Yahoo Ryan Pereira

8/1/2019 Yahoo Ryan Pereira

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PRESENTATION ON MARKETING STRATEGIES

Ryan Pereira


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Table of ContentsIntroduction to the company and the industry ........................................................................................ 2

Industry Trends ......................................................................................................................................... 5

Performance over the Last Five Years ...................................................................................................... 7

SWOT Analysis- Yahoo! ............................................................................................................................. 9

Marketing Strategies- Yahoo! ................................................................................................................. 11

Marketing Mix ..................................................................................................................................... 11

Marketing Strategy of Competitor .......................................................................................................... 14

Positives and Negatives of Strategies ..................................................................................................... 16

Directions the company's marketing strategy should take in the near future ....................................... 20

Introduction to the company and the industry

Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale,

California, United States. The company is best known for its web portal, search engine (Yahoo!

Search), Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo!

Answers, advertising, online mapping, video sharing, fantasy sports and social media website

and services. It is one of the largest websites in the United States.


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Introduction to the company and the industry

Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale,

California, United States. The company is best known for its web portal, search engine (Yahoo!

Search), Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo!

Answers, advertising, online mapping, video sharing, fantasy sports and social media websiteand services. It is one of the largest websites in the United States.

Yahoo! began as a student hobby and evolved into a global brand that has changed the way

people communicate with each other, find and access information and purchase things. The

two founders of Yahoo!, David Filo and Jerry Yang, Ph.D. candidates in Electrical Engineering at

Stanford University started their guide in a campus trailer in February 1994 as a way to keep

track of their personal interests on the Internet. Before long they were spending more time on

their home-brewed lists of favorite links than on their doctoral dissertations. Eventually, Jerry

and David's lists became too long and unwieldy, and they broke them out into categories. When

the categories became too full, they developed subcategories ... and the core concept behind

Yahoo! was born.

The Web site started out as "Jerry and David's Guide to the World Wide Web" but eventually

received a new moniker with the help of a dictionary. The name Yahoo! is an acronym for "Yet

Another Hierarchical Officious Oracle," but Filo and Yang insist they selected the name because

they liked the general definition of a yahoo: "rude, unsophisticated, uncouth." Yahoo! itself first

resided on Yang's student workstation, "Akebono," while the software was lodged on Filo's

computer, "Konishiki" - both named after legendary sumo wrestlers.

Jerry and David soon found they were not alone in wanting a single place to find useful Web

sites. Before long, hundreds of people were accessing their guide from well beyond theStanford trailer. Word spread from friends to what quickly became a significant, loyal audience

throughout the closely-knit Internet community. Yahoo! celebrated its first million-hit day in

the fall of 1994, translating to almost 100 thousand unique visitors.

Due to the torrent of traffic and enthusiastic reception Yahoo! was receiving, the founders

knew they had a potential business on their hands. In March 1995, the pair incorporated the

business and met with dozens of Silicon Valley venture capitalists. They eventually came across

Sequoia Capital, the well-regarded firm whose most successful investments included Apple

Computer, Atari, Oracle and Cisco Systems. They agreed to fund Yahoo! in April 1995 with an

initial investment of nearly $2 million.

Realizing their new company had the potential to grow quickly, Jerry and David began to shop

for a management team. They hired Tim Koogle, a veteran of Motorola and an alumnus of the

Stanford engineering department, as chief executive officer and Jeffrey Mallett, founder of

Novell's WordPerfect consumer division, as chief operating officer. They secured a second

round of funding in Fall 1995 from investors Reuters Ltd. and Softbank. Yahoo! launched a

highly-successful IPO in April 1996 with a total of 49 employees.


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Today, Yahoo! Inc. is a leading global Internet communications, commerce and media company

that offers a comprehensive branded network of services to more than 345 million individuals

each month worldwide. As the first online navigational guide to the Web, www.yahoo.com is

the leading guide in terms of traffic, advertising, household and business user reach. Yahoo! is

the No. 1 Internet brand globally and reaches the largest audience worldwide. The company

also provides online business and enterprise services designed to enhance the productivity andWeb presence of Yahoo!'s clients. These services include Corporate Yahoo!, a popular

customized enterprise portal solution; audio and video streaming; store hosting and

management; and Web site tools and services. The company's global Web network includes 25

World properties. Headquartered in Sunnyvale, Calif., Yahoo! has offices in Europe, Asia, Latin

America, Australia, Canada and the United States.

