins
Timothy Koogle is CEO of Yahoo! Inc., the most heavily trafficked Internet portal in the world with roughly 100 million visitors every month. For free, Yahoo! browsers can do everything from sending and receiving email and searching for old classmates to booking airline flights and car rentals and creating online photo albums. Koogle oversaw Yahoo!'s growth from a small upstart Internet search engine company in 1995 into an online powerhouse that offers more than 400 different services to its individual and business customers. Koogle is also credited for parlaying the firm into one of the few dot.com ventures to actually earn a profit. Although he announced plans to step down as CEO Yahoo! in 2001, Koogle will remain chairman.
After completing his undergraduate work in mechanical engineering at the University of Virginia in 1973, Koogle began pursuing a graduate degree at Stanford University. He earned a Master's degree in electrical engineering in 1975 and a Ph.D. in mathematics a few years later. Koogle paid for school by working as an automobile mechanic for his fellow students. An attempt to create his own robotics company fizzled in 1982, and Motorola Corp. hired him a year later as a management executive. In 1992, Koogle was named president at Intermec, a data communications firm based in Seattle, Washington, known for creating bar-code technology.
In early 1995, Yahoo!'s young founders, 27-year-old Jerry Yang and 30-year-old David Filo, began searching for a seasoned executive to run the business that had started with a simple list of favorite World Wide Web sites. Yang and Filo knew they lacked the management experience to run a company, and they sought someone with an entrepreneurial spirit who could also lend the fledgling firm credibility. When they asked the 49-year-old Koogle to head up Yahoo!, he was still working for Intermec, which was owned by Litton Industries. His frustrations there over Litton's reticence to let him pursue rapid growth outweighed his uncertainty about the viability of a Web-based business. Koogle agreed to run Yahoo! in May of 1995. The firm's lucrative initial public offering in April 1996 allowed Koogle to launch an acquisition spree that would eventually exceed $10 billion. In September of 1997, Yahoo! bought a news delivery service, as well as technology that allowed it to add people-searching and e-mail capabilities to its free online services. Purchases in the following year allowed Yahoo! users to play games and shop. Koogle also oversaw two major deals in 1999: the $4 billion acquisition of Geocities and the $5.7 billion acquisition of video service provider Broadcast.com. Koogle's reason for the bold growth strategy was simple: the more features, services, and content Yahoo! offered, the more visitors it would attract. More visitors meant more advertising dollars.
Advertising is what allowed Yahoo! to set itself apart from other dot.com upstarts because it was advertising that enabled Yahoo! to achieve profitability. The firm developed technology that allowed it to monitor a visitor's online activity and also control what banner bars and button ads are displayed on the pages that visitor is browsing. Yahoo! is also able to monitor how many hits an advertisement receives, a valuable tool for determining an advertisement's reach.
Business Week named Koogle one of the "Top 25 Executives of the Year" in 1999. That year, Yahoo! became the only Internet-based venture besides America Online to be listed on Standard & Poor's 500 stock index. Yahoo! stock reached a high of $237.50 per share in January 2000. Like most other Internet-based ventures, though, Yahoo! saw its share prices begin to crumble when the U.S. economy slowed down later in the year. The firm was hit particularly hard because its advertising revenue came mainly from the dot.com ventures that were forced to slash their advertising budgets as they fought to stay afloat. Yahoo! began securing advertising from bricks and mortar firms; because they were also tightening their advertising budgets, though, Yahoo! was unable to line up new customers as quickly as Koogle had hoped. To reduce the firm's reliance on advertising, which accounted for roughly 85 percent of annual sales in 2000, Koogle began steering Yahoo! into new fee-based services for consumers, such as online bill paying and auctioning objects for sale. New services for corporate clients included e-store management services.
Koogle's efforts failed to turn Yahoo! around quickly enough to satisfy investors. In 2001, when rumors began to circulate that Yahoo! was vulnerable to a takeover, the firm implemented a poison pill, which is a shareholders' rights program that makes a hostile takeover very costly for a buyer. In March of that year, with Yahoo's stock hovering at roughly $21 per share, Koogle announced his intent to step down as CEO of Yahoo! as soon as a replacement was found.
"A Class Act at Yahoo!" BusinessWeek Online, January 10, 2000, Available from www.businessweek.com.
Hardy, Quentin. "Building Yahoo!'s Arcade." Forbes, December 11, 2000.
——. "The Killer Ad Machine." Forbes, December 11, 2000.
Tessler, Joelle. "Yahoo Struggles to Survive: Dot-Com Shake-out Forces New Direction." San Jose Mercury News, March 8, 2001.
Umberto, Tosi. "Yahoo!'s Tim Koogle." Forbes, October 7, 1996.
SEE ALSO: Yahoo! Inc.