Former CEO, Yahoo!
Born: 1951, in Alexandria, Virginia.
Education: University of Virginia, Charlottesville, BS, 1973; Stanford University, MS, 1975, PhD, 1977.
Family: Son of a machinist and mechanic (name unknown); divorced; children: none.
Career: Company that manufactured equipment for electronic manufacturing companies, 1977–1983, founder; Motorola, 1983–1992; Western Atlas, 1992–1995, corporate vice president and also president of subsidiary Intermec Corporation; Yahoo!, 1995–2001, CEO and president, 1999–2001, chairman of the board of directors.
Awards: Named one of the Top 25 Executives of the Year, BusinessWeek , 1999, 2000.
■ The venture capitalist and communications executive Timothy Koogle was recruited by Yahoo! founders David Filo and Jerry Yang as the first chief executive officer and president in March 1995, a month before the company went public. Koogle, who had nearly 20 years of operating and venture capital experience, along with a natural poise and seasoned professionalism, was an ideal match for the talented but inexperienced founders. Right from the start Koogle helped shape Yahoo! into a company with a $21.4 billion market capitalization (in 2001) and oversaw nearly $10 billion in critical acquisitions.
While growing up, Koogle was a race car enthusiast who liked to rebuild engines and aspired to become an engineer. In fact, when Koogle was five years old his father—who was a machinist and mechanic—began to teach him about repairing cars. Known for his industriousness, even before the age of 10, he sold gardening services to neighbors and later inspected
and repaired hamburger equipment for McDonald's, the fast-food provider. Koogle proudly stated that his father was the greatest influence on his life.
While attending the University of Virginia, Charlottesville, Koogle repaired cars to pay for many of his school expenses. In 1973 he graduated at the top of his class from the School of Engineering and Applied Science with a BS in mechanical engineering. Koogle was a member of both the Raven Society (the school's oldest and most prestigious honorary society) and the Omicron Delta Kappa honor society and was a self-described "antiwar radical." During his undergraduate days, Koogle impressed his professors, who asked him to teach an alternative course in automobile engine repair. He also restored antique cars and rebuilt and modified race car engines part time while earning his master's and doctoral degrees in mechanical engineering at Stanford University in 1977.
Koogle started his own company after graduation, making equipment for electronic manufacturing companies. He later sold the company to Chicago-based Motorola. After completing the sale, he began working for Motorola in 1983, spending nine years employed in the company's operations and corporate venture capital groups, where he attained a number of executive management positions. In 1992 Koogle became president of Intermec, an automated data collection and communications systems manufacturer located in Seattle, Washington, that had (earlier) invented bar code symbols. From 1992 to 1995 Koogle helped the company increase its sales by 50 percent to more than $300 million. During this time Koogle was also the corporate vice president of Intermec's parent company, Western Atlas, a multinational information services and technology company.
As the Internet grew in popularity in the early 1990s, Koogle became interested in the new technology. In 1995 a corporate headhunter informed Koogle about a small company called Yahoo!, whose four employees needed an experienced manager to run its business operations. Two of the employees were also the company's founders—David Filo and Jerry Yang—who had dropped out of Stanford University to develop their Web directory.
Even though Koogle was risking his career by switching from a large and growing company to a fledgling start-up with virtually no sales, he decided the change was worth the risk. He joined Yahoo! as CEO and president in 1995. Koogle's first job was to find the best way to make money from the millions of people who were surfing the Internet. He also needed to make Yahoo! distinctive from all of the other Internet portals that were crowding the new media source. He decided that Yahoo! should sell advertising from its free site to bring in revenue. At first, Filo and Yang were hesitant about the commercialized concept, but they finally came around to Koogle's novel idea.
Jeffrey Mallett, as Yahoo!'s chief operating officer, and Koogle, as its CEO, engineered an amazing campaign to make Yahoo! the most famous brand on the Internet. Mallett concentrated on the day-to-day operations of the company, while Koogle focused on developing large-scale partnerships and deciding where all revenues would come from. Critical in this action were several crucial deals that allowed Yahoo! to offer users specialized content, free e-mail, community offerings, and commerce. In 1996 Yahoo! began airing its humorous and now-famous tagline, "Do you Yahoo!?" Owen Shapiro, a senior analyst at the market and brand research firm Leo J. Shapiro & Associates, said of the advertising campaign, "The name contains the promise of the product. It reinforces the idea that when I go to Yahoo!, I'll be so pleased I'll be Yahooing afterwards" ( BusinessWeek , September 7, 1998).
By 1997 Yahoo!'s stock price rose over 500 percent from its initial public offering, making it the fourth-best performing stock on NASDAQ. Yahoo! soon announced that its earnings were twice as high as analysts' consensus estimates—creating an amazing market value of $6.09 billion, compared with a valuation of $334 million when it went public two years earlier. Yang said about the Koogle-Mallett team, "Without a doubt, there would be no Yahoo! as it is today without them. Their execution of our business plan has been key to the company's success" ( Wall Street Journal , April 10, 1998).
In just three years Koogle's practical wisdom helped the cofounders develop a valid business strategy that offered a tremendous array of services and information and that transformed Yahoo! from an untested concept to a very lucrative, one-stop Web site directory. While its competitors were working on faster software, Koogle hired experts to edit the Internet to bring order to a chaotic vehicle. As a result, by 1998 many stock analysts were calling Yahoo!, which had 40 million people logging on to it every month, one of the best Internet stocks. It was widely considered the new media company for the 21st century.
