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Copy of Yahoo! Strategic Management

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robert lambey

on 5 April 2015

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Transcript of Copy of Yahoo! Strategic Management

Yahoo! Case
By: Ben Fetrow, Shanna Nally, Rosalind Haynes, Nick Shearer & Ryan Goodfriend
Yahoo! was created by founders David Filo & Jerry Yang while attending Stanford’s PhD program.
Jerry and David's Guide to the World Wide Web was first designed as a time saver used to keep track of their own interests by creating lists of sites they frequently browsed. Once the lists became too long they were divided into categories & later subcategories.
What began as a student hobby has now evolved into an internationally renowned brand that has changed the way people access and utilize the Internet. The title Yahoo! was chosen because Yang and Filo liked the dictionary definition of the word, a rude, unsophisticated person.
Yahoo! also stands for Yet Another Hierarchical Officious Oracle. Hierarchical represents the categories and subcategories, Officious to describe the office employees that would utilize the portal, & Oracle meaning source of wisdom.
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Yahoo!'s History
Yahoo!'s headquarters are located in Santa Clara, CA & also maintains a vast global network comprised of over 200 World properties throughout Europe, Asia, Latin America, Canada, & the United States.
Yahoo! was first made available to the public in 1994 and hit its 1 millionth visitor in the fall of that year. At the present time it is reported that Yahoo! is accessed by approximately 700 million individuals & businesses each month although Yahoo! claims that over a half a billion users access Yahoo! in 30 different languages.
Yahoo! is a web portal that offers a variety of services and products including their search engine, website directories, & home page offering media content such as entertainment, sports, & news updates.

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Yahoo!
Yahoo! has also created a mail service in order to compete with Google's Gmail. They also offer communication services such as Yahoo! Messenger. Users also have access to games, movies, & music through the web portal.
Yahoo! first allowed companies to advertise their products on the site for the fee. Later on Filo & Yang paid for the sophisticated IT infrastructure to support their portal’s growth.
Yahoo! was incorporated in California on March 5, 1995, & commenced selling advertisements on its Web pages & recognized its initial revenues.
As the first navigational tool for browsing the World Wide Web, Yahoo! is an industry leader when it comes to visitors. Yahoo! was the first to generate income from businesses all over the globe through advertising.
Yahoo!
Services