A web portal is a web site that brings together information from diverse sources in a unified

way. Usually, each information source gets its dedicated area on the page for displaying

information often; the user can configure which ones to display.

Apart from the standard search engine feature, web portals offer other services such as e-mail,news, stock prices, information, databases and entertainment. Portals provide a way for

enterprises to provide a consistent look and feel with access control and procedures for

multiple applications and databases, which otherwise would have been different entities

altogether.

Examples of public web portals are AOL, Excite, iGoogle, MSN, Netvibes, and Yahoo!


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Industry Trends

SEOToday links and PageRank matter less and less. In 2011 more ranking factors were about other

signals than conventional a href links. Google, Bing, Yahoo will use all kinds of other data

including feedback human quality raters to overcome the big decade long link buying spree.

Freshness Today there exists a constant need to update and upgrade. Along with this there is

a need to look new as well as present a secure web portal.

Quality it is all about high quality sites. Thus focusing on quality metrics that entail usability,

readability and overall usefulness is the key.

SEO is just a part SEO isnt dead in 2012, but its more and more part of bigger ideas and

concepts. The new en vogue terms are content marketing, inbound marketing, digital

marketing or Internet/online marketing (again).

SEO marries CRO The two disciplines, SEO and CRO or conversion optimization are just two

sides of one coin. While SEO focused on getting traffic, CRO concentrates on making this traffic

work for you.

Search

Google Google has quickly reacted to competition from small contenders like Blekko, Ixquick

and DuckDuckGo. It has appropriated all improvements and features by these faster

competitors be it the removal of content farms by Blekko or the introduction of SSL search

by Ixquickor referral blocking by DuckDuckGo, Google offers it all now as well.

Even more confusion The clutter results a single search on Google or Yahoo generates in very

high. This creates confusion for users and is every increasing.

Search without clicking in 2011 several small moves by Google showed a tendency to show

search results as content directly on Google, thus making a click to the actual page not

necessary anymore. We will see more of it until people start suing Google for stealing their

content.

Google does it already on Google News, Google Places and Google Images. It also owns

YouTube, where most video searches end up. They want the same thing for text search as well.

They dont want people to leave Google properties at all. Google+ brand pages just add to it.

It reads your mind we already got used to the sometimes annoying instant search results that

appear even before you type something meaningful. They work on more ways to find out what

you need and give it to you even before you ask. Just consider the multiple data sources web

portals now have about you: Google/Bing/ Yahoo toolbar, Chrome, Profiles, search history


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Speech recognition Siri, the speech recognition assistant on the latest iPhone, makes

people talk with their phones and its extremely popular already. In 2012 we will see Apples

competitors come up with similar tools so that we dont need to talk to people or type in search

queries anymore.

No, it just means different kinds of queries, maybe more colloquial or clumsy ones. Maybe

more dialogue with your search engine, for example I want something to eat. I cant imagine

people just saying one, two or three word queries in public without looking silly. So they will

talk as they do with other people.

Mobile grows Mobile search has grown at a very high rate. Some pundits suggest that more

than 1/5 of all searches will be conducted via mobile devices.


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Performance over the Last Five Years

In the last five years, they have reached some important milestones:

Opened search infrastructure and index to outside developers with BOSS.

Opened search results page to outside innovation with SearchMonkey.

Launched Search Assist, still the most sophisticated query assistance technology on the Web.

Launched a suite of mobile search products including Yahoo! oneSearchTM

.

Acquired, grew, and improved Delicious, a top social bookmarking tool.

Launched Site Explorer to help site owners to manage their presence on Yahoo! Search.

Protected users from potential viruses, spyware, and spam with SearchScan.

Integrated music and video players directly on the search results page.


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Yahoo! has designed a searchable directory of Internet websites. The primary target audience is

the web surfer. As they develop the technology of providing each surfer with the unique search

results desired, they have become a valuable resource to advertisers. The emphasis of

activities, acquisitions, mergers, beta testing, etc. is toward the accomplishment of better

search results for the web surfer.