Koogle accomplished his feat with Yahoo! by keeping tight control on expenses and avoiding the capital losses that were so common with most fledgling Internet companies. Perhaps the most important asset in Koogle's arsenal was the power of Yahoo!'s brand name. But equally important was its strong asset base of hundreds of millions of dollars. During its first few years many companies were heavily investing in Yahoo!; for instance, Softbank Corporation invested $250 million to own 31 percent of the company.
Koogle built advertising revenues with a strategy of aggressively promoting the brand name, increasing services, and making sure that the operations of Yahoo! were distributed everywhere possible. Koogle insisted that the name Yahoo! be placed in high-profile arenas, including the two popular television shows Ally McBeal and Caroline in the City , the Oakland Athletics' professional baseball team, and the popular Comedy Central cable channel. Koogle had already placed Yahoo! on minor but still important places, such as T-shirts, computer bags, yo-yos, surfboards, parachutes, and shoes.
Knowing that mere name recognition was not enough, Koogle also aggressively acquired many companies as a way to expand Yahoo!'s services and fight off mounting competition. For instance, Yahoo! purchased ViaWeb for $49 million; Four11 Corporation, a free e-mail company, in 1997 for $92 million; and GeoCities for $3.5 billion. In January 1998 Koogle signed a partnership deal with the long-distance telephone giant MCI Communications Corporation to jointly market a special online services where the Yahoo! name received top billing. Koogle also dealt with such popular e-commerce companies as Amazon.com, CD-Now, and E*Trade to drive business Yahoo!'s way.
In all, Koogle continued to stress refinement of Yahoo!'s product by adding reliable access and by refining features such as personalized home pages, stock quotes, chat rooms, and free e-mail. By 1998 Koogle had expanded Yahoo!'s reach into 14 countries, with Web sites in nine different languages. With Yahoo! Japan as its most popular overseas site, Koogle estimated that 30 percent of its traffic came from outside North America.
By the late 1990s competition was fierce for Yahoo! as many established brick-and-mortar businesses, such as NBC/General Electric, Disney, Time Warner, and Microsoft sought to establish their presence on the Web. Their number-one enemy was the upstart but mighty Yahoo! With this in mind, Koogle and his troops worked tirelessly to make sure that Yahoo!'s Web pages were accessible anywhere and from any device. Koogle expanded the services offered by Yahoo! with the introduction of Yahoo! Wallet, which allowed users to register their credit cards and shipping addresses with Yahoo! so they could shop safely anywhere on the Web. Koogle directed Yahoo! to maintain a monthly online bill for its customers, again making it easy and safe to traverse the Internet. At the same time, Koogle was tailoring each person's Web page for particular tastes, interests, and buying history.
One of Koogle's main ideas was to use technology to provide people what they want on the Web. Koogle said, "I can picture Yahoo! as a big depository for people's preferences and consumption patterns. We'll have the ability to notify people of things they should tune into" ( BusinessWeek , September 7, 1998). By 1999 the company had grown to 800 employees, 2,200 advertisers, 35 million registered users, and profits of $25.6 million.
Under Koogle's leadership as CEO and chairman (he had been appointed to the latter post in 1999), Yahoo! grew from a relatively unknown startup to a leading global Internet media company with annual net revenues of more than $1 billion in 2000. Koogle had a visionary sense in developing Yahoo! by constantly pushing the company's horizon toward the future. During his tenure, BusinessWeek magazine named Koogle one of the Top 25 Executives of the Year in 1999 and 2000. Koogle also appeared regularly as an industry expert on many business and financially oriented broadcast programs such as CNBC, CNN/fn, and Fox News.
By 2000 the dot-com implosion was in full swing as the major stock market indexes reversed themselves after the long 1990s bull market, in which stock prices continually rose in value, came to an end. Koogle had a $295,000 salary and Yahoo! shares worth $365 million, but Yahoo! was no longer immune to the troubles that were plaguing other Internet companies. In 2000 Yahoo!, the Internet's number-one portal, had a stock price that was 90 percent below its peak of $237.50. Meanwhile, its market capitalization plunged from $100 billion to $10 billion as the market for online advertising unraveled at the seams.
Investors demanded something be done about the falling value of Yahoo! and its failed attempts to merge with companies. Eventually, sentiment from Wall Street showed that most analysts felt Yahoo! needed a new CEO who was from the media side, not the technology side (where Koogle came from). In March 2001 Koogle stepped down as CEO but remained in his chairman position. In 2003 he resigned from the company's board of directors, one of many changes that occurred in the two years following the naming of Terry Semel as the new CEO in May 2001.
Koogle was described as driven, savvy, decisive, and very focused, but he was also a southern gentleman with a strong character who often used folksy phrases reminiscent of his Virginia roots. His hobbies included collecting and playing vintage guitars and auto racing. Koogle served as the chairman of the board of directors for the Association for Automatic Identification and Mobility, the principal worldwide trade association for the automated data collection industry.
See also entries on Intermec Corporation, Motorola, Inc., Western Atlas Inc., and Yahoo! Inc. in International Directory of Company Histories .
Himelstein, Linda, with Heather Green, Richard Siklos, and Catherine Yang, "Yahoo! the Company, the Strategy, the Stock Today, It's the Lord of the Web. But Powerful Rivals Are Moving in Fast. Can Yahoo! Keep Clicking?" BusinessWeek , September 7, 1998, p. 66.
Swisher, Kara, "The Two Grown-Ups behind Yahoo!'s Surge," Wall Street Journal , April 10, 1998.
—William Arthur Atkins