Yahoo Case Study

Report write-up on yokel Case study yahoo was conceptualized almost accidentally in 1993 by Jerry Yang and David Filo who were pursuing their electrical engineering degree from Stanford University while posting a list of their favorite sites on the weathervane, got officially founded in 1994 and incorporated in the year 1995. Initially named Jerrys guide to founding wide web, got later named yokel which was an acronym for Yet another Hierarchal Officious prophet.The term Hierarchal described how the yahoo database was arranged, the term officious describing the some(prenominal) office workers who would use hick from their work place and oracle suggesting a consultation of wisdom. Today yokel Inc. is a multinational internet corporation best known for its web portal, search engine (Yahoo Search, 2 in search engine mart dispense with 6. 8% market share) and for a variety of other services, including Yahoo Directory, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Groups, Yaho oAnswers, advertizing, online mapping, video sharing, fantasy sports and its social media website. With tax figures of $4. 9B for FY2011, and a market capitalization of $23. 8B, Yahoos mastery story comprises umpteen hits and more misses. After the modest web directory started to attract large influx of visitors on a daily basis, Yang and Filo decided to make business of it by renting advertising space on the Yahoo Directory pages. smashing coronation came in from Sequoia Capital, who proposed to hire a professional CEO to sweat the business ahead.After a careful evaluation of a half-dozen candidates, Michael Moritz of Sequoia Capital chose Timothy Koogle, who brought 15 years of leadership experience in sophisticated management. Timothy had to use great influence and persuasion skills to bring everybody on board on his vision for the company, one that would create a world machine-accessible via the web. His vision encompassed leveraging the companys existing cogency of th e web directory by providing more and more compelling content and cause higher advertising tax.At the same time, create an online platform where grease ones palmsers could meet sellers, transacting safely over the internet and charging a cut of the revenue for these services provided. They to a fault added customization features for their registered users on their Yahoo financials page so that specific companies of interest could be followed by the users. Along the way, they also helped advertisers r distributively issue to their relevant audience discover and thereby increasing the value delivered to them. The strategy was working out very well for Yahoo. Yahoo grew rapidly throughout the 1990s.It also make many high-profile acquisitions. While everything was going great for Yahoo, they failed to evaluate their strategy at that juncture. The environment they were thriving on was that of the dot-com bubble and most companies that were sources of advertising revenue for Yahoo w ere the dot-com companies. When the dot-com bubble burst, most of these companies went crush drying out sources of advertising revenue for Yahoo. Its stock price skyrocketed during the dot-com bubble, Yahoo stocks closing at an all-time high of $118. 5 a share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $4. 05 on September 26, 2001. While the corporate level vision and strategy were forward looking, the business level strategy needed timely review, the lack of which brought close to the downward spiral of Yahoo in a short span. owe to a huge negative impact on the shareholders value, Tim Koogle resigned giving the heirs to terry Semel, a former Warner Brothers executive.Semels goal was to arrest the fall in Yahoos revenues by diversifying from the hitherto advertising centric revenue model to subscription-based, value-added services and increasing the quality in advertising revenue by targeting more stable companies. This strategy was viewed as but a late reaction to the changing market landscape, something that investors expected the leadership to foresee. terrycloth Semel also had his share of low moments as CEO of Yahoo during the disapproval he drew for cooperating with the Chinese officials to release previously confidential Yahoo information to the Chinese government.He also lost a chance to buy out Google during its nascent years, whose search engine services it used savings bank Yahoo developed its own search engine technologies. Over the years, Yahoo also failed to catch the market trends of social, mobile, local, platform services etc. at the right times, which has resulted in diminishing market share figures in each of the spaces. While Yahoo revenue has dipped for the year 2011, the companys financials look strong with low debt and good cash flow.Companys freshly management team is betting big on mobile and connected TV businesses. Mobile applications, where the company is lagging behind compe titors like Google and Facebook, is a business line it must produce a turn-around performance on since the markets a trending in that direction. Marissa Mayer, former Google executive, who is now at the helm of the $5B company, would fancy to bring her successful experience at Google to Yahoo to deliver the goods on the Mobile platforms business. Discussion Questions . To what extent was the evolution of strategy at Yahoo planned? To what extent was it an emergent response to unforeseen events? Yahoos initial strategy during Koogles time of foraying into advertising and online portal for facilitating e-commerce and obtain were a planned strategy and were apt for the company with its inherent strengths. however, the portfolio variegation undertaken by Semel was an attempt to lower the risk exposure as a response to the changed business environment. 2.Could Yahoo harbor done a better job of anticipating the slowdown in advertising revenue that occurred in 2000 2001 and perspectiv e itself for that slowdown? How? What might it have done differently from a strategical planning perspective? In order to achieve a bear on competitive advantage, a firm must adapt to the change in the market trends. As a strategy evaluation process, yahoo could have foreseen the dot-com bubble burst as the bubble formation was a process that had initiated around 98. Analysts highlighted the risk in staying invested with the dot-com companies.There was surplus income functional with retail investors during that period, which is suggestive of a trend of higher demand of regulation goods / services over inferior goods / services. Yahoo could have seen this trend and positioned itself for a niche product / service offering. 3. Does Yahoo have a source of potential long-term competitive advantage? Where does this come from? Yahoo has a good cash flow a low debt and also a business model in place for buyers to meet sellers. Social Media has compete a key role in penetrating the mar ket creating sensation of using the online medium.Yahoo has the system in place to capitalize this strength in order to optimally utilize the buyer-meet seller platform expand it from retail presence to corporate interactions, include a model that addresses webinars for multiple industries eg pharmaceutical company meet can be entirely conducted online creating a significant follow advantage for the participants and also adding to its revenue by marginal investments that wont come across its balance sheet either. 4. What does Koogles resignation in May 2001 severalise you about the role of a CEO in a worldly concern company?CEOs role in a general company has evolved over the years, but in essence, remains that of a steward of the shareholders value. Koogle had a very good vision and strategy for the company, which did transpire into success initially. While the formulation of the strategy may have been done well, the deed at the business level and evaluation of the strat egy could have been better. yet towards the end of Terry Semels tenure in 2006, his salary was reduced to only $1 (with $70M worth of stock options ofcourse) due to shareholders dissatisfaction.