Send us a text

In this episode, we examine the rise and fall of internet pioneer Yahoo through the lens of Brad Garlinghouse's explosive internal memo, which would become known as the "Peanut Butter Manifesto." From Yahoo's origins as "Jerry and David's Guide to the World Wide Web" to its peak valuation of $125 billion, and finally to its sale to Verizon for just 3.6% of that value, we examine how Garlinghouse's prescient warnings about Yahoo's fear of strategic commitment—spreading resources "like peanut butter" across too many initiatives—predicted the company's ultimate downfall. This is the story of how one employee's courageous diagnosis of corporate paralysis became a leaked document that exposed the fatal flaws of a tech giant.

Timeline of Yahoo's Rise and Fall

• 1994: Jerry Yang and David Filo create "Jerry and David's Guide to the World Wide Web"
• 1997: Yahoo revenue reaches $84 million
• 1998: Yahoo becomes the most visited website in the world with 400 million users
• 2000: Revenue explodes to $1.1 billion (1200% growth in 3 years)
• 2002: Yahoo passes on acquiring Google for $5 billion
• 2006: Brad Garlinghouse writes the "Peanut Butter Manifesto"; Yahoo offers $1 billion for Facebook, later reduces to $850 million (rejected)
• 2008: Microsoft offers $44.6 billion to acquire Yahoo (rejected)
• 2012: Marissa Mayer becomes CEO and launches the PB&J program
• 2013: Yahoo acquires Tumblr for $1.1 billion
• 2017: Yahoo sells to Verizon for $4.48 billion (3.6% of peak value)
• 2019: Tumblr sells for less than $3 million (99.7% loss)

Key Quotes

"Our strategy has been described as spreading peanut butter across the myriad opportunities... The result — a thin layer of investment spread across everything we do, and thus we focus on nothing in particular." — Brad Garlinghouse

"Yahoo was a company that never met a product extension it didn't like. They were constantly launching new products and features, but there was no coherent vision binding them together." — John Doerr, venture capitalist

"We never fully committed to being either a product company or a media company. We wanted to be both, which meant we were neither." — Jeff Weiner, former Yahoo executive

"It was the single worst decision in tech history. They turned down $44.6 billion out of pride and misplaced confidence." — Eric Jackson, activist investor, on rejecting Microsoft's offer

"Each new CEO brought their own vision and strategy. And just as we'd start making progress in one direction, a new CEO would arrive and pivot us in another." — Former Yahoo executive

Featured Insights

• Why the most dangerous form of organizational failure isn't making the wrong decision—it's the inability to make any decision at all.
• How fear of cannibalizing your own business often leads to someone else doing it for you.
• The importance of listening to employees who invest in your company's future

Link to Garlinghouse’s Manifesto

• Brad Garlinghouse's Peanut Butter Manifesto (Full Text)

Connect with Taras:

• Website: fear-incorporated.com

· LinkedIn: Taras Wayner

· Instagram: @fear_incorporated

· Email: fear@fear-incorporated.com