Executive Summary Company Overview Issues & Challenges Yahoo Values Yahoo Properties Yahoo Operation Source of Competitive

Advantages Analysis of Yahoo!s Strategy Recommendation

 Yahoo has grown up as a portal company and since its inception, they forced users to stay on their site through their offerings and they could find ways to profit from the page views. Google, Yahoos chief competitor, has mastered the art of monetization, through contextual advertising. Googles offering, Adsense and Adwords, produces 99% of the companys profits. This advertising network is built into both their search and branded sites. Later, Yahoo has adopted this model of contextual advertising that has been so profitable for Google, but have yet to refine it enough to make a serious impact on the market. The primary issue in the Yahoo model has been the lack of precision, because their search algorithm needs to be updated.

 On the positive side, Yahoo has a brilliant banner serving system. Since Yahoo still sees itself as a portal, it still leverages Yahoo Money, Cars, Email, etc. Each of those sites has products or services that provide value to the user. Yahoo needs to focus on core content by improving exactly what it is that makes them money. They should focus on improving their ad networks efficiency and allowing all publishers admittance. They should leverage their banner serving software with the contextual market and provide growth that way. Google, the market leader, is simple and built around search. Yahoo needs to adopt same sort of philosophy to remain competitive in their market.

 Founded in 1994 by Stanford Ph.D. students David Filo and Jerry Yang. Yahoo! began as a hobby and has evolved into a leading global brand that has changed the way people communicate with each other, conduct transactions and access, share, and create information. Yahoo! Inc. has become the world's largest global online network of integrated services with more than 500 million users worldwide. The company is headquartered in Sunnyvale, California, with a presence in more than 20 markets and regions around the globe.

Vision:
The one place in the world that anyone would need to go to find anything, communicate with anyone, or buy anything.

Revenue Model:
About 88% of total revenues come from marketing services . The largest segment of it comes from search advertising, where advertisers bid for search terms to display their ads on the search results, on average Yahoo! makes 2.5 cents to 3 cents from each search.

 Not able to differentiate their products & services from the competitors offerings. E.g. Web publishers, that own their own websites are not able to capitalize on Yahoo!s revenue model. Publishers do not have a chance to leverage Yahoos size and revenue potential the way that Google has empowered their users, through the contextual ad system. Yahoo is the most trafficked website on the planet. More page views are served from Yahoo servers than any other company in the world. Why is it that they are trailing Google in revenue then?

Excellence

Fun

Innovation

Community

Customer Fixation

Team Work

1. Navigational Properties help consumers find relevant information more easily. 2. Communities Properties help consumers connect and communicate. 3. Personalization Properties could be customized by consumer to satisfy his/her personal interest. 4. Electronic Commerce Properties including shopping, travel and real estate properties are organized and coordinated by Yahoo but partners actually carried out the sales. 5. International Properties in Austrailia/New Zealand, Canada, Denmark, France, Germany, UK etc. target local users and advertisers.

Yahoo! Properties Yahoo Mail Yahoo Homepage Yahoo Search My Yahoo Yahoo News Yahoo Address book Yahoo Finance Yahoo Games

%age Share 36.71 25.48 11.75 3.08 2.61 2.16 2.10 1.04

Yahoo Answer Yahoo Group

1.03 0.76

1. Property Development
Production : Responsible for development of Yahoo!s properties Engineering : Perform heavy-duty technical tasks, building data field and servers to delivers the content of the properties. Surfing Function: Look for new website and update the directories in Yahoo!s search

2. Marketing & Sales Corporate Marketing: Responsible for developing brand name among the web surfing public.

 Sales: Selling advertisement inventory Yahoo!s 167 million page views per month. Business development:
Identify the need for partnership if any. Determine the most suitable partner and Negotiate a deal.

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3. International Responsible for all aspect of business in 38 international market in which yahoo operated including production, engineering, surfing, marketing, sales and business development.

 Distribution deal with no. of computer makers e.g. Compaq, Gateway Computers, HPs Pavilion PCs, IBMs Aptiva PCs. Deal with Internet Service Providers e.g.
AT & T WorldNet AT & T Yahoo! Online British Telecom- Yahoo! Click

Deal with Content Provider: Yahoo! Auction, Yahoo! Finance, Yahoo! News, Yahoo! Sports etc.
Yahoo receives much of its information contents for free. In exchange information providers receive links back to their sites.

Competitor
AOL/Netscape
- The Advent of The WWW

Competitive Advantage
The Best Web Service
- A Modern Media Company - Reach to the User and Level of Trust

@Home/Excite
- Broadband Tech.

Lycos, Alta vista

- Search Tech.

Core Competence
- Rapid change and Adjustment - Tailored Services - High Brand Value

CNET, ZDnet
- Vertical Sites

Resources
- High Talented People - Financial Resources - Diverse Properties - Strong Bargaining Power - High Brand Recognition

Org. Capabilities
- Flat Functional Structure - Effective Communication - Operational Excellence - Focused Short Term Plan - Unique Corporate Culture

Internal Environment Analysis

Strength - Strong brand

Consumer Analysis
What do Nonpaying Users Want ?

Yahoos Strategies
- Raise Brand Recognition - User Oriented Policy - Global Approach

Recognition - Global Presence - Has Many more auxiliary products compared to competitors

- Rapid and Accurate Search - Friendly Interface -Various and Qualified Information. - Other Service (E-mail, Chat)

- Link each Service - Look and Feel

Weaknesses
- Lack of Differentiation for almost all packaged services from competitors

-Adopt Only If Raises Customers Experience - Partnership

- Partnership

Option Risk-averse Strategy

Recommendations Develop its own depth contents Produce high speed and diverse products Strong marketing campaign to maintain brand power Control over-diversification in products Harmony internal friction Utilize benefits from getting depth and specific contents without much cost (time, money) Maintain strong relationship with existing partner Diversify and develop new products More flexibility to accommodate change of internet users

Strong Riskseeking Strategy

Weak Riskseeking Strategy