Yahoo! Search Jonathan Glick – Sr. Manager Yahoo! Search [email protected] Sept. 28, 2004.
2002. Mendoza MBA, e-commerce class. Presentation on Yahoo strategies
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Transcript of 2002. Mendoza MBA, e-commerce class. Presentation on Yahoo strategies
DO DO YOU YOU
??
Content DirectoryContent Directory
HistoryWhat is Yahoo? , History , Team , Strategic Changes ...
Yahoo! TodayServices , Competitors , Business Model
Industry Attractiveness5 FORCES , Advantages , Network Value
Strategic ChallengesCompetition , Industry , Strategic Fit ...
Strategic ChoicesAdvertising Engine , Merger , Media-Content Provider , SMB’s Engine ...
Questions and AnswersSubmit your Questions …
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What is Yahoo?What is Yahoo?
The name of a race of brutish creatures resembling men in Jonathan Swift's Gulliver's Travels.
What is Yahoo?What is Yahoo?
Internet portal with 237 mln. visitors
70% reach in the US
25 international sites in 13 languages
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TimelineTimeline
Yah
oo!
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1994 1995 1996 1997 1998 1999 2000 2001 2002
Tim
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ahoo
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ory
Geo
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Rise and FallRise and Fall
Management Management ChangeChange
Tim KoogleJerry Yang & David Filo Terry Semel
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Strategic ChangesStrategic Changes
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Aggressive cost-cutting
reshaping 44 business units into 6 , 12% of workforce laid off
Conversion to paid listings and services
Sale of premium listings to Overture , Yahoo! Business Listings, Mail
Strategic ChangesStrategic Changes
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More non-advertising revenues
Movies on Demand , Small business hosting , Games , Music & movie downloads
Partnerships & Acquisitions:
GeoSities, equity stake in Google, HotJobs, Yahoo!Music, SBC
Paid Space on Screen Real Estate: 9%
Methodology – Jakob Nielsen, Nielsen Norman Group
Paid Space on Screen Real Estate: 54%
Methodology – Jakob Nielsen, Nielsen Norman Group
Profits Profits UpUp Again Again
Yahoo! Profits in 1998-2002
-120
-100
-80
-60
-40
-20
0
20
40
60
80
1998 1999 2000 2001 2002
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36,6 mil36,6 mil
TodayToday
Internet portal with 237 mln. visitors
70% reach in the US
25 international sites in 13 languages
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TodayToday
$ 1,5 billion cash reserves
$ 36,6 mln. profit by the end of 3rd Q 2002 (not counting HotJobs)
Stock $ 14.3 as of Oct 28.
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TodayTodayStrategic Acquisitions
VivaSmart
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ServicesServices
Services > Commerce
ServicesServicesServices > Communication
ServicesServices
Services > Information
ServicesServices
Services > Listings
ServicesServicesServices > Media
ServicesServices
Services > Other
Portal Business Model Portal Business Model
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Advertisers
Banner Ads, Sponsorships, Paid listings, visitor information
Catalog Merchants
Transaction fees,
Buy Add Value Sell
Search Technology
Google, Inctomi,
Overture, ODP, etc.
Yahoo! Business Model Yahoo! Business Model
Buy Add Value Sell
Search Technology
Teoma, Inctomi,
Overture, Divine
Broadband
SBC
237 mil. users per month
70 percent reach in the U.S.
44 services
Advertisers
Banner Ads, Sponsorships, Paid listings, visitor info
E-businesses
Transaction fees,Web hosting , e-marketing fees, portals, ASP, document search service
Gamers
Game rent commissions
Entertainment
Games on Demand,
Internet users
Dial-up and DSL fees
CompetitorsCompetitors
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Strategy - Network ValueStrategy - Network Value
eBayeBayYahoo!Yahoo!
Discovery Discovery
Implications:
Yahoo! should maintain visitor growth to attract more advertising profits, yet the value of the Yahoo! Network is finite. finite.
Strategy - Strategy - 5 Forces in Portal Industry5 Forces in Portal Industry
Suppliers - WEAK
Users, website owners, web databases, ISP
Buyers - STRONG
Advertisers, e-businesses, internet users
New Entrants - STRONG
Web Databases, Vertical Portals
Substitutes - STRONG
Search Engines , Meta-Crawlers , Independent Web Directories, pay-per-click engines
Competitors
Search Engines, Media Portals
Strategy - Competitive AdvantagesStrategy - Competitive Advantages
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Largest Human-Compiled Web Directory
Most relevant web searches from Teoma-Google
Independent On-line Entertainment On-Demand Partner
No studio affiliations like Netscape and Google
No technology-control like MSN
Hollywood connections
Brand Image
Synonymous to Internet in the rest of the world. Must-be online advertising item.
StrategicStrategic ChallengesChallenges
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Undefined Strategy
No defined strategic niche.
StrategicStrategic ChallengesChallenges
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Undefined Strategy
No defined strategic niche.
Increased Competition among Portals for paid services
Google leading in search technology and audience
Pay-per-click listings prevail
Consolidation of portals with media & telecom companies (AOL-Time Warner, Microsoft, Bertelsmann)
Forward integration of search technology providers
StrategicStrategic ChallengesChallenges
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Undefined Strategy
No defined strategic niche.
Increased Competition among Portals for paid services
Google leading in search technology and audience
Pay-per-click listings prevail
Consolidation of portals with media & telecom companies (AOL-Time Warner, Microsoft, Bertelsmann)
Forward integration of search technology providers
Limited business model potential
Very vulnerable to loss of critical mass of users, because of Metcalfe model
StrategicStrategic ChallengesChallenges
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Undefined Strategy
Increased Competition among Portals for paid services
Limited business model potential
StrategicStrategic OptionsOptions
p2p auction portal
Auction model like eBay
p2p music download portal
underground music&downloads like late Napster (Mike’s and Stef’s idea)
StrategicStrategic OptionsOptions
World Portal
Largest independent info-mediary
Independent Media Portal
Hollywood’s favorite on-line partner
Small Business Support Portal
Largest independent info-mediary
World PortalWorld Portal
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propro contra
+ Leveraged by brand image
+ Core competency
+ International expansion
+ Affiliation with Google
- Heavy dependence on advertising revenues
- Heavy competition
- Finite growth potential and network value
GroupGroup portal portal - Auctions - Auctions
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propro contra
+ Infinite network value
+ Yahoo! has “critical mass” of users for effective start
+ High revenue potential from transactions
+ Acquired e-payment technology from Arthas
- Yahoo! Auctions failed to compete with eBay
- Core competency not in paid group ware services
- Strong competition (eBay and AOL)
GroupGroup portal portal – music downloads – music downloads
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propro contra
+ Infinitely leverageable network value
+ First-mover advantage
+ Management connections with Hollywood
+ Entertainment industry’s largest star* test-market
+ Image of worldwide independent and entrepreneurial brand
- Long pay-off time
- Risky revenue model
MediaMedia & Game Portal & Game Portal
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propro contra+ CEO’s Hollywood connections
+ Independent portal
+ Broadband capability
+ Revenue model less affected by economic downturn
- Paying Audience limited to broadband Internet users
- Large dependence on advertising
- Finite network value potential
- Competition from AOL-Time Warner
Small Businesses PortalSmall Businesses Portal
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propro contra+ Small Businesses moving on-line
+ Cost advantage for e-marketing solutions
+ Affiliation with Google
+ Experience (Yahoo! Shops, Geocities)
- Direct competition (Microsoft bCentral)
- Forward integration from search providers (Google and Overture)
- Not core competence in marketplace services
Future?Future?
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Media portal +Media portal +
Info-mediary +Info-mediary +
Small Businesses PortalSmall Businesses Portal
How to Submit Your Questions
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We ask that you follow three simple, yet important steps if you have a question you'd like to suggest:
Step 1: Check to See if Your Question Has Been Already Answered by Yahoo! Presentation. An important first step, because if your question is already asked, you need go no further.
Step 2: Find the Appropriate Question Category in Yahoo! Presentation
Step 3: Submit the Appropriate Question. Do this simply by asking Vartan or Yana after presentation.
Finally, thanks for your attention and questions .