$4 billion goes up in smoke as Yahoo closes GeoCities

 

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By Reuters

Posted on 24 Apr 2009 at 08:14

Yahoo is shutting down GeoCities, a free service that hosts personal home pages for consumers, which it acquired for more than $4 billion 10 years ago during the dotcom boom.

A posting on a Yahoo Help page for GeoCities says the service is no longer accepting new customers and that it will be closing later this year, with more details about how individuals can save their data coming this summer.

The move comes a few days after Yahoo said it would lay off nearly 700 workers, or 5% of its workforce.

Since Chief Executive Carol Bartz took the reins in January, Yahoo has pruned various products and properties to cut costs and focus on fundamentals, as it seeks to revive growth in a tough economy and fierce competition from Google.

Last week, Yahoo said it was shutting down Jumpcut, an online video editing service.

Yahoo acquired GeoCities in 1999 in a stock deal valued at roughly $4.6 billion. GeoCities was among the first companies to build online communities, with more than 3.5 million websites hosted on its service in the late 1990s.

But GeoCities fell out of favour in recent years, as a generation of social-network sites such as Facebook and Myspace have emerged.

"We have decided to discontinue the process of allowing new customers to sign up for GeoCities accounts as we focus on helping our customers explore and build new relationships online in other ways," Yahoo claims in a statement.

"As part of Yahoo's ongoing effort to build products and services that deliver the best possible experiences for consumers and results for advertisers, we are increasing investment in some areas while scaling back in others."