If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.
It’s hard for anyone much younger than me to understand the fear Microsoft still inspired in 1995. Imagine a company with several times the power Google has now, but way meaner. It was perfectly reasonable to be afraid of them. Yahoo watched them crush the first hot Internet company, Netscape. It was reasonable to worry that if they tried to be the next Netscape, they’d suffer the same fate. How were they to know that Netscape would turn out to be Microsoft’s last victim?
By the way, it is good to see that the frequency of Graham’s publication of his essays is increasing. If I ever teach a course on writing (which I really want to do sometime — at least as a short term one), these pieces would surely be part of the syllabus.