Despite these efforts, the latest statistical data reveals that most surfers prefer to type in the

URL directly rather than use either Google or Yahoo!.

In a report from eMarketer: "Meanwhile, according to the Goldman, Sachs & Co.,

Nielsen/NetRatings and Harris Interactive Holiday eSpending Report, 45.2 percent of consumers

went directly to an online retailer by typing its URL, 40.5 percent said they used Google and

20.9 percent said they use Yahoo."


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SWOT Analysis- Yahoo!

Strengths

Yahoo!'s Overture is a tremendously profitable Internet advertising business. It focuses on

affiliate advertising for large advertising accounts, in the same way as Google's Adsense

programme. This is an important income stream for Yahoo!.

Yahoo! has over 350 million users of its services and solutions. This makes it a very powerful

marketing company, with a very well known brand. Some reports indicate that is it is the most

popular website in the World.

A key long-term strength is Yahoo!'s international business presence. As the Internet expands

and it is adopted by more nations the opportunities for Internet brands begin to emerge.

Yahoo! is well placed to take advantage of these opportunities with its strategic business units

in Asia, Europe and Australia.

The Yahoo! Directory is an original source of structured information. It has built over the last

decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted

before their inclusion).

Weaknesses

Differentiation is difficult for Yahoo!. Almost all of its packaged services are available from

other sources.

1. Search facilities are available on MSN and Google.

2. Free E-mail accounts are available from Hotmail (MSN) or G-Mail (Google), and many, many

others.

3. New is available from CNN or the BBC.

4. Shopping is available everywhere on the Internet. Google has Froogle.

Online advertising is a new income stream for organizations such as MSN, Yahoo! and Goggle.

Yes, today they are very, very profitable. However, as technology develops and new unforeseen

advertising media emerge, the future is uncertain for these income streams. This is a weakness

for Yahoo! and its competitors.


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Another income stream that has been key to Yahoo! is derived from its partnerships with

telecommunication providers. For example, you buy an Internet connection package from your

local telephone company, and it includes a fee-based Yahoo! package including e-mail accounts,

user support and other added value services. If ever this channel is changed or removed, the

income stream would be affected.

Opportunities

The international market is a huge opportunity for Yahoo!. Yahoo!, Microsoft and Google are

busy carving niches and taking over businesses in are around the Greater China Region. China

has over 1,200,000,000 citizens. Other economies, such as India, also offer tremendous growth

potential.

The Development of the Yahoo! Directory has potential for new business and income streams.

Two thirds of organizations in Ohmae's Triad (Europe, Japan and the USA) are Small Medium

Enterprises (SME'). SME's are potential directory advertisers.

Mobile technologies offer another opportunity for Yahoo!. Today we access the Internet using

personal computers. Tomorrow phones, televisions, personal organisers, music players and

computers will merge and morph. The mobile devices of the future will need services and

solutions. Yahoo! would be well placed to provide many of them.

Threats

The biggest threat for all web-based organization is competition. Huge profits attract

investors, innovators and entrepreneurs. Dotcom fever has not gone away, it is now more

focused on profit delivery. All of Yahoo!'s key services have competitors such as AOL, Google

and many others.

International, culture specific competitors could affect Yahoo! in the future, unless strategic

alliances are forged. China has developed its own search engines, as has India. Why should the

world use USA based companies such as Yahoo!? There needs to be a series of substantial

competitive advantages to see the business remain as an international brand. Look at what has

been learned from the global car industry, or electronics industry


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Marketing Strategies- Yahoo!

Integrating a social network

Getting people to interact more on Yahoo Implementing a social networking application Utilizing new technology such as smart-phones Add a dating profile aspect

Theme

The personal profile will be accessible and transferrable throughout the website Combine the multiple services offered (current messaging and mail system/news and sports) Create a fully integrated website

Marketing Mix

Product

Yahoo! (Yahoo) is a leading global internet businesses, which provides internetservices to individuals and businesses worldwide.

Yahoo! Home Page including My Yahoo, Yahoo Toolbar, Yahoo Local andConnected TV.

Communities & Services including Yahoo Groups, Yahoo Answers and Flickr. Search Services including Yahoo Search, Yahoo Local, Yahoo Yellow Pages, and

Yahoo Maps.

