The word was invented by Jonathan Swift and used in his book Gulliver's Travels. It represents a person who is repulsive in appearance and action and is barely human. Yahoo! founders Jerry Yang and David Filo selected the name because they considered themselves yahoos.
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." (Source:
http://docs.yahoo.com/info/misc/history.html) - Thanks, Barry Ritholtz.