The strange saga of Yahoo and WebRing

The sad tale of a hip little software program for linking Web sites together that was swallowed by by a once-hip behemoth -- then crashed and burned.

Published December 5, 2001 7:30PM (EST)

It was a day known forever after as "Black Tuesday" or "The Day the Rings Died." On Sept. 5, 2000, the day Yahoo assimilated WebRing, the "ringmasters" responsible for tending the chains of Web sites linked together by WebRing software fumed with pitched fury.

Protest sites sprang up proclaiming the outrage of webmasters who saw themselves losing control to an all-devouring corporate overlord. On one especially melodramatic site, Edvard Munch's "Scream" wailed next to this lament: "The toll has been terrific. Rings are dead or dying everywhere ... Yet, we are victims and it's time that someone hears our Screams." Another site blared the theme music to "Mission Impossible" while displaying an image of a skull in a top hat with the logo of the new master.

WebRing is essentially little more than a way for sites devoted to similar topics to share links and boost each other's traffic. But to its fans, it makes beautiful order out of chaos. However, from all the wailing and moaning, you'd have thought a marauding King Kong bot had barged into these sites and started ripping out great hunks of HTML. Even now, more than a year later, after the somewhat anticlimactic liberation of WebRing from supposed Yahoo tyranny, the ringmasters are still angry.

"Yahoo took one of the best things on the Internet, a method by which ringmasters could create little garden paths through the uncharted wilds of the Web, and completely ruined it," says Richard Lowe, a webmaster whose sites include USA Memorial, a commemoration of Sept. 11.

The sorry saga of WebRing is just a squinty footnote in the history of one of the Web's biggest, still-standing companies, Yahoo. But it tells more about what was sacrificed on the Web in the Great Internet Bubble than a terabyte of spreadsheets detailing paper losses. It's what happened when a nifty little homegrown Web phenomenon that was never designed to make money got swept up and sucked in by the boom, only to be orphaned in the bust.

Today, WebRing once again has the chance to try to make it as an independent, guided by the members of its community. In mid-October, Yahoo sold WebRing to Tim Killeen, one of the early engineers who'd worked on the system. It seemed like a happy ending made for the Net: WebRing comes full circle!

But some ringmasters wish that the whole system had been put out of its misery: "Personally, I wish WebRing had just died. I think it's been decaying for quite some time and I don't see that it's going to be recovered," says Lowe.

And as for Yahoo? The once-mighty portal beloved by millions -- in part because it represented the original do-it-yourself spirit of the Net -- is now scrambling desperately, like everybody else, for ways to make a buck. Its inability to figure out what to do with WebRing is symbolic of the entire dot-com failure to transform the Net into a cash register.

Yahoo may still find the secret formula, though whether anyone will care is another question. After the boom and the bust, it's easy now to wonder if the do-it-yourself Net ever could have had a happy capitalist future. In any case, post-bubble, mid-recession, the execs of Yahoo and the ringmasters of WebRing are both struggling to survive. Now, Yahoo hopes to turn a fraction of its 218 million "users" into "customers," to make up for dramatically reduced advertising revenues. And WebRing has no greater ambition than to find a way to keep running obscure circles around the Net, without a multinational corporate parent to lean on or rail against.

There is some poignancy to the emergence of Yahoo, of all companies, as the target of ringmaster rage, since both WebRing and Yahoo grew out of the same experimental spirit of the mid-'90s Internet.

Of the initial portal companies -- Lycos, Excite, AltaVista -- Yahoo flourished, largely by capitalizing on grass-roots Net culture.

Today, that's a business strategy that sounds positively hokey in its utopian earnestness, but it worked -- for a while. From a side project of two Stanford grad students, the company grew to $1.1 billion in revenue last year, 90 percent of it from advertising, by focusing with laser intensity on a strategy of capturing the best of what bubbled up on the Net, polishing it up and then giving it away for free.

Gobbling up the most popular hits on the Net, from GeoCities' free home pages to eGroups' mailing lists and obscure oddities like WebRing, Yahoo built an ever bigger audience, trading its bloated stock to buy more treats to give away, while advertisers paid the bills. According to Nielsen/NetRatings, in October of this year, slightly more than half of the Net's entire population used Yahoo.

But the double whammy of the stock-market bubble bursting and the advertising drought have hammered Yahoo. The company's stock hovers around $16, down from a January 2000 high of $237 a share. Its projected revenues for this year are down to $700 million.

