Case Analysis of Yahoo Business Model

Topics: Yahoo!, Web search engine, Dot-com bubble Pages: 9 (1488 words) Published: September 7, 2014
Yahoo Business Model

August 23 2014

Yahoo! business model is to perform value creation activities to maximum its long run profitability in the internet advertising industry. Yahoo! first started as a simple directory. And today, it’s a global internet communication, commerce, and media company that serve 237 million individual users monthly. Because of the huge number of users now are using Yahoo! as a first look up website, its advertising revenue become a lot. To have a competitive advantage and get maximum profitability, Yahoo! decided to pursue vertical integration strategy. The benefit of vertical integration is to increase the quality of their products.­­

Yahoo Business Model
Yahoo! Inc. is an American multinational Internet corporation headquartered in Sunnyvale, California. It is globally known for its Web portal, search engine Yahoo Search, and related services, including Yahoo Directory, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Groups, Yahoo Answers, advertising, online mapping, video sharing, fantasy sports and its social media website. It is one of the most popular sites in the United States. According to news sources, roughly 700 million people visit Yahoo websites every month. Yahoo was founded by Jerry Yang and David Filo in January 1994 and was incorporated on March 1, 1995. On July 16, 2012, former Google executive Marissa Mayer was named as Yahoo CEO and President, effective July 17, 2012. According to comScore, Yahoo during July 2013 surpassed Google on the number of United States visitors to its Web sites for the first time since May 2011, set at 196 million United States visitors, having increased by 21 percent in a year. Yahoo grew rapidly throughout the 1990s. Like engines and Web directories, Yahoo added a web portal. By 1998, Yahoo! was the most popular starting point for web users. It also made many high-profile acquisitions. Its stock price skyrocketed during the dot-com bubble, Yahoo stocks closing at an all-time high of $118.75 a share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $8.11 on September 26, 2001.

Business Model
To take an early view of this company, one can come to realize that it was actually bravery and uniqueness that contributed to most of Yahoo's young business plan. The owners had the veracity and guts to take their web site to the next level, from a small web site list to a well-known brand name and beyond. Most of the foundations for Yahoo were laid before the Dot Com Boom, meaning very few people had ever made a venture like this one. Yahoo's business model was about stepping up and taking risk. The founders of this great company strove to make their web site unique, a feature-full piece of the internet that would consolidate the regular web user's preferences into one place. Yahoo was about having a home on the internet. Soon Yahoo grew, and soon after the Dot Com Boom they were making share-price history, particularly in Japan. Things were going exceptionally well for this company, but as competition entered the fray, the young business minds behind the behemoth realized that their business model had to change. It was no longer unique in the sense that web sites like MSN and Google were bumping shoulders. Yahoo was in danger to losing their appeal. That's when they realized that their primary focus from there on in would have to be diversification. Yahoo wanted to be about having everything you needed on the internet in one place. As technology developed people were doing more and more of their regular business online. Yahoo had to diversify and fast. Yahoo primarily wanted people to be able to find whatever they needed on this web site, so they soon started acquiring search engines. They later made a deal with Google and made a partnership with the largest search engine on the internet. This of course wasn't enough to fit their business model of diversification. Yahoo...

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