Yahoo Case Study 2013

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Yahoo – Case StudyStrategic ManagementBy: Abdullah Ensour/ Orouba Al-AjarmehSubmitted to: Dr. Is’haq Al-Sha’aarA.Case AbstractYahoo! Inc., one of the largest internet companies in the world, is present in 60 countries andavailable in 45 languages.Yahoo oFers a diversi±ed range of internet services and content, from e-mail and search tomedia streaming, downloads and adverTsing. It is a very strong brand, with more than 700million people generaTng tra²c on Yahoo properTes monthly.Yahoo’s core competencies: search capabiliTes and digital (display and search) adverTsing.Yahoo obtains revenues from markeTng services sold to adverTsers. AddiTonally, Yahoo chargesfees for a range of premium services. ³he external environment is highly compeTTve (Google and ´acebook being the leaders), with alow barriers to entry market and high threat of subsTtutes. Consumers bargaining power is high,many consumer changing habits and spending behavior. Yahoo faces a new era – of social networking (Facebook exceeded 1 billion users in 2012) andmobile internet, consumers spending valuable Tme on the former and accessing internet forany purpose (check e-mail, communicate, obtain informaTon, buy products and services,leisure) through smart phones and tablets.In the past years, Yahoo lost its compeTTve advantage - digital adverTsing franchising – drivingworsening ±nancial posiTon. New opportuniTes exist, threats are obvious (Google and ´acebook conTnuously eat-up Yahoo’smarket share), strengths can be capitalized, weakness must be improved and all in all Yahooneeds to rethink its strategic advantages and make the best course of acTon for futurecompeTTveness posiTon improvement.

CASE STUDY : YAHOO ! INC. Introduction Yahoo! began as a student hobby and evolved into a global brand that has changed the way people communicate with each other, how they find and access information, and how they purchase things (The History of Yahoo!, 2012). In 1994, David Filo and Jerry Yang, PH.D candidates in Electrical Engineering at Stanford University started a website named “Jerry’s Guide to the World Wide Web”. This Guide became a way to keep track of their personal interests on the Internet. Before long they were spending more time on their home-brewed lists of favorite links than on their Ph.D. articles. Eventually, Jerry and David's lists became too long and unwieldy, and they broke them out into categories. When the categories became too full, they developed subcategories . .. and the core concept behind Yahoo! was born (The History of Yahoo!, 2012). The name Yahoo! is an acronym for “Yet Another Hierarchical Officious Oracle,” but David and Jerry insisted the name was chosen because they loved its definition: "rude, unsophisticated, uncouth” (Gulliver’s Travels, 2012) in Gulliver’s Travels. David and Jerry found they were not the only ones that needed a single place to find useful information from the website. At the same time, other students at Stanford University used the website. Word spread quickly and Yahoo! became a closely-knit Internet community. Yahoo! celebrated its first million-hit day in the fall of 1994, translating to almost 100 thousand different visitors (The History of Yahoo!, 2012). Their website developed so fast that David and Jerry realized there were some potential business opportunities around them. In March 1995, David and Jerry met with and incorporated with some investors in Silicon Valley. In April 1995, David and Jerry came across Sequoia Capital, the well-regarded firm whose most successful investments included Apple Computer, Atari, Oracle and Cisco Systems. They agreed to fund Yahoo! in April 1995 with an initial


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