The company is now obsessed not with aggregating the best of what the Net has to offer, only to give it away, but instead with charging for what they used to give away, and building new services that will require an admission fee. Even the deal maker kingpin, Ellen Siminoff, whose acquisitions drove the company's old buying-spree strategy, is gone.

Now Yahoo is cutting deals with ISPs to offer high-speed Internet access, and selling prominent placement for paid listings on its directory pages. There is also an ever-increasing set of expanded premium services, in which users are charged for everything from souped-up games and music services to personal ads.

Elizabeth Blair, vice president of Yahoo's business and local media group, explains Yahoo's new pricing plan for personal ads this way: "It's free to list, it's free to look. But if you see this person, and you think they're right for you, we're going to make you pay for it. That's just the way life is these days."

CEO Terry Semel projects that by 2004, just 50 percent of the company's revenues will come from advertising, whereas today it's some 80 percent, down from 90 percent last year. But so far, it's the loss of advertising revenue, not the growth of premium services, that appears to be changing relative percentages. In the third quarter of this year, Yahoo's revenue from sources other than advertising increased just three percent from the second quarter to $34 million.

It's hard not to conclude that in a bid for survival the new Yahoo is turning its back on what drove its popularity in the first place. One view on what made Yahoo a survivor, unlike Excite and other imitators, it that it avoided the crasser commercial excesses of its race-to-the-bottom competitors. While other sites loaded up their home pages with bulky images favored by advertisers, Yahoo kept it simple and idiot-proof, always catering to the most humble home user on a slow connection. While other sites sold out the editorial integrity of their directory listings, Yahoo's hands remained clean. (Although it has long had a service in which businesses could pay to get their Web site listed in Yahoo's directory pages on an expedited basis.)

Executives defend the new moves, as not only necessary, but consistent with what Yahoo stands for: "What we find is that the Yahoo brand is associated with personalization, innovation, community and connections," says John Costello, the company's chief global marketing officer. He doesn't think that charging for some content will alienate Yahoo's huge audience: "The Yahoo brand does enjoy tremendous loyalty from customers, but the research does not suggest the inability to provide premium services."

Imagine if a Yahoo spokesperson had mouthed such new economy platitudes in the early days -- it would have been laughed off the Net. It's a world away from the Yahoo that thrived on rounding up Net phenomena under one great banner called Yahoo! -- effectively underwriting the hobbies of millions of webmasters through the good graces of advertising.

Still, it's too simple to cast the old Yahoo as some early-Net halcyon ideal, fallen from grace in a bitter struggle to survive. Buying up the best of the grass-roots Web brought with it its own problems, namely Soviet-style centralization that was anathema to the distributed culture that had created those so-called Web properties in the first place. The citizens of the Unified Republics of Yahoo did not always take kindly to their new leaders.

While Yahoo boomed, WebRing looped along in relative obscurity. Essentially a way for sites to share links with each other, rings all focus on the same subject matter, whether it's the work of Jane Austen, a ring of 52 sites, or Gay, Lesbian, Bisexual & Transgendered Disabled veterans of America, a ring with 274 sites.

WebRings form online communities in the truest sense of the overused phrase. They represent webmasters banding together to turn their scattered sites into something larger. If the online community of a GeoCities is more like a planned suburb where no one really talks to each other, WebRings is an overgrown village, bursting organically at the seams.

The rings themselves can be sublimely obsessive in their absurd exhaustiveness. One ring, called Scotties, contains no less than 96 sites on Scottish terriers. But at the most grandiose, WebRings can be seen as nothing less than an alternative way to navigate the Net. Flitting from one site to the next in a circle of sites on related topics selected by a human being is a different way to surf the Net than scanning the results of a search engine. Small, truly obscure sites that would likely be buried by a search-engine results page or never make it into Yahoo's own directory find a home in the right ring.

Back in 1995, a blond, baby-faced Oregon 17-year-old, named Sage Weil, created his first WebRing, inspired by a circle of sites called EUROPa, an acronym for Expanding Unidirectional Ring of Pages. The first ring he created grew to include 741 sites, and it still exists, tended by Andrea Stalnecker, 31, a stay-at-home mom in Central Pennsylvania, who is herself the ringmaster of some 40 rings.

