Yahoo! Inc Strategy

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As one of the leading pioneers of internet Yahoo! was founded in 1994 on board a trailer on Stanford’s University’s campus by Jerry Yang and David Filo. Yahoo’s core came from display and search advertising such as billboards on top of homepages. However the company faced losses due to poor management decisions which in turn angered the shareholders. By 2010 Yahoo’s revenues estimated roughly $6.3 billion which of 84% came from advertisement and the remaining from subscription fees for photo services and real estate. Yahoo’s motivation came from having a unique product and was not a means to a larger business model. As internet grew bigger and more companies entered the market the rivalry stared to worry the decision makers in Yahoo. Several companies offered to purchase the company but met with resistance and that became recognition for independence for Yahoo. After 2001 with the growth of the internet, U.S economy was undergoing recession and companies’ revenues were declining, among them the Yahoo’s shares which fell from a high $42.88 to a low $9.09. Vivendi a French entertainment company offered to combine the firms but were hindered due to protectionism and despite the financial difficulties Yahoo was determining to remain independent. Company loss and angry shareholders led the first CEO of the company Timothy Koogle to step down and the management was now looking into music and movies to boost exposure and profits. A new CEO with many years of experience and success within Hollywood was now chosen to guide Yahoo! Terry Semel had no background in technology and advertisement but the board convinced Roy Bostock, with many years of advertising experience, to join the team. Yahoo’s biggest competition Google had its major breakthrough in 2004 by exposing a different approach of exposing advertisements. The ad clicks which was shown on the side of the search results generated 40% advantage over its competitor Yahoo! To counter Google’s tactics Yahoo! paid...
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