The World at Their Fingertips

updated 12/04/1995 AT 01:00 AM EST

originally published 12/04/1995 AT 01:00 AM EST

A YEAR AGO JERRY YANG AND DAVID Filo were just a couple of grad students going through the motions of getting their Ph.D.s in engineering at Stanford. Then one day they discovered that they had the same obsession: making lists of their favorite pages on the World Wide Web. As a lark, they decided to offer their combined list to other Web wanderers—and now Yang and Filo are on the verge of becoming as well-known, say, as Hewlett and Packard.

The product of their late-night surfing is Yahoo!, a computerized index system that catalogs the Web, the hippest, fastest-growing part of the Internet. Many technogurus promise that the Internet will someday change the world. But at the moment it is hard to find the hot spots—without Yahoo! "Somebody could create a great Web page about soccer," says Filo. "But nobody would know it was there. What we did was organize the Web for people." In fact Yahoo!—which stands for Yet Another Hierarchical Officious Oracle—is contacted 6 million times a day by more than 500,000 users.

All the surfer has to do is click on Yahoo! and a list of topics—ranging from arts to social sciences—appears in alphabetical order. Click on entertainment, for instance, and another list appears: books, comics, TV, etc. Aware that their audience is mostly under 35, Yang, 27, and Filo, 29, whose offices are in Silicon Valley, Calif., created a category of "cool links," which, says Yang, catalogs "the coolest stuff on the Web"—including Web pages for the FBI's Ten Most Wanted and NASA's space shuttle. "What we have done has its own Yahoo! smell to it," he says. "It's got a lot of funk."

Yang came to his own funkiness by way of Taiwan, where he was born in 1968. According to Lily, his mother, he was irritatingly precocious. "Ever since he started to speak," she says, "he was very annoying, always asking, 'What is this?' 'Why?' He started to learn Chinese characters at 3."

When Jerry was 10, he and Lily and his younger brother Ken—the boys' father died when Jerry was 2—emigrated to the U.S., settling in San Jose, where he soon became a straight-A student. In 1990 Yang graduated from Stanford with bachelor's and master's degrees in electrical engineering. The job market was bleak, so he decided to get his doctorate and indulge his hidden slacker side. "I was quasi-retired at 23," he says, "playing a lot of golf."

In the Ph.D. program, Yang met Filo, whose childhood years had been spent in an alternative community in Moss Bluff, La., where his architect father, Jerry, and accountant mother, Carol, shared a garden and kitchen with half a dozen other families. Filo became involved with computers at Tulane University in 1984 and decided to do his grad work at Stanford. But after three years there he became disenchanted. "I wanted to work at a 10-person startup," he says, "but I didn't have the contacts to get such a job."

It was at this point that the aimless duo floated their list on the Internet. The response was so strong that they decided in April to turn their midnight hobby into a business, planning to make money through advertising and licensing fees from online services rather than charging for the service itself. Early on, they say, America Online tried to buy them out, but they wanted to run their own show. They did accept an offer from Netscape's Marc Andreessen, who loaned them first-class computers and access lines in return for a Netscape plug that appears whenever you call up Yahoo! They also got an infusion of cash from a venture capital firm in Menlo Park.

That doesn't mean they're getting rich. Until Yahoo! starts making a profit, Yang and Filo—who draw salaries in the $40,000 range—will continue to live in nondescript apartments with a few sticks of furniture. "It's all work and no play," complains Akiko, 27, a researcher for a Japanese telecommunications firm who has dated Yang for two years. At the moment, Filo and Yang can barely find time to sleep and eat. "Sleep," says Filo, wistfully, "is one of those commodities you wish you had taken advantage of when you had the chance."


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