Yahoo Case Analysis

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Yahoo Case Executive Summary This case study analysis is on Yahoo! (referred to also as “Yahoo”). Yahoo (Nasdaq: YHOO) is a global internet services company that operates the Yahoo! Internet portal. It provides varied products and content, from email and search to media streaming and downloads. As of February 2010, it is the third-most popular Internet site in the United States in terms of monthly traffic, with visits by more than 120 million unique users every month (Yahoo. Wikinvest). The Case Study includes an Introduction, Company Overview, Company Mandate, Internal Analysis and External Analysis. Critical Findings: The key to revenue growth is via an increase in the monetization of search, and additional fees generated from quality, premium services (retail sales, personal ads, ads for selling or renting merchandise, data storage, photo sharing and various e-commerce services). Yahoo must develop new content and services. With more competitive pricing for advertising combined with the formidable market dominance of Google, Yahoo must do a number of things to enhance its revenues, including vastly improving its search engine technology, its searchbased advertising, beefing up its Internet video-advertising capabilities, pursuing further global expansion (especially into Asian markets), and improving its cross-channel advertising program. Introduction This report is on Yahoo, and considers the Company’s Overview and its Mandate. A thorough External and Internal Analysis is also carried out. The limitations of this report are a result of the fact that the report relies primarily on the information and facts as presented in “Yahoo” as prepared by Gareth R. Jones in 2007, and to a lesser extent, the fact and information presented in “Internet Search and the Rise of Google”, as prepared by Charles W.L. Hill. External references that were used include the Yahoo 2009 Annual Report, and the Yahoo Company profile from Wikinvest.

Company Overview Yahoo! Inc. (Nasdaq: YHOO) is a global internet services company that operates the Yahoo! Internet portal. It provides varied products and content, from email and search to media streaming and downloads. Yahoo! was developed and first made available in 1994 by its founders, David Filo and Jerry Yang, while they were graduate students at Stanford University. Yahoo was incorporated in 1995 and is a Delaware corporation. The Company is headquartered in Sunnyvale, California, and has offices in more than 25 countries, provinces, or territories in which Yahoo! conducts business by offering products or services to local audiences (Yahoo 2008 Annual Report). As of February 2010, it is the third-most popular Internet site in the United States in terms of monthly traffic, with visits by more than 120 million unique users every month (Yahoo. Wikinvest). Yahoo's “marketing services" segment - which makes up its online advertising business - made up 88% of the company's revenues in FY2009 (Yahoo. Wikinvest). Google and Yahoo! are the recognized leaders in this market, but the balance of power shifted significantly since 2004, when the companies posted similar revenue and operating margins. Google has since eclipsed its main rival - in fiscal 2008, it generated 67% more revenue ($21.8 billion) than Yahoo! ($7.2 billion) with a profit margin over three times as high (19.4% vs. 5.89%)

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(Yahoo. Wikinvest). Yahoo generates revenues by providing marketing services to advertisers across a majority of Yahoo! Properties and Affiliate sites. Additionally, although many of the services the Company provides to its users are free, Yahoo does charge fees for a range of premium services (Yahoo 2008 Annual Report). Yahoo provides services in more than 30 languages and in more than 30 countries, regions, and territories, including localized versions of Yahoo! in Argentina, Australia, Brazil, Canada, Chile, China, Columbia, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan,...
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