Hollywoodland was actually a subdivision of tract houses and the sign was a billboard for the development. It was erected in 1923 for $21,000 and originally meant to last just 18 months. It lasted much longer than that, but gradually fell into disrepair. In 1949, the letter "H" even fell over.
There are differing opinions on why the H fell. Some say bad weather knocked it over and others claim a truck drove into it. But either way, it needed fixing. Since it started as an ad, the original idea in 1949 was just to tear it down altogether. But by then it had become such a fixture in town that the Hollywood Chamber of Commerce decided to take over maintenance and ownership, according to Salon. They repaired the sign, but cut the "land," changing it to just "Hollywood" to stop it from referencing one specific housing development.