Jerry Yang and David Filo were graduate students at Stanford University in January of 1994 when they created a website that they called "Jerry's Guide to the World Wide Web," a directory that organized other web sites into a hierarchy. Four months later Yang and Filo renamed the search engine Yahoo! after a word used by Jonathan Swift in Gulliver's Travels. Swift's definition of Yahoo! was "rude, unsophisticated, uncouth."

At the end of 1994, approximately twelve months after its creation, Yang and Filo had over one million hits on their fledgling search engine. Understanding that they had designed something that could enjoy potential business success Filo and Yang incorporated Yahoo! early in March of 1995, fourteen months after its inception. Because the name Yahoo was already the brand name of other enterprises, human propelled watercraft, barbecue sauce, and knives, Yang and Filo were forced to add the exclamation point in order to trademark the name. Yahoo! had it first public offering on April 12, 1996. Two point six million shares of Yahoo! were sold at thirteen dollars a piece, earning a total of thirty-three point eight million dollars.

By the late 1990's Yahoo! and several other internet communications company's diversified into web portals.

In the late 1990's Yahoo! also started buying out other companies such as eGroups and GeoCities. Because Yahoo! had a reputation for changing terms of service when purchasing companies most of the buy outs were wrought with controversy.

Although it stocks fell to an all time lo, Yahoo! was able to survive the dot.com bubble burst. In order to help rebuild itself, Yahoo! started forming partnerships with telecommunication companies and internet providers, these alliances led to the creation of content rich broadband services that actively competed with AOL.

With their eye on the future, the powers in charge at Yahoo! are working on creating Yahoo!Next, a concept similar to Google Labs that contains forums that provide places for Yahoo! users to leave feedback that will hopefully assist in the development of future Yahoo! enterprises and technologies.

Like most successful companies Yahoo! is constantly working to improve and expand. Yahoo! currently provides its customers with a smorgasbord of internet services that cater o most online activities. These services include Yahoo! Mail, Yahoo! Groups, Yahoo! Maps and Driving Directions, and Yahoo! Messenger. While Google holds the top spot in search engines Yahoo! is standing strong in second place. Yahoo! competes against Yahoo! by offering its customers vertical search services such as, Yahoo! Image, Yahoo! Local, Yahoo! Shopping Search, Yahoo! Video, and Yahoo! News. Yahoo! is proud to boast the largest, most successful e-mail service in the world.

User generated content products such as Yahoo! Personals, Yahoo! Photos, Yahoo! 360, and Flicker offer Yahoo!'s customer's social networking services.

Yahoo! Shopping, Yahoo! Merchant Solutions, Yahoo! Store, Yahoo! Web Hosting, Yahoo! Domains, and Yahoo! Business Email are services Yahoo! provides to small business owners that allows them to develop their own online business using Yahoo!'s tools.

In March of 2004 Yahoo! launched a paid inclusion program that guaranteed commercial websites listings on Yahoo! search engines for a fee. While the paid inclusions were lucrative for Yahoo!, they where unpopular with the online marketing world. Business owners didn't want to pay the internet mogul for search engine optimization. Paid inclusion simply guaranteed that the businesses websites would be ranked; it didn't guarantee that it would be ranked in the first two pages.