Yahoo corporation case

EXECUTIVE SUMMARY

Yahoo! Inc., one of the largest internet companies in the world, is present in 60 countries and available in 45 languages.

Yahoo offers a diversified range of internet services and content, from e-mail and search to media streaming, downloads and advertising. It is a very strong brand, with more than 700 million people generating traffic on Yahoo properties monthly.

Yahoo’s core competencies: search capabilities and digital (display and search) advertising. Yahoo obtains revenues from marketing services sold to advertisers. Additionally, Yahoo charges fees for a range of premium services.

The external environment is highly competitive (Google and Facebook being the leaders), with a low barriers to entry market and high threat of substitutes. Consumers bargaining power is high, many consumer changing habits and spending behavior.

Yahoo faces a new era – of social networking (Facebook exceeded 1 billion users in 2012) and mobile internet, consumers spending valuable time on the former and accessing internet for any purpose (check e-mail, communicate, obtain information, buy products and services, leisure) through smart phones and tablets.

In the past years, Yahoo lost its competitive advantage - digital advertising franchising – driving worsening financial position.

New opportunities exist, threats are obvious (Google and Facebook continuously eat-up Yahoo’s market share), strengths can be capitalized, weakness must be improved and all in all Yahoo needs to rethink its strategic advantages and make the best course of action for future competitiveness position improvement.

The proposed strategy suggests Yahoo to address the high growth “mobile” market, both in terms of applications (technology) and increasing advertising spent (media).

1. EXISTING VISION, MISSION, OBJECTIVES AND STRATEGIES

“Yahoo! is the premier digital media company. Yahoo! creates deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. That's how we deliver your world, your way. And Yahoo!'s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses.”

In the past 5 years, Yahoo’s top management changed 4 times and that made it difficult for the organization to focus on clear objectives and strategies. Yahoo has been unable to decide whether to be a media or a technology company. No clear objectives were set and the company didn’t optimize for any one. For example, until recently, one of the technology assets, Flickr, was abandoned and even set for closing. Former top player in the digital media market, Yahoo is now lagging behind strong competitors like Google and Facebook.

According to Yahoo’s new CEO Marissa Mayer, “there's a real opportunity to help guide people's daily habits in terms of what content they read. That is something that we are really working on. All of these daily habits - news, sports, games, finance, search, mail, answers, groups - these are all things we have been under-invested in. A little love will go a long way." This means to refocus R&D inside the core Yahoo’s platforms, to consolidate then and shut down loss making properties and accelerate the deployment of new technologies to take opportunities of economies of scales and flexibility.

But the world out there is going mobile and Yahoo doesn’t have mobile hardware or operating system, a browser or a social network. The CEO believes the strategy to adopt is to partnership with Apple and Google in terms of the operating system and with Facebook, in terms of social network. Strong partnerships should enable content personalization for every consumer and advertising campaign, offer the best services to cover mobile devices, power real social relationships and build a digital media ecosystem.

The question for Yahoo is whether it can remain relevant with larger and more powerful companies seeking to do some or all of what Yahoo has historically done.

2. NEW DEVELOPED VISION AND MISSION

Our vision is to build the virtual place for all people to re-visit every day as they will enjoy the best experiences that we will bring through constant innovation and modern technology.

Yahoo’s mission is to be the first choice for everyone all around the world, looking for news, e-mail, fast and relevant search content, leisure and even purchasing goods, either using a desktop or a smartphone or a tablet. We are here for marketers to offer the best advertising solutions. Our employees represent our main assets, their continuous training enabling world-class expertize, to offer our customers the best experiences and the best quality services and to us the growth and the profits needed to reward our shareholders. It is our goal to continuously strive meeting the needs of our customers, by encouraging the best ideas to emerge and continuously seeking for innovation and required technologies development. Yahoo is the place where business practices follow the strongest moral principles and Yahoo is aiming to contribute to society economic strengthening, acting as a good corporate citizen in all countries we do business.