Sweet Spot Case Study
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Sweet Spot Case Study
Rahul Gupta
9/11/03
CS453 E-commerce Technologies
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Background
• Two founders from Stanford: David Filo and Jerry Yang [4]
• Started in February 1994 in a campus trailer [7]• Incorporated in March 1995 [6]• In April 1995 funded by Sequoia Capital with an
initial investment of about $2 million [7]• Went public in April 1996 [6]• Corporate Headquarters in Sunnyvale, CA [6]• Director and former-CEO of Yahoo, Timothy Koogle,
is a Wahoo! [6]
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Why was it started?
• Started as a way to keep track of their personal interests on the Internet [7]
• Evolved into a complete online navigational guide [7]
• Initially called “Jerry's Guide to the World Wide Web” [7]
• Yahoo! acronym for “Yet Another Hierarchical Officious Oracle” [7]
• Definition of Yahoo accepted by creators: rude, unsophisticated, uncouth [7]
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What’re the consumer functions?
• Provides internet content from over 2000 top-of-the-industry providers in areas such as news, travel, sports, games, and weather. [6]
• Provides commerce services such as shopping, auctions, finance, and classifieds. [6]
• Provides communications services such as Mail, Messenger, Photos, Greetings, and Clubs. [6]
• Yahoo! Everywhere provides consumers with mobile access to information via devices including wireless phones, two-way pagers and PDAs. [6]
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What’re the enterprise functions?
• Marketing: Enables agencies and clients to find and connect to audiences through Fusion Marketing. [6]
• Business and Enterprise Services: Integration of commerce, communications and media into web portal and similar services via Corporate Yahoo!, Yahoo! Broadcast Services, Yahoo! Small Business. [6]
• Premium Services: Yahoo! Store, Business Express, Yahoo! Yellow Pages, Yahoo! Auctions, Yahoo! Bill Pay, and extra mail storage. [6]
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Who are the customers?
• More than 237 million unique worldwide users in 25 countries and 13 languages (December 2001). [4]
• 93 million active registered users [5]
• More than 1.5 billion page views a day [5]
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How does Yahoo! compare?
Taken from reference [9]
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How it compares cont’d
Taken from reference [9]
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Awards
Taken from reference [9]
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Why is Yahoo special?
Taken from reference [9]
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Front-end of main portal
Taken from reference [1]
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Front-end of Yahoo! Search
Taken from reference [2]
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Front-end of Yahoo! Auctions
Taken from reference [3]
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Back-end
• Yahoo at first used a proprietary server-side page language written in C/C++ [5]
• Transitioned to PHP in 2002 [5]• 4500+ servers in 16 co-locations [5]
– USA: Sunnyvale, Santa Clara, San Diego, Washington DC, Dallas
– Intl: England, Central America, South America, Taiwan, Hong Kong, Singapore, China, Australia, India, Japan, Korea
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Acquisitions
Yahoo! has acquired twenty companies since its start. [6]
Taken from reference [6]
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Financial information
• The opening price of Yahoo!'s stock on the day of the IPO was $13.00 per share and the closing price on that day was $33.00 per share. [6]
Taken from reference [10]
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How’s Yahoo! doing now?
• For Fiscal Year 2002 [8]:– Revenue per average Unique User per month:
$0.40– Net Revenues Total: $953.1 million– Net income (loss): $42.8 million– Net income (loss) per share: Diluted: $0.07– Free Cash Flow: $221.0 million
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Spectacular successes
• According Nielsen/NetRatings 8/2002, Yahoo! is the World’s most trafficked Internet destination. [5]
• First all-encompassing portal/guide to the Internet [4]
• Takes number 1 spot on corporate desktops, with a 70%+ reach in the U.S. workplace[4]
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Spectacular successes cont’d
Taken from reference [9]
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My Thoughts on Yahoo!
• I believe that Yahoo! is going to continue to be very successful due to it’s extremely wide breadth. It turned a healthy profit early in its history and each year that profit has increased. I predict that it will continue this same trend in the coming years.
• Yahoo! Search is a great feature designed to rival the simplicity of Google, but it might not be enough to recapture the customer-base that Google has earned. I personally use Google as my main search engine because it gets me what I want quickly and accurately.
• Even with so many formidable competitors I believe that overall Yahoo! is still unique due to the fact that it seems to have everything that most people use on a day to day basis such as search, auctions, sports coverage, news, directories, music, movie reviews, and email.
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References
1. Yahoo!: http://www.yahoo.com
2. Yahoo! Search: http://search.yahoo.com/
3. Yahoo! Auctions: http://auctions.shopping.yahoo.com/
4. Company Overview: http://docs.yahoo.com/info/misc/overview.html
5. Making the Case for PHP at Yahoo!:http://public.yahoo.com/~radwin/talks/yahoo-phpcon2002.htm
6. FAQ: http://docs.yahoo.com/info/pr/faq.html
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References Cont’d
7. The History of Yahoo! - How It All Started... : http://docs.yahoo.com/info/misc/history.html
8. Supplementary Financial Information: http://docs.yahoo.com/info/investor/metrics.html
9. Yahoo! Facts & Figures: http://solutions.yahoo.com/advertiser_center/research/factsandfigures.html
10. Yahoo! Investor Information: http://yhoo.client.shareholder.com/11. TechWeb: Yahoo Turns Reputation Into Acquisitions:
http://www.techweb.com/wire/story/TWB19990401S0016
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References Cont’d
12. Yahoo! Introduces New Yahoo! Search: http://yhoo.client.shareholder.com/ReleaseDetail.cfm?&ReleaseID=105839
13. Yahoo! Auctions Introduces Offline Seller's Management Tool: http://docs.yahoo.com/docs/pr/release709.html
14. Press Release: Yahoo! No. 1 Online Music Destination in the U.S. According to Nielsen/Netratings' Marketview Report: http://docs.yahoo.com/docs/pr/release990.html
15. Press Release: Yahoo! No. 1 Search Destination in the U.S. According to Nielsen/Netratings' March Marketview Report : http://docs.yahoo.com/docs/pr/release983.html
16. Press Release: New Yahoo! Shopping Network Ranked the No. 2 Online Shopping Destination by Nielsen/Netratings: http://docs.yahoo.com/docs/pr/release904.html