Yahoo! - Case Study

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YAHOO!

Introduction

Yahoo! was created by two Electrical Engineering students from Stanford University – David Filo and Jerry Yang in 1994. At first, Yahoo! was a catalogued websites and it published the directory for free on the internet. The original version was called Jerry and David’s Guide to the World Wide Web. Then it was renamed as Yahoo!, an acronym of “Yet Another Hierarchical Officious Oracle” when Filo and Yang left their studies. The humorous name caused some confusion early on, but it worked in setting Yahoo! apart from traditional companies.

Yahoo!’s Success

Yahoo! was among the very first searchable guides of the internet. The sites attracted hundreds of thousands of web surfers within a year of its introduction (Keller, 2008). The company’s search engine was unique because it have a massive searchable, in addition of standard word features. The dissemination of Yahoo! was fuelled by Netscape decision in 1995 to make Yahoo! the default search engine of his browser. This early attention attracted investors.

Online Advertising

Yahoo! plans to generate revenues through advertiser support in July 1995. The ads were typically rectangular boxes, called “banners”, placed in prominent locations at the top or

bottom of a web page. Yahoo! could deliver a large number of web surfers to its advertisers because the nature of a search engine. Search engine were among the most heavily trafficked sites on the internet. As traffic to the Yahoo! site increased, so did its advertiser base. Between second quarter of 1996 to second quarter of 1997, the average number of times people viewed Yahoo!’s homepage per day grew from 9 million to 38 million (Keller, 2008). Over the same period, the number of Yahoo! advertisers grew from 230 to 900. By fourth quarter of 1997, the company averaged 65 million page views daily and had 1700 advertisers.

Yahoo!’s Brand Positioning

Yahoo! sought to convey fun and irreverent attitude that originated from the personalities of founders, Filo and Yang. Yahoo! went public in April 1996. In order to capitalize on this momentum, Yahoo! hired Black Rocket, a small advertising agency to develop a $10 million awareness-building campaign (Keller, 2008). Black Rocket positioned Yahoo! as a consumer brand rather than a technology company. Karen Edwards (Yahoo! Marketing Director) explained the positioning emerged because:

“…search engine are no longer [just] search engine. We feel more like media companies, providing information via various formats…”

Yahoo!’s Marketing Strategy

Yahoo! began traditional media advertising in April 1996 with a television campaign that was followed by print and radio ads with the introduction of “Do You Yahoo!”. Yahoo! was one of the first internet portal to realize that mainstream media buys were important in

generating new customers that had yet to spend time on the internet (Keller, 2008). The Yahoo!’s marketing effort targeted consumers who intended to use the internet for the first time, referred as “near surfers”. Near surfers tend to be brand sensitive and more brand loyal. Yahoo! integrated marketing program projected a targeted image to different audiences (Keller, 2008). To consumer, Yahoo! associated themselves as Fun, Wacky and Easy to Use; to Financial Analyst – Professional & Well Run; and to Media buyers – Market Leaders & Online Experts. The marketing program measurably increased consumer knowledge of Yahoo!. Many felt that a key to Yahoo!’s success was the consistency if it’s advertising (Keller, 2008). Yahoo! stood out from the chaos by sticking to the same brand image.

Yahoo!’s Transformation

Yahoo! transform from a portal to a destination site where web surfers lingered and stayed to Yahoo! site. The key in retaining an audience was developing a ‘sticky’ site wth appealing content that kept consumer ‘eyeballs’ glued to the site’s page. As the need to expand beyond a search engine portal increased, executives...
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