Unabridged Vitae of (Pete) Prestipino

Ali Partovi is an angel investor, startup advisor, and serial entrepreneur.

Earlier this month, Paul Graham wrote a terrific article, “What Happened to Yahoo,” blaming Yahoo’s demise on two factors. First, “easy money” from banner ads led Yahoo to ignore search in the late ‘90s. Second, ambivalence about being a technology company meant Yahoo hired sub-par engineers and didn’t empower them to innovate. While I agree with Graham’s points, there’s a broader story to be told.

The story begins in 1996 with an 18-year-old college dropout named Scott Banister, who came up with a simple but elegant concept that turned out to be one of the best business ideas in history.

This is the true story of the search business model -- a concept that John Battelle and other search historians have erroneously attributed to Bill Gross for Goto.com. Although Gross deserves the lion’s share of credit for recognizing a good idea and more importantly for implementing it, the credit for developing the idea itself belongs elsewhere. But first, let’s recall the world of search in the late ‘90s.