Communications Services - including Yahoo Mail, Zimbra Mail, and YahooMessenger.

Connected life - including Yahoo Mobile, Yahoo Go, Yahoo Broadcast, Yahoo DigitalHome, and Yahoo Desktop.

Audience Services including Yahoo News, Yahoo Finance, Yahoo Sports, YahooAutos, Yahoo Food, Yahoo Games, and Yahoo Health.

Major Products and Services including Yahoo Kids, Yahoo Movies, Yahoo Movies,Yahoo Music, Yahoo Personals, Yahoo Real Estate, Shine, Yahoo Shopping, Yahoo

Tech, Yahoo Travel, Yahoo Travel Yahoo! Kids and Yahoo TV.

Price

Yahoo Search employs quality-based pricing, which measures the quality of trafficcoming from its distribution partners i.e. web publishers that display your paid ads.


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Yahoo Ecommerce rates for small business range from $39.99 (starter) to $129.95(Standard) on up to $299.95 (Professional) in monthly costs.

Yahoos Build Your Own Search Service (Boss) employs a pay for what you usepricing approach rather than a one size fits all for its developers customers. The rate

is calculated by number of queries and how deep they go. Yahoo domain service prices range from the length of term, i.e. 1 year costs $9.95,

two years $19.90, 4 years $29.85 and 5 years $49.75.

Yahoo Web Hosting prices range from $9.95 per month (if the term is 1 year) to$12.95 if the term is on a monthly basis.

Place

Yahoo operates an affiliate program whereby online marketers can promote itsHosting Services, Yahoo Mail Plus, Yahoo Games, Yahoo Hot Jobs and Merchant

Solutions for commissions ranging from $10 to $90.

Yahoos online Search Marketing Distribution Network includes AllTheWeb, MSN,Info Space, Net Zero, DreamWiz, HP and AltaVista.

Promotion

Yahoo has developed a new ad campaign which uses the slogan your favorite stuffall in one place , and takes a swipe at its competitor, Google.

The Yahoo logo has remained essentially the same since its inception with colorchanges being the biggest difference over time. Its brand is rated in the top 100 by

Rate the Brands.

Yahoo has run radio and television ads comparing itself favorably over Google. Yahoo has entered into partnership with Gannett in which all of Gannetts 81 local

publishing organizations and seven of its Broadcasting Division sites will sell Yahoo!

advertising inventory as part of Gannetts local advertising solutions.

People

Carol Bartz replaced Jerry Yang as CEO. Jerry Yang, Chief Yahoo Roy Boystock, Chairman of the Non-executive Board Patti S. Hart, Director of the Non-executive Board Michael J. Callahan, General Counsel Tim Morse, Chief Financial Officer Yahoo is expanding its customer service operations to add more call center

employees who can speak more languages.

Physical Evidence

Yahoo has subsidiaries located in Singapore, Beijing, Hong Kong and India.


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The company offers localized versions of Yahoo! in Argentina, Australia, Brazil,Canada, France, Germany, Greece, Ireland, and Italy.

Yahoo News http://news.yahoo.com/ is a website that gathers up to dateinformation on business, entertainment, health and politics, etc.

Yahoo operates an online Real Estate site -http://realestate.yahoo.com/Homevalues where prospects can search home values

and recent sales in their locality.

Yahoo! Safely is an online resource located at http://safely.yahoo.com/ that catersto kids, parents, and educators which provides relevant, up-to-date strategies and

tools to help foster safer online experiences.

Yahoo! has partnered with Facebook to allow both Yahoo! and Facebook to linkaccounts, view and share updates with friends across both networks. Additionally,

people who create and share content on Yahoo! sites - including Yahoo! News,

Yahoo! Sports, Flickr, and many Yahoo! entertainment sites, such as omg!, Yahoo!TV, and Yahoo! Movies - can easily share their actions with friends back on

Facebook.

Process

Yahoo recently implemented a new Google AdWords Importing Tool that allowsadvertisers to easily take their exported Google AdWords campaigns and import

them directly into their Yahoo! Search Marketing account.

Yahoo regularly recruits out-of-the-box thinkers which increases their capability toproduce new products and services.

