According to The History of Yahoo! - How It All Started... webpage (2005):
As a wee lad, I recall utilizing Yahoo! in 1994 because it was extremely organized compared to most other search engines at the time.Yahoo! began as a student hobby and evolved into a global brand that has changed the way people communicate with each other, find and access information and purchase things. The two founders of Yahoo!, David Filo and Jerry Yang, Ph.D. candidates in Electrical Engineering at Stanford University, started their guide in a campus trailer in February 1994 as a way to keep track of their personal interests on the Internet. Before long they were spending more time on their home-brewed lists of favorite links than on their doctoral dissertations. Eventually, Jerry and David's lists became too long and unwieldy, and they broke them out into categories. When the categories became too full, they developed subcategories ... and the core concept behind Yahoo! was born.
The Web site started out as "Jerry and David's Guide to the World Wide Web" but eventually received a new moniker with the help of a dictionary. The name Yahoo! is an acronym for "Yet Another Hierarchical Officious Oracle," but Filo and Yang insist they selected the name because they liked the general definition of a yahoo: "rude, unsophisticated, uncouth." Yahoo! itself first resided on Yang's student workstation, "Akebono," while the software was lodged on Filo's computer, "Konishiki" - both named after legendary sumo wrestlers ... In March 1995, the pair incorporated the business and met with dozens of Silicon Valley venture capitalists ("The History of Yahoo!," para. 1 & 2).
While Yahoo! has declined in popularity over the years as Google currently dominates the market share, it remains a very important search engine. For individuals wishing to learn more about search engine optimization, the history of Yahoo! is a good reference point.
Yahoo! Media Relations. (2005) The history of yahoo! - How it all started... Retrieved from http://docs.yahoo.com/info/misc/history.html