Yahoo Puts GeoCities Out of Its Misery

 
 
By Nicholas Kolakowski  |  Posted 2009-10-27
 
 
 

Yahoo finally shut down GeoCities, its free Web hosting service, on Oct. 26. Despite being a sentimental favorite of many who built Websites through GeoCities in its heyday, the service found itself losing both market- and mind-share over the years to newer offerings.

Yahoo originally acquired GeoCities in 1999 for $3.6 billion, hoping that millions of users would use the site's tools to create their own Web pages. During those heady days of the late '90s tech bubble, shares of GeoCities sold for $117 on the day of the deal announcement, while shares of Yahoo traded at $367.75.

However, the rise of blogs and social-networking sites such as MySpace and Facebook, which provide user-friendly tools and templates for creating an online presence, threatened to make GeoCities totally obsolete. During Yahoo's first-quarter earnings call on April 21, CEO Carol Bartz told analysts and investors that she would examine every aspect of the company's business and eliminate any underperforming units.

GeoCities may well have ended up on Bartz's self-described "Wall of Shame" of soon-to-be-eliminated products.

"Existing GeoCities accounts have not changed," said a posting on Yahoo's Help page soon after an April announcement that the service would shut down later in 2009. "You don't need to change a thing right now-we just wanted to let you know about the closure as soon as possible. We'll provide more details about closing GeoCities and how to save your site data this summer, and we will update the help center with more details at this time."   

Those users with regular GeoCities accounts who neglected to download their files and images before the Oct. 26 deadline now find their data inaccessible. Yahoo GeoCities Plus customers have the option of transferring their data to Yahoo Web Hosting, instructions for which can be found here.

"We have decided to focus on helping our customers explore and build relationships online in other ways," Yahoo's Help site offers by way of explanation for GeoCities' closing. "We recommend our award-winning Web Hosting service, which works a lot like GeoCities but includes a personalized domain name (such as widgetdesigns.com) and matching e-mail."

The demise of GeoCities plays into Yahoo's larger streamlining initiative. Since the beginning of 2009, the company has announced that it would cut 5 percent of its global work force of 13,600 workers, as well as re-focus on its core properties.

"The best candidate for focused investment and renewed innovation are those products that generate the majority of our traffic and corresponding economic value," Bartz said during that first-quarter earnings call. "These include the homepage, sports, news, finance, entertainment, mail search and mobile."

On Sept. 22, Bartz launched a $100 million branding campaign designed to highlight Yahoo's viability in the market, despite a partnership deal with Microsoft that would see Bing powering search on Yahoo's sites. Yahoo has also been losing ground in the search-engine market to Google over the past few quarters.

That deal with Microsoft would see Yahoo take over worldwide sales duties for both companies' search advertisers. Despite pulling out what Prabhakar Raghavan, senior vice president of Yahoo's Labs and Search Strategy, termed the "megawatt war" for search, Yahoo intends to remain an online presence with applications such as email. During an Aug. 24 press conference, Yahoo executives highlighted how they would tweak and add features to Yahoo Search, Yahoo Messenger, and Yahoo Mail-potentially luring more users to stay on the sites longer, attracting more advertising dollars.

Those sites, however, will no longer include GeoCities.

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