PUNE: Yahoo! was founded by David Filo and Jerry Yang, Ph.D. students at Stanford University, who started it as a hobby in February 1994 to keep track of their personal interests on the Internet.

When their lists became too long and unwieldy they broke them out into categories, then subcategories and so the core concept behind Yahoo! was born in January 1995, three years before two others from Stanford founded Google.

Google: Corporate History

Yahoo! is an acronym for "Yet Another Hierarchical Officious Oracle," but adopted more for connotations like "rude, unsophisticated, uncouth."

The company hit the first million mark in site hits in 1994, with a claimed number of 100,000 unique visitors. It was funded in April 1995, by Sequoia Capital with an initial investment of nearly $two million.

The founders passed the baton of managing the company to CEO Tim Koogle, and Jeffrey Mallett, who took over as the COO.

In 1995, Yahoo! a second round of funds from investors Reuters Ltd. and Softbank. The IPO came in April 1996 when it had 49 employees, a number that has over the years grown to 12,000 Yahoos (employees) and more than 500 million unique visitors.

After a controversial ouster of CEO Terry Semel last year, today the company is again led by CEO and chief Yahoo Jerry Yang, president Susan Decker, chief financial officer Blake Jorgensen, and co-founder/chief Yahoo David Filo.

The company is headquartered in Sunnyvale, California. Basically an Internet services company, Yahoo's portfolio includes a Web portal, a search engine, the Yahoo! Directory, Yahoo! Mail, news, and posting.

Yahoo diversified into a Web portal, in the late 1990s, when Yahoo, MSN, Lycos, Excite and other Web portals were growing rapidly. The terrain of Web portals has since then seen a slew of major takeovers and acquisitions and in 1997, Yahoo acquired online communications company Four11. Four11's webmail service, Rocketmail, became Yahoo Mail.

Yahoo also acquired ClassicGames.com, which was rechristened as Yahoo Games. Next to come was the direct marketing company Yoyodyne Entertainment, Inc. in 1999, and another acquisition of web hosting provider GeoCities came along.

Its inorganic additions include eGroups, which became Yahoo Groups after the acquisition on 2000. Yahoo launched Yahoo Messenger on 21 July 1999.

In fact, Yahoo was one of the few surviving large Internet companies after the dot-com bubble burst. It also formed partnerships with telecommunications and Internet providers to compete with AOL.

In late 2002, Yahoo began to increase its might in search services by acquiring other search engines like Inktomi and later in 2005, Konfabulator that was redone as Yahoo Widgets, and in July 2003, it acquired Overture Services, Inc. through which came subsidiaries like AltaVista and AlltheWeb.

In 2004, Yahoo started using its own technology to provide search results. In India, Yahoo has a headcount of 1,500 people.

Microsoft Corp

Microsoft was founded in 1975 and marked a total headcount of around 78,565 employees with a net revenue of about $51 billion at a growth rate of 15 per cent for the fiscal year ending June 30, 2007.

Its net income stood at $14 billion, marking a 12 per cent growth rate. US constituted 47,645 people out of its total talent pool. Its Global CEO is Steven A Ballmer after Bill Gates passed him the position and headed himself for the chief software architect chair.

Its portfolio consists of platforms and services like the Windows Business Group, Online Services, the MS Business division, and the MS Entertainment and Devices division.

The company has operation centers for Licensing, Manufacturing, operations and Logistics in Dublin, for manufacturing in USA and for Operations and logistics in Singapore. A look back at the history shows Microsoft's natural progression to Yahoo!

After some rough first years, the license of MS-DOS to IBM happened which signaled the success of Microsoft. The company went public in 1986, turning founder Bill Gates into a 31-year-old billionaire.

After a phenomenal success of Windows, which was introduced the very next year, it was in 1995, when Gates sniffed that the Internet was the next pot of gold, and this shifted the strategic course of Microsoft. Microsoft bought Hotmail in 1998.

Internet Explorer browser soon became a bestseller, beating Netscape in 1999.

Today, The online advertising market is growing from over $40 billion in 2007 to an estimated $80 billion by 2010.

Microsoft India operations started in 1990 and is currently headed by Ravi Venkatesan, chairman, Microsoft India. In India, it had been active in areas like projects for Indian government, IT industry, academia and local developer community besides significant research and support happening out of the country.

Its major divisions here include Microsoft Research India, Microsoft India Development Centre (MIDC) and MS Global Services. Hyderabad-based MIDC currently boasts of a headcount of 1,400 people, and has filed 180 patents in the last three years.

Acquisitions

According to some back-of-the-envelope calculations, Google has acquired 45 businesses in seven years making it about 6.43 acquisitions per year. Yahoo acquired 52 businesses in 11 years (about 4.73 acquisitions per year). Microsoft acquired 102 businesses in 22 years with an average score of about 4.64 acquisitions per year.

The major seismic wave happened when Google acquired Double Click, that Microsoft too had its eye on and which apparently, as hypothesized by some analysts had the potential of giving Google 80 per cent of the ads served on the Internet.

On Microsoft's side, meanwhile there was the aquisition of aQuantive, Inc, in 2007 that gave it a digital marketing and advertising solutions company for $six billion.