The Yellow Kid was a creation of R.F. Outcault. The character debuted in a single panel color cartoon called Hogan's Alley, which first appeared in 1895. While entitled Hogan's Alley, the star in the strip was the Yellow Kid.
The strip portrayed the real struggles in city slums at the turn of the century. Outcault used the strip to introduce the struggle of many city dwellers to the masses.
In reference to the character, he said, "The Yellow Kid was not an individual but a type. When I used to go about the slums on newspaper assignments I would encounter him often, wandering out of doorways or sitting down on dirty doorsteps. I always loved the Kid. He had a sweet character and a sunny disposition, and was generous to a fault."
Outcault started lampooning situations dealing with New York tenements in June of 1894 for Truth magazine. In February of 1895, one of Outcault's cartoons was reprinted in Joseph Pulitzer's newspaper, The New York World, paving the way for the series from which The Yellow Kid would eventually emerge - Hogan's Alley. The Yellow Kid evolved out of this strip, identifiable by his bald head, huge ears, and vivid yellow nightshirt, which went on to display his dialog in a manner similar to that of a sandwich board. The following year, newspaper magnate William Randolph Hearst, Pulitzer's main rival, raided Pulitzer's cartooning staff, including Outcault, who continued Hogan's Alley for Hearst, which prompted Pulitzer to sue.
The court ruled that Outcault could use The Yellow Kid as he pleased, but the name Hogan's Alley was to stay with Pulitzer's paper. An artist named George Luks continued the feature Pulitzer, while Outcault rechristened the strip McFadden's Row of Flats and continued working for Hearst.
Both sides eventually gave in and simply called both features The Yellow Kid. As with comic characters of today, The Yellow Kid was heavily merchandised with products ranging from gum to buttons, cigarettes to cookies, pin cushions, dolls, stationery, Yellow Kid figural soaps, postcards and rubber stamp sets were among the many items bearing the grinning visage of The Yellow Kid.