The Web's Future Is You

Yahoo's Filo and Yang say creative power will shift to the individual

If your blog suddenly requires pictures of the bulls running in Pamplona, you may find good photographs, free of charge, on Flickr. It's a Web site whose members post pictures of anything and everything -- conveniently tagged so that the endless cascades of images are actually easy to search.

This concept appealed to the creators of Yahoo! Inc. (YHOO ), the proto search engine that has evolved into a spinning galaxy of searchable content. In March the company purchased Flickr for undisclosed millions of dollars. Yahoo didn't invent the tagging software, interfaces, or other innovative twists found on Flickr. But by acquiring and integrating such sites, Yahoo has increased its gravitational force, emerging as the world's premier showcase of Internet innovations.

What drives this expansion is a desire on the part of founders Jerry Yang and David Filo to make their creation the most alluring destination on the Net. Yahoo now reaches nearly half a billion users in 25 countries and 13 languages. And what continues to draw crowds is its unwavering focus on whatever is new. For example, when Flickr ties together the ethos of community and search, "photos become a very different thing," Filo explains. "We're trying to push that in lots of different directions."

Yang and Filo were the first to prove that guiding people around a largely-free Internet could be a profitable business. Back in February, 1995, the two electrical engineering doctoral students at Stanford University were simply keeping a list of links to their favorite sites on a relatively new phenomenon called the Internet. Soon lots of folks were clamoring to use "Jerry and David's Guide to the World Wide Web," to which they quickly attached a snazzier name. Today, the company's business plan remains deceptively simple: The more time users spend with Yahoo, the more advertising the site can sell, and the greater the likelihood someone will pay for premium service or content. In 2004 sales rose 120%, to $3.6 billion, while net profits surged 253%, to $840 million.

Known as Chief Yahoos within the company, Yang and Filo leave day-to-day business matters to CEO Terry Semel. They spend their time contemplating a day -- fast approaching -- when broadband extends out to every electronic gizmo. With that, and the upwelling of communal energy typified by Flickr, the Internet's infancy is coming to a close, say the co-founders. The first period involved shifting real-world activities such as shopping and dating into a virtual world, dominated by the PC. But in the Net's second act -- the era of broadband -- creative power will shift into the hands of individuals, who will be just as likely to generate and share their own content as to consume someone else's. Then, sites like Flickr could evolve into shared pools of real-time footage on breaking news -- the floods, funerals, and affairs of state that bloggers have already tackled in the world of text.

Yahoo aims to continue its role as middleman in Act II, helping its members locate whatever content they seek, formatting the sights and sounds to fit the smallest cell phones or a wall-size TV. "I remember this photo somewhere," Yang muses. "I don't know if it was on the phone, or at home on a PC, or on my TiVo (TIVO ) or iPod. I need to do a cross-device search -- not looking for something 10 million people in the world need, but for the most important thing to me." It's a personalized future that Yang and Filo have glimpsed. The two dreamers may not invent it, but they are bound to help weave all the strands together.

By Cliff Edwards

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