Yahoo has enhanced its global reach by creating more targeted advertising andcountry specific services.

Yahoo has recently bolstered its role in the online community niche by acquiringFlickr, del.icio, and Web Jay. The goal is to build internet communities that interact

and assist each other in information searches.

2008 Yahoo held a Open Hack Day during which I invited developer to experimentwith different utilities from existing Yahoo sites. The goal was to facilitate

innovation.

Yahoo seeks to use site features to achieve the sticky affect, i.e keep visitors on itssites

Yahoo uses Joint Ventures to achieve recurring income.


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Marketing Strategy of Competitor

Google Marketing Strategy

Google Inc., starting from just a smart algorithm, has developed a totally new business model,

has become in a few years the world leading search engine, has developed winning applications

as Google Earth, Google Video, Google Maps, Gmail, and is enjoying a huge success. Google,

starting from scratch, has won the challenge against a giant like Microsoft and against the

previous search engine market leaders Yahoo, Lycos, Altavista, Excite.

Google Market Capitalization

In November 2007 Google Inc. was the 5th biggest US Company, considering stock marketcapitalization. In November 2007 Google shares had topped $700.

Google stock market capitalization in Nov 2007 was $230 billion, in July 2008 was $170 billion.

By comparison in July 2008 Microsoft stock market capitalization was $240 billion, General

Electric market cap was $270 billion, Exxon stock market capitalization was $450 billion.

The key question is:

Why the Google Business Model is a winning Business Model?

The answer is a complex one, and involves more factors. It's a mix of smart decisions, excellent

marketing strategy, great advisors, highly innovative and risky business model, and great

products.

These are the key reasons why the Google Business Model won:

1. Google had - and still has - a simple, clean, clear, minimalistic user interface. no frills, just the

logo and the search box - easy and fast to load. And this was a key feature with the slow

internet connections of the early years 1999 -2001 - while Yahoo and most of the other search

engines were more like generalistic portals, full of confusion, full of useless features and uselesslinks, full of annoying banner ads, heavy and slow to load.

Google had a clear understanding on psychology of perception, and how the interaction

eye/brain works, while the bigger competitors didn't.

Bottom line is: If the user visits a search engine, what he wants to get is simply that: just a

search engine.


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A search engine which is fast and reliable: If the user wants a generality portal, he goes to a

portal, not to a search engine.

Larry Page and Sergey Brin, the Google Executives, understood this, and this was what they

delivered.

2- Google had - and has - reliable search results (not always, but most of the time). Page and

Brin's PageRank algorithm worked well.

3. Google got good advice from VC's and from Wilson Sonsini Goodrich & Rosati. Larry Page and

Sergey Brin have been advised and assisted since the beginning by John Doerr, VC Partner of

Kleiner Perkins and by Wilson Sonsini Goodrich & Rosati, the leading law firm of Silicon Valley.

4. Google introduced a smart, innovative and quite risky business model - Adwords - and the

pay per click concept. The risk proved winning, and the innovative business model worked. Still

today Adwords is the main source of revenues of Google Inc.

5. In the following years, Google became a powerhouse with an impressive pipeline of new

great products - Google Maps, Google Earth, Google Video, Gmail. And slim revenues.

6. Google worked very hard on Brand Building. It seems that brand building was much more

important to them than just revenues and profits. The strategy worked. And it was a key asset

in the subsequent IPO at the Nasdaq.

7. Google was an innovator of the Business Model. Google delivered all these great new

products basically for free, enticing and luring million of users worldwide, with the result ofbuilding the Brand in an outstanding, quite unbelievable way - and did it so fast.

Eric Schmidt was made CEO of the company, David Drummond, an attorney of Wilson Sonsini

Goodrich & Rosati who had advised Google founders since the early days, joined Google as

Chief Legal Officer, Wilson Sonsini Goodrich & Rosati took care of the IPO at Nasdaq.

At the IPO in August 2004 Google share price was set at $85, which according to many financial

analysts seemed excessive and unreasonable. In Nov. 2007 Google shares had topped $700

which was an excellent return for Google shareholders.

