Case Report

on
Yahoo! Inc. - 2009
Prepared by:
Ancheta, Abigail M.
Rueco, Reia Doreen M.

Title

Page
Table of Contents
Introduction
Environmental Analysis
Problem Definition
Alternative Courses of Action
Chosen Alternative and
implementation
Summary of Analysis
References
Technical Appendices

Introduction

YAHOO
-"Yet Another Hierarchically Organized
Oracle
Yahoos Vision & Mission Statement

General Worksheet for Analyzing Current Situation

Environment

Relevant Issues

Case
Impact

Case
importance

Consumers spend
more and more of
their time online

Positive

Yahoo! Inc.
needs to take
advantage of
this growing
market

Consumers
negative attitude
towards online
advertising

Negativ
e

Changing
preferences of
users

Negativ
e

General
Environment
Social

Potential
decrease in
revenues from
Advertising
Yahoo needs to
provide
continuous
innovations and
upgraded
features that
could maintain
and attract

General Worksheet for Analyzing Current Situation

Environment

Relevant Issues

Case
Impact

Case
importance

Consumers spend
more and more of
their time online

Positive

Yahoo! Inc.
needs to take
advantage of
this growing
market

Consumers
negative attitude
towards online
advertising

Negativ
e

Changing
preferences of
users

Negativ
e

General
Environment
Social

Potential
decrease in
revenues from
Advertising
Yahoo needs to
provide
continuous
innovations and
upgraded
features that
could maintain
and attract

General Worksheet for Analyzing Current Situation

Environmen Relevant Issues
t

Case
Impact

Case
importance

Positive
and
Negative

The success of
Yahoo is
dependent on
how much
consumers are
willing to spend
on the internet

Negative

Content
Providers may
not offer their
content to
Yahoo on terms
agreeable to
them

General
Environment
Economic

Cyclical
Expenditures of
Yahoos
advertisers

Increase in
Consumer Price

Negative
Increase in
Interest Rates

It will affect
Yahoos much
needed

General Worksheet for Analyzing Current Situation

Environment

Relevant
Issues

Case
Impac
t

Privacy
Regulation
legislated by
the congress

Negati
ve

Case
importance

General
Environment
Political & Legal

Flexible
Access Rules
for users.

The ability to
reach/attract a
large
market/audienc
e with low
barriers to entry
would be
Positive difficult.
There would