Why did Yahoo! sunsetting Yahoo! Directory become a big deal in marketing circles?

Yahoo! Directory is a bit like the shark. It has been around pretty much as long as the modern commercial web. Yahoo! was among the first online media companies. Whilst peers like Lycos and Excite disappeared Yahoo! managed to survive. The name Yahoo! is actually an acronym: Yet Another Hierarchical Officious Oracle. Yahoo! started as a list of interesting links to sites, these then needed to be categorised as it grew and the first iteration of Yahoo! was as a directory.
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Yahoo! then expanded its service offering with a portal, email, shopping, auctions, celebrity chats and specialist kids content. Directories were the forerunner of search as they provided editor-driven categories. In 1998, Netscape went into competition with Yahoo! with its own directory, which now exists as DMOZ – an open directory hosted by Aol and run by volunteer editors. DMOZ has catalogued 4,167,366 sites in over a million categories over 16 years. It became obvious that human editors couldn’t scale.

Even when consumers went away to the search box of Alta Vista HotBot and Google, the Yahoo! Directory served a secondary purpose. As a repository of ‘screened and categorised’ websites algorithmic search engines took entry in a number of directories into account as part of their ranking for sites. Directories became important to search agencies.

When I worked at Yahoo! during the start of the web 2.0 period, tagging and its role in social search was considered to be reflective of Yahoo!’s past in directories and offered a future that was not solely dependent on the dictatorship of an algorithm. Social search promised a blended approach.

Over the past decade Yahoo! Search and Google both gradually depreciated the importance of a directory entry for search ranking as other signalling factors took over including social mentions.

A lot of digital marketers have lived with Yahoo! Directory for a long time. The shutdown of Yahoo!’s original service comes at a turning point for the company. It looks as if Yahoo! is about to be torn apart as Wall Street tries to get it to liquidate its holdings in Yahoo! Japan and Alibaba; return the cash to them and pick over the rest of the assets like a dead carcass on the Serengeti.

More information
Progress Report: Continued Product Focus | Yahoo! Corporate Tumblr account
The Yahoo Directory — Once The Internet’s Most Important Search Engine — Is To Close | SearchEngineLand
Yahoo killing off Yahoo after 20 years of hierarchical organisation | Ars Technica
Yahoo Directory, once the center of a web empire, will shut down at year’s end | The Verge