Google Chrome Browser:

In September 2008 Google launched its new browser, named Google Chrome. Google Chrome

enters the browser competition challenging Microsoft Internet Explorer, which has the 73% of

the browser marketshare, Firefox, which has 19%, and Apple Safari, with 6% of the browser

market. Under the marketing point of view it's a risky move on the side of Google. If Google

Chrome is not going to be definitely superior to Firefox it could undermine Google brand value.


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Positives and Negatives of Strategies

Yahoo News is the No. 1 news and information site in the country, with more than 50million monthly unique readers, ahead of The New York Times networks 45 million.

Yahoo Finance has more than 20 million monthly unique readers, well ahead of AOLMoneys 14 million.

Yahoo Sports beats the competition with almost 25 million monthly users. ESPN is No. 2with 21 million.

Yahoos OMG! Entertainment page scored more than double the traffic more than 20million monthly unique users of its nearest competitor, AOLs TMZ, in May. TMZ had

just shy of 10 million visitors.

Yahoo Games is in a near tie with EA Online, though it has strong tie-ins to EAs videogame franchises like the Sims 3. Both companies had more than 19 million unique

visitors in June, with Nickelodeon Casual Games a more direct Yahoo Games

competitor logging 17.5 million unique visitors.

Yahoo Mail demolishes the competition, grabbing two-thirds of the total webmailmarket with 103 million unique visitors. Hotmail had almost 48 million, with AOL and

Google lagging behind with 38 million and 36 million visitors, respectively.

Flickr, Answers, Music, TV and Movies also do very well in their categories.


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If Yahoo is in some kind of a problem today, it's because they have tried to wear other

people's clothes that were mostly falling down their ankles. Yahoo wanted to be many things,

from Media Company to Myspace. Lack of focus and direction made them languish.

It still has the power and tools to comeback. It's time they focus on new technology users, who

understand the value much before the mainstream markets. Just to provide an interesting data

point, Twitter has enjoyed exponential growth in India, with more than half of Twitter users

(57%) having signed up in the past year alone. These users are young and early adopters of

technology.

It's time Yahoo starts knocking their elite technology research group for help and get tangible.

Google on other hand has worked towards being a knowledge-based company and not just

search. They have created a strong intellectual ecosystem both inside and outside, which can

create a lot of meaningful stuff, keeping people in the center. This does not mean they have not

done anything wrong or failed, but they have a permission-to-fail policy.

Now Yahoo needs to be thinking outside in, as users are confused with My Yahoo! and Front

Page. "Where should I be? How should I manage them? If it's all about collecting (mail, message

and media) a lot of stuff across the web that I value, shouldn't I be seeing them in one place

with my friends?" This is one question that needs to be solved.

Yahoo appears to have been lost for the past year or two. Having lost ground in the web search

arena, it has struggled in the wilderness, not fully sure where to go next or the best way to raise

revenue. The latest news suggesting Yahoo is on the verge of being bought has elevated share

prices nonetheless in case the acquisition plan does not proceed, just what will come to be of

the previously dominating Internet giant? Yahoo at this point has a tiny proportion of searches

done online.

Google is definitely the undisputed search engine utilized by millions of users. In an industry

which was once somewhat over loaded, net users have been left with a small number of

dedicated search engines. Apart from Google and Yahoo there is currently Bing (Microsoft's

latest contribution), Ask and AOL. Search engines from yesteryear now gather dust. The fact is,

Bing and Yahoo's merged market share is nonetheless dwarfed by Google.

Nonetheless, this is simply the tip of the iceberg to Yahoo's problems. Yahoo used to be

dominant on an Internet where no one worked like Google. Google's search engine potency

relies on the fact it is focused on simplicity. Google simply does search engines, and it does

search very nicely. It additionally provides numerous additional services but yet the search

result pages do not get cluttered with it.


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Yahoo continues to adopt a portal website design similar to lots of its contemporaries that have

dropped by the way side. Customers now prefer simplified designs and layouts. Having said

that, this isn't to say that people want less functionality. As Google has already proven, there is

a huge demand from customers regarding a lot of diverse applications from galleries, email,news and so on. But most importantly precisely what Google has excelled at is delivering

multiple functions but staying straightforward.

