Yahoo Inc. had its genesis in a 1994 project of two Stanford University Ph.D. candidates, David Filo and Jerry Yang, to create a directory of favorite Internet sites.

The company is still up to those original tricks, defining itself now as a content aggregator, said Mike Riley, senior producer for Yahoo Finance.

Mr. Riley's title indicates, though, that Yahoo has expanded far and wide in five years. And that has a lot of bankers on their guard.

Yahoo is viewed as perhaps the most successful of all World Wide Web enterprises, with almost 1,000 employees and a portal strategy that attracts a worldwide audience of about 80 million a month. Yahoo earned $25.6 million in 1998 on revenue of $203 million.

In contrast to America Online Inc., which describes itself as an entryway to the Internet, Yahoo focused on delivering content and providing access so compelling that it would establish a massive and loyal audience.

Toward this end Yahoo has branded a number of services, including Yahoo Shopping, Yahoo Auctions, and Yahoo Travel. In all it offers more than 50 Web properties, including e-mail, chat rooms, and classified and real estate listings in addition to the old standby, Web searches.

Stock quotes and financial news were introduced in 1996 as a precursor to Yahoo Finance, which Mr. Riley launched in March 1997. He joined Yahoo in 1996 after earning a bachelor's degree in philosophy from the University of California at Los Angeles and then spending four years trading options in San Francisco.

Yahoo decided on the content for Yahoo Finance by analyzing user requests and tracking their searches, Mr. Riley said.

The channel now includes company and mutual fund profiles, investment research, and quotes on mortgages, other loans, and insurance policies.

Toward its goal of becoming the most popular financial site, Yahoo Finance wants to build partnerships with various sources of financial information. The Internet is infinite, Mr. Riley said. There is room for everyone.

Initially, Yahoo struck very basic deals with banks -- mainly to allow advertisements that pop up during navigation. It has such arrangements with First USA for a Yahoo credit card and with the Wilmington, Del., credit card company's parent, Bank One Corp.

Recently Yahoo has gotten into deeper relationships. Bank of America said last month that it would let its California customers gain access to their account information through Yahoo Finance or personalized My Yahoo sites. Links are available from Yahoo to the Bank of America Web site for bill payments and funds transfers.

Telebank of Arlington, Va., announced last month that it would let customers view their account balances and last three transactions through Yahoo Finance and My Yahoo. The deal is part of an integrated marketing program begun last fall, which started with Telebank banner ads on the Yahoo site. Part two of that strategy made Telebank the first direct bank to reimburse customers for up to four automated teller machine transactions a month, if the account was opened through Yahoo.

Yahoo's agreements to offer bank account access are not exclusive, and there will be more, said a Yahoo spokeswoman.

Mitchell H. Caplan, president and chief executive officer of Telebank, said the arrangement with Yahoo is incredibly strategic for both partners. Telebank achieves its goal of acquiring more customers and deposits, he said, and Yahoo gets applications that keep customers coming back.

Early results have been very strong, he said, and have gotten stronger as the three stages of the agreement have fallen into place.

He pooh-poohed the notion that Telebank customers might consider the portal their bank. Customers think of Telebank as their bank, and they think of Yahoo as the channel, he said.

Mr. Caplan acknowledged that Yahoo absolutely could get into banking one day. But there are plenty of things about Yahoo's partner relationships to discourage it. Potential revenue losses from alienating partners would dramatically outweigh any gains from becoming a bank, he said.

Telebank's relationship with Yahoo does not prevent the bank from forming its own portal. That was the whole reason for doing the merger, scheduled for completion in the fall, with on-line brokerage E-Trade Group, Mr. Caplan said.

Though much has been made of Yahoo Finance's possible entry into bill payment and presentment -- a long-rumored affiliation with Checkfree Holdings Corp. was confirmed on Wednesday -- its highest priority is on-line trading and investing, Mr. Riley said. It offers easy links to Ameritrade, Charles Schwab & Co., and E-Trade.

Mr. Riley said Yahoo is looking into bill payment and presentment services. If we do it, we want to do it right and offer something compelling, he said.

Mr. Riley said Yahoo has decided explicitly not to create content and not to hold customer assets. We are focused on being an information provider and a communication medium, he said. Yahoo wants the broadest appeal.

A decision to take deposits would eliminate the user's choice, Mr. Riley said. No one bank can meet everyone's needs.

Mr. Riley is equally skeptical of banks' ability to become portals in their own right.

It is hard for a bank to be a great content provider and offer great financial services, he said. Two different skill sets are necessary. Banks should stick to banking.

Yahoo, like other aggressive Internet leaders, has imperialistic, go-anywhere visions.

It plans to make its services available on telephones, televisions, pagers, hand-held organizers, and other electronic devices by early next year, Mr. Riley said. Yahoo paid $80 million in stock to acquire Online Anywhere in July, and it plans to use the company's technology and services to adapt Web pages for these various devices.

Soon Yahoo will integrate the broadband distribution capabilities it inherited from, the early leader in Internet media-streaming, which it acquired in April for $4.3 billion.

By yearend Yahoo expects to have introduced a digital wallet to make on-line purchasing easier for people who register their credit card numbers and shipping addresses. Yahoo plans to keep tabs on purchases and payments, and it would deliver monthly bills on-line.

Yahoo has 19 international Web sites staffed by local employees, as well as customized sites for 12 U.S. cities. The international sites follow the U.S. philosophy of aggregating content but emphasizing what is important locally. For example, in Asian countries Yahoo Finance offers currency exchange rates in real time because Asians tend to monitor currency fluctuations more than Americans do.

Yahoo's international strategy puts it in position for accelerated growth, according to a May 1999 U.S. Bancorp Piper Jaffray equity research report. It projected Yahoo's revenue would grow to $973 million by 2003.

Safa Rashtchy, senior analyst at U.S. Bancorp Piper Jaffray, said Yahoo will probably continue to generate 70% of its revenue from advertising and marketing deals. Yahoo has established itself as the most recognized name on the Web, he said.

More than 47 million registered users have created personalized My Yahoo home pages and, in the process, provided valuable information about their interests. People visit the personalized sites more often and spend more time there, giving Yahoo the opportunity to boost its advertising rates.

Bankers should look to be in there, Mr. Rashtchy said, by working with Yahoo to acquire new customers and build relationships with existing customers. Yahoo can also provide links to desirable customers for testing new products and services, he said.

Even with a market valuation of $24.8 billion, Yahoo has remained true to its humble beginnings. Mr. Yang, 30, chief yahoo and a director, and Mr. Filo, 33, chief yahoo, are said to occasionally walk the offices barefoot.

Jerry and David are very down-to-earth, a spokeswoman said. They know this could all end tomorrow.

In a recent exchange of e-mails, Mr. Yang said he does not consider himself successful. He said he still sees so much potential in the Internet and in Yahoo.

Mr. Riley said such modesty infuses the culture and is a key to Yahoo's success.

We keep the navigation easy, though the site is robust enough that even a power user finds it useful, he said. Users find the site fun, cool, and easy to use, and so they keep coming back.

It's a big world out there, Mr. Yang said. It's important to be modest -- and paranoid.

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