Weil eventually wrote his own software program to create and manage rings. WebRing was essentially peer-to-peer, before the buzzword. It provided an easy way for ringmasters to create new rings, add sites and organize them. And it took off. Launched in mid-1996, by 1997, there were over 1,000 rings. By May of 1997 over 10,000. By April 1998, 40,000, and by Jan. 2000, 80,000.

But popularity brought new burdens. Although a Web ring was really just a unique collection of links, along with the descriptions of the sites in each ring, by 1997 even that piddling amount of information was overloading Weil's servers. He had neither the bandwidth, nor the time, to oversee an expansion.

"He was getting ready to go off to college," explains Killeen, who was working as an engineer at a small Ashland, Ore., company called Starseed, which bought WebRing from Weil.

The engineers at Starseed had big plans for WebRing. They saw it not just as another grass-roots community, but as a different way of navigating the ever burgeoning Web.

Then, in turn, the Web page hosting company GeoCities decided that it could use WebRing's technology to turn the millions of its so-called online communities into real communities. WebRing's technology, GeoCities hoped, would encourage traffic across all the GeoCities-hosted sites by linking them in rings, thus boosting advertising impressions. "They were really keen on WebRing, because it was just what they needed to organize all of those user sites together," explains Killeen.

It was a typical Internet business scheme: The value of the technology would make hosting the community worthwhile, even though the community showed no prospect for ever being profitable. WebRing couldn't even put ads on the sites in the rings, because it had no claim to the sites themselves -- just the links between them.

Plus, WebRing purposely did not require surfers to drill down from a central start page -- a hot ad property. It was a distributed network that sent surfers only onto the next link in the ring. "WebRings are designed to let you go between two sites without ever going through a central service," says James Huggins, 47, from Dallas, Texas, a devoted ringmaster who spends two to three hours a week on his rings and keeps the unofficial F.A.Q. The elliptical appeal of the rings is that most people find them by stumbling upon them by chance. Find one, and follow it to the next link in the chain. While it's possible to search a directory of all the rings, such top-down searching is not really what the system is about.

No matter, in late 1998, GeoCities bought Starseed for 775,000 shares of stock and $2 million in cash, a deal that, given Geocities' loopy stock price, valued what had been Sage Weil's high school hobby at $30 million.

But the deal had hardly been consummated before Yahoo, in turn, was gobbling up GeoCities.

In early 1999, Yahoo was fully in the throes of its late-'90s Internet business utopianism. We were all going to Internet heaven and someone else was going to pay for the lift ticket on the celestial ski lift. Using its own inflated stock price during the market's Internet hysteria, Yahoo funded some of its biggest acquisitions, including the GeoCities deal -- which cost the company a staggering $2.87 billion in stock to buy 3.5 million free, personal home pages. The tremendous popularity of Yahoo's free services fueled demand for banner ads on the site, driving up the company's stock price and in turn funding more acquisitions.

WebRing was just an afterthought in the GeoCities deal. All the grand plans to use WebRing's technology to restructure GeoCities were soon forgotten. Killeen, still back in Oregon with the old Starseed engineering team, now found himself an employee of Yahoo, and: "Yahoo had other priorities."

With the plans to use WebRing's technology to improve GeoCities abandoned, Yahoo set about integrating the community into the Yahoo brand, just as it did with GeoCities.

"The management of Yahoo simply did not know, or did not care, about what they inherited," said Lowe. "I got the distinct impression of some guys in a boardroom saying, 'What the heck do we do with this thing?' and coming up with some birdbrained ideas, which then got implemented."

When the new Yahoo WebRing went live in late September of 2000, the ringmasters' furious protests began. The ringmasters used Yahoo's own WebRing system to link up the protest sites and spread the word. It was one of those delicious Internet ironies: a community of anti-Yahoo sentiment, attacking what Yahoo had done to WebRing, hosted by Yahoo's own WebRing.

The essential gripe of the ringmasters was that they had not been consulted about the changes to the system, changes that they felt had marginalized them. "The ringmaster had effectively been turned into just another member," said Huggins. To Yahoo's credit, the new version of WebRing made it easier for webmasters who were "HTML clueless" to easily build rings. But simplicity came at a high cost.

Following the Yahoo directory style, Yahoo WebRing would now try to drive users through central pages. The new navigation bar on every page of each ring made the Yahoo WebRing home page the "hub" rather than the ringmaster's own home page. Yahoo tried to bring centralization to a system that was essentially distributed.

Since Yahoo couldn't require member sites to carry ads, the company did the next best thing, and strove to force users through Yahoo-owned directory pages. "They couldn't put ads all over these sites. Yahoo had to have a way to get you to visit their pages more often. They completely deemphasized the role of the ringmaster, when they changed it from home to hub," says Huggins.

It was a no-win situation for Yahoo. WebRing had been purchased by GeoCities in order to acquire a technology that Yahoo ended up having no use for after it bought GeoCities. Now Yahoo was in the position of trying to pry money out of an amorphous community that just wanted to be left alone.

The beefs that ringmasters had with the new system were only amplified by Yahoo's inability to deal effectively with the community. When ringmasters wrote to complain, they received form letters in response.

"I think that most users will agree that Yahoo's customer service has always been the most frustrating part," says Andrea Stalnecker. "It was all but impossible to get personal assistance to problems or to share feedback about the system. Unfortunately, they just didn't have the staffing to accommodate the number of support messages they received, so they hoped the form letters would suffice. Instead, it looked as if Yahoo was too busy to care about the users, which I always hoped wasn't actually the case."

Some ringmasters got so fed up that they defected to WebRing alternatives. The other rings systems included CrickRock, RingSurf and the open-source version Ringlink. Ringmasters relished the alternatives, but the fragmentation could only frustrate surfers -- where once there might be one main Scottish Terrier ring, now there could be four.

In April 2001, Yahoo laid off most of WebRing's staff, committing the already marginalized system to total irrelevance inside the company. And then, in mid-October 2001, Yahoo officially gave up on the experiment, announcing that Killeen, who along with the rest of the Yahoo WebRing staff in Oregon had been laid off by Yahoo earlier in the year, would buy the system. Nicki Dugan, Yahoo spokesperson, told that it "was in the best interest to sell to Tim because it's difficult for us to sell advertising inventory on pages that are hosted on other companies' Web sites or other companies' networks."

For his part, Killeen is humble about his motives in attempting to salvage the system: "I liked it still so I offered to take it off their hands essentially for them."

Yahoo offered little more. Jackson Holtz, a Yahoo spokesperson, says only: "Tim Killeen, one of the very early WebRing engineers approached Yahoo regarding purchasing WebRing. Yahoo decided it would be in the company's best fiscal interest to complete the sale. We wish Tim the best of luck with his endeavors."

The company had never given the nifty Web system much of a public showcase: "Through the entire history of this, WebRing has not appeared in any annual report or SEC filing or press release of Yahoo in any way. It's just a tiny blip in their empire," says Huggins.

Now, for an undisclosed sum, Yahoo had jettisoned an unprofitable project along with the headache of crabbing ringmasters who came with it, while WebRing had regained its independence. The ringmasters are in the process of moving their rings once again, this time to the new WebRing system.

All rings that are not transferred will be deleted, so some of the more devoted ringmasters like Stalnecker have taken to "adopting" orphaned rings -- rings whose masters have lost interest -- so that they'll make it to the other side.

Whether WebRing can make it as an independent business consisting of one engineer with a few other people working "just in their spare time" is anybody's guess.

Huggins believes that WebRing, which went from being worth the better part of a $30 million deal to becoming a Web castoff, is just a victim of weird market forces. "It was not invented to make money," he says. "Like many other things on the Net, it was invented to support community." Huggins' rings now live on alternative systems.

Killeen just hopes that with its newfound independence WebRing can return to its roots: "It's kind of like the Internet bubble. There were all these grand expectations that everyone had, and when those didn't immediately burst forth, WebRing ended up being what it started out to be, which is lots and lots of individual users and sites."

Individual users and sites -- is the Internet's future really its past? In the grander scheme of Yahoo's business strategy, WebRing was a minor stumble -- just one of many irrelevant missteps in the rush to become all things to all Net users. But symbolically, the story of WebRing might be more telling than Yahoo executives would like to contemplate. In the long run, it will be easy to keep a WebRing, or something like a WebRing, going, as long as obsessed people are willing to devote some time to the Net. The rings will never really die.

But will there always be an independent Yahoo -- a multibillion-dollar corporation employing thousands of people, devoted to the proposition that online popularity can be transmuted into enduring profits? That's a question that only the users, once known as community members but now called "customers," can answer.

This story has been corrected.

By Katharine Mieszkowski

Katharine Mieszkowski is a senior writer for Salon.

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