This isn't to say that Yahoo is about to shut down. Levels of competition benefits business and

as long as Yahoo is involved in the search field then it will continue to be used. What Yahoo

needs to do is reassess its business focus. It may well discover that it needs to seriously

reposition itself in the market to stay relevant. It could chase the sought after social network

sector, although it may possibly be far too difficult to trump Facebook. Rather, Yahoo may wish

to develop a brand new niche area.

Rethinking it as an application with a lot of different features might possibly be being the

solution. Yahoo could easily provide social bookmarking (to save all your favorites online) and a

piece of password software (to store passwords). Combined with its My Yahoo website and

search engine features, it would definitely cement itself as an online utility and deliver users

features not offered by some other sites. These might be the functions that Yahoo requires to

climb from the ashes.

However, let us look at the reasons why Yahoo! is failing today and what can be done in the

near future.

Profitable: Unlike Microsoft, Yahoo! actually makes a profit through its online services. They

need to make their investors aware of the same,

The Strong Number Two: Unlike Microsoft, Yahoo has actually been a competitor to Google in

search, from the very beginning of search engines. Yahoo has twice the search share in the US

than Microsoft.

Yahoo! has still largely maintained a steady amount of raw searches. Googles share is

increasing because Google is picking up new search activity seemingly from other channels and

sources and not from other search engines.


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Properties: Yahoo has fantastic properties. Time magazine awarded Yahoo two of the 10 picks

for its "10 Essential Sites" special feature. Yahoo Finance and Flickr both are highly grossing

websites..

Time adds that Delicious, Yahoo! Answers, Yahoo Mail, Yahoo News and Yahoo Search, all are

either the leaders or strong players in their categories.

Brand Value: Yahoo has a brand. Unlike other search engines, Yahoo! doesnt need to fix the

brand. Its well known and still drawing consumers.

Interestingly, despite all the problems with Yahoos management and investor woes, theres

been no indication that consumers giving it a toss. Maybe they do, but if so, I havent seen a

single opinion poll on the topic. Yahoo has not lost a huge amount of traffic.

So the question that arises is where is Yahoo! going wrong?

Google as super success Microsoft Bing Leadership

Google as Super Success

One of the problems Yahoo! faces is that Google being the market leader is drawing all

audiences towards itself and even though it is the number two company it is under constant

pressure from Bing.

Microsoft Bing

The other major problem is the constant pressure from Bing. With Chrome browsers supporting

Google as the default engine and with internet explorer having Bing as their default engine it is

difficult for Yahoo! to put in its own search engine.

Leadership

Yahoo has had four Chiefs in the last four years. This challenges the Stability of the

organization.


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Directions the company's marketing strategy should take in the near future

The directions are simple, Yahoo! needs to adopt these and they will be able to sustain the growth they

desire:

Value Creation happens when customers use a product because it meets their needs betterthan the competitions. An example is Netscapes Web browser.

Value Capture is when a products price exceeds its makers costs to design, produce, sell andship it. Since Netscape gave away its browser for free, it succeeded in creating value but failed

at capturing it.

Value Renewal occurs (rarely) when a company adapts to new technology, changing customerneeds, and upstart competitors. Steve Jobs renewed Apples (AAPL) value brilliantly startingwith 2001s iPod introduction and kept doing so with iTunes, the iPhone and the iPad.

The New York Times pointed out, Yahoo! was good at getting people to shift their news

consumption from paper to the Web. But when people moved to mobile and social network

news, Yahoo decided to become media companies. Meanwhile, Google and Facebook

developed systems to help people consume news on the new platforms.

In concept the news business is pretty simple: you give away content to readers and then sell

access to those readers to companies that want to sell products to them through advertising. In

order to survive, a news provider must become a life support system for its advertising sales

force.

But Yahoo failed to create one. In order to do that, they would have needed to renew the value

they create for advertisers and consumers. But they did not. For example, due in part to its

poor advertising technology, Yahoo was not the best place for great ad sales people to work so

they left. That meant that every few months, ad agencies had to teach a new Yahoo executive

about their accounts.

In short, Yahoo! needs to consolidate on its number two position and beat the competition it is

receiving from Bing. Then it needs to get into the social networking domain and fight off

competition from Facebook and put pressure on Google+.


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Yahoo Ryan Pereira

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