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Yahoo! tailors some of its products directly to businesses by providing video & audio streaming, web hosting, domain management, & a variety of other web based services geared towards business & commerce. Yahoo! also provides marketing services to advertisers for hundreds of websites.
Yahoo! advertising function was built up rapidly during the dot com boom in the 90's. Hundreds of companies were signed up initially to advertise their products on its portal. Hundreds of IT software engineers were hired. By 1996, Yahoo listed over 200,000 websites in over 20,000 different categories.
Yahoo! had entered into foreign markets & was accessible through a dozen different languages. Becoming available to a variety of countries Yahoo! capitalized on international markets through global communication, a wide variety of media, & global commerce. Yahoo! developed a global network that was user friendly allowing access to virtually anything.
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Yahoo! Diversity
The company experienced tremendous growth by providing commerce, communications, & media services.
First went public on NASDAQ in April of 1996. In December 1999, Yahoo! stock was added to S&P 500 with a trading high of $118.75 per share.
Yahoo! has acquired several companies and has been able to successfully diversify properties, services & operations through acquisitions & mergers.
Yahoo! acquired Broadcast.com, Inc., an Internet company specializing streaming broadcasts over the web & has also entered the free internet service provider arena by participating in Kmart's BlueLight.com. This allows free internet access to personalized content & services from Yahoo!, allowing Yahoo to offer their brand & access to their services to millions of Kmart customers nationwide.
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Yahoo!
By venturing into more divergent online arenas, Yahoo! has insured itself of being a viable competitor to the vast array of internet companies today, effectively bundling a wide variety of internet services into one large company.
Currently, Yahoo! is among the giants of internet portals taking claim as the second leading global internet brand with 500 million users worldwide.
Yahoo!’s vision is to become the largest-scale internet device for users & enterprises, supplying the services required for their success.
With Yahoo!'s customizable services accessible in the U.S. & in 21 nations in 12 dialects, Yahoo! users worldwide can access bill collections & payments, keep up to date track of stock portfolios, buy effectively any merchandise imaginable, & find a variety of other services including email & chat rooms, all within the virtual realm of the web portal that is Yahoo.com. Yahoo! continues to add services & features, all of which should result in keeping existing users coming back for repeat visits plus extending the time they spend online in Yahoo's! web portal.
Yahoo!
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According to Yahoo!’s website, their mission statement is that they are “committed to empowering its users & employees through programs, products, & services that inspire people to make a positive impact on their communities” & “connects people with causes through our products & services, as well as through partnerships with nonprofits such as Global Green, Network for Good, & Donors Choose”.
The foundation has given millions of dollars in grants to organizations around the world.
Yahoo!
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Excellence: They don’t take winning for granted. They are committed to winning with integrity, & excellence. They do not believe in taking shortcuts when it comes to quality of services or products.
Innovation: They thrive for advancements in innovation & originality. They always look for new ideas to improve the world & web. They are not afraid to take risks.
Customer Fixation: Respect for their customers is a priority. They listen to their customers & accommodate them accordingly.
Teamwork: Teamwork is valued and new ways of thinking & ideas are encouraged. It does not matter the rank or level of the employee, innovative ideas are welcomed throughout the entire spectrum of the organization.
Community: They thrive to make a positive impact on society, & are committed to serve in both the virtual community realm & communities in which we live.
Fun: They believe in humor & celebrating success.
Yahoo! Values
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According to the Yahoo! Inc. website, they have become one of the leading search engines on the World Wide Web.
Due to ever changing & sudden growth in technology engineering, many new entrants with internet sites & companies like Face Book.com, AOL, MSN, & Google have been introduced. Google which was relatively unknown search engine has outperformed major web portals like Yahoo, Microsoft & AOL.
Yahoo did not realize the importance of obtaining a search engine which could decrease the time spent searching for information with the least number of clicks. Search engines that maximize results & minimize search time would be on the cutting edge & bound to defeat the lagging competitors.
Yahoo!
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Operating in such a rapidly changing world of technology while taking on increasing competition has proven to keep Yahoo! in 2nd place. Yahoo!'s most significant competitor Google, remains on the fast track of search engine domination by providing the fastest & the most concise search engine today.
Slow economic growth remains to hinder advancements among competitors, showing signs of declining online spending growth trends.
Future innovations & larger shifts in technology prove to create a highly competitive internet industry in which long-term strategies & advances in software can make or break competitive forces.
Issues
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Income Statement
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Time
Series
Analysis
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Growth Ratios
Current Year/ Previous Year
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liquidity ratios
Measures a company's ability to pay short-term obligations.
Measures a company's ability to meet its short-term obligations with its most liquid assets
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Ratios used to assess a business's ability to generate earnings as compared to its expenses & other relevant costs incurred during a specific period of time

= Gross Profit / Sales
= Net income / Sales
= Net income / Equity
Profit Margins
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Measure a firm's ability to convert different accounts within their balance sheets into cash or sales.

= Sales / Inventory
= Sales / Assets
= Cash / (Sales/365)
Asset Management
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An idea of the company's methods of financing or a measure its ability to meet financial obligations.
= Assets / Equity
= Debt / Equity
Leverage Ratios
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Comparsion to Industry
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Yahoo!
External & Internal Analysis
POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGY
External Analysis
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Legal regulations of Internet laws differ globally
SOPA (Stop Online Piracy Act)
Internet content restrictions
Domain control ex. .net, .com, .xxx
Political
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Economic recession, which could result in further deterioration in internally generated cash flows & restrictions on the availability of capital
Decrease in consumer spending
Increased interests rates will affect operating expenses for companies
The age group of 18-29 has highest internet usage rate at 83% (World Bank Group)
High profit potential in the internet industry
Economic
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Internet has increasing role in daily lives of people with internet access
Growth of broadband population results in more hours spent online
Stable industry with increasing internet use
Shopping available anywhere on internet
Internet is educational tool as well as entertainment
Social
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New technology has potential to create new markets
Mobile trend in electronics
Increased emphasis on energy efficiency & sustainability
Number of WiFi hot spots increasing around globe
Websites are increasing in quality & ease of use
Technology
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Google & MSN offer free premium email accounts
Google search results generate twice as much revenue
Google owns YouTube which is the #1 online video site
News is available from CNN or BBC
Competition
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Yahoo! vs Google
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Industry:
Internet Information Provider
Market Share
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Yahoo! Mail
Yahoo! Messenger
Yahoo! Groups
Yahoo! Answers
Flickr
Yahoo! Maps
Yahoo! Yellow Pages
Yahoo! Features
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Gmail (free email service)
Google Maps & Earth
Google Apps
Google Video & YouTube
Google Finance
Google Checkout
iGoogle
Google Chrome
Google Features
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Internal Analysis
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Very profitable internet advertising
Over 350 million users
Well known brand
Adopted by many nations as internet expands
Content is moderated in search engines unlike mainstream search engines
Partnership with MLB, Visa, & NFL
Top 5 “Most Popular Websites”
Partnership with Getprice to create online comparisons for businesses
Flickr is number 2 in photography category with over 1 million users
Personalization of online services
Utilization of indigenous personnel
Customized geographic marketing strategy
Strengths
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Weaknesses
Same income stream as MSN & Google
Lack of innovative products (same packages as competitors)
Halt of international growth
Image search has declined 3% per year
Video site is ranked 5th
Customer loyalty is very low
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International market offers tremendous growth potential
Yahoo! Directory has potential for new business & income streams
Services for mobile technology
Talented employee base
Internet video advertising is expected to increase by 82%
Utilization of Flickr
Unforeseen advertising media with upcoming technology
Loss of market share & income stream with new advertising
Biggest threat is competition from Google & AOL
International competitors in China & India
Consumer attitudes towards online advertising may become negative
Social networking sites are stealing advertising market share
Intellectual property infringement
Opportunities
Threats
Internal Analysis
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Ben Fetrow
Yahoo! Alternatives
Shanna Nally
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Alternatives
Sell Yahoo! to Microsoft
Partnership with Microsoft
Focus on international market expansion
Improve current services/offerings
Offer additional services
Expansion into new IT sector/market
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Sell Yahoo! to Microsoft
Pros
Cons
Partnership with Microsoft
Pros
Cons
International Market
Pros
Cons
Improve Current Services
Pros
Cons
Offer New Services
Pros
Cons
Expand into New Sector
Pros
Cons
Implementation
Ryan Goodfriend
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No loss of market share
Allows for concentration on current customers
Doesn't reinvent the wheel
Control
Allows for expansion into premium or corporate services
Allows for creative improvement
Lower risk
Implementation
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Enhance and improve current Yahoo!
services to stimulate use
Yahoo! is #4 most visited website behind Google, YouTube & Facebook
22% of users
Reputation = 2,015,936 (Not Good)
Number 1 in Taiwan, Hong Kong and Iran
Most people who visit yahoo are over the age of 65
More females than males
Residential users almost exclusively
Average speed: 2.194 Seconds
74% of sites are faster than Yahoo!

Global Internet
Environment of Yahoo!
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United States 31.5%
India 8.5%
Taiwan 3.8%
United Kingdom 3.2%
Iran 3.2%
China 3.1%
Indonesia 2.7%
Brazil 2.4%
Italy 2.3%
Mexico 2.3%
Country Percent of Visitors:
Who Goes to Yahoo!
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mail.yahoo.com 48.19%
login.yahoo.com 27.47%
yahoo.com 24.22%
search.yahoo.com 20.39%
news.yahoo.com 15.29%
answers.yahoo.com 15.11%
sports.yahoo.com 6.50%
finance.yahoo.com 6.46%
omg.yahoo.com 5.30%
my.yahoo.com 5.18%
What are the Reason
Why People Go to Yahoo!?
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movie.yahoo.com 0.12%
marketingsolutions.yahoo.com 0.10%
webhosting.yahoo.com 0.10%
auctions.yahoo.com 0.09%
360plus.yahoo.com 0.09%
pipes.yahoo.com 0.08%
m.yahoo.com 0.07%
kids.yahoo.com 0.06%
chat.yahoo.com 0.06%
games.yahoo.net 0.03%
What are People NOT Going to Yahoo! for?
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Based on current use patterns of Yahoo!
Premium or corporate opportunities
Cost of endeavor
Demographic
Pick Service &
Service Strategy
R&D
Marketing (9 to 12%) of Annual Budget
IT Professionals 40,000 – 120,000 based
on expertise & specialties
Consulting – 80 to 200 dollars per man hour
Servers
-Hardware (5 to 10 thousand per sever)
-OS 400 to 4000 depending on size
-Technician 80% of Costs
-Farming/Rental Costs
Costs
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Future Projections
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Works Cited
http://marketingteacher.com/swot/yahoo-swot.html
http://www.freeswotanalysis.com/electronic-commerce/133-yahoo-swot-analysis.html
http://m1batch10-12.blogspot.com/2010/10/pest-analysis-of-yahoo-might-be-help-in.html
http://www.scribd.com/doc/65298/Yahoo-Case-Analysis
World Bank Group, Millennium development goals. Retrieved March 31, 2007, from48b. Internet users per 100 population Web site: http://ddp-ext.worldbank.org/ext/GMIS/gdmis.do?siteId=2&contentId=Content_t48b&menuId=LNAV01HOME1
http://www.alexa.com/siteinfo/yahoo.com
www.morningstar.com
finance.yahoo.com
http://www.corporategovernance-asia.com/2011/01/16/pro-and-cons-of-selling-a-business/
http://articles.businessinsider.com/2011-04-05/wall_street/30071072_1_sales-process-strategic-decisions-banker
http://www.businessknowhow.com/startup/partnership.htm
http://chiefmarketer.com/web-marketing/expert-advice-pros-and-cons-going-global-online
Company Overview
Rosalind Haynes
Fiscal Health
Nick Shearer
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Larger Scale
Liquidity
Investment
Long & complex process
Pricing agreement hard to meet
Potential financial loss
Possibility of laying off or relocating
Yahoo! employees
Loss of independence
Better to compete with Google
Brand recognition
Share responsibilites
Exposure to Microsoft technology
Loss of control of decision making
Differences of opinions/strategies
Change of long term direction
Cost of 3rd parties
Grow reputation
Brand recognition
Larger potential customer base
Increased revenue
Job opportunities
Taxes
Barter
Government regulations
Culture & practice
Increased brand name recognition
Opportunities to grow
Customer satisfaction
Generate advertising revenues
Motivate workers
Research & Development costs
Training/support issues for employees
Growing too fast
Increased growth
Competition
Potential for new technology
Job opportunities
Competition with already established, experienced companies
Technical support costs/experience
Research & development costs
Likelihood of charging for services
Research & Development costs
Marketing costs
Extreme competition
High risk
Job opportunities
Brand recognition
Diversity in products
High potential profits
Market share increase between 5-10%
in the next 3-5 years
Increase revenue between $360-720 million
Grow target market
Increase reputation
Faster load times
Any Questions?
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Thank you
for your time
Yahoo!
Google
Yahoo!
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Google
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Assets
Liabilities and Stockholders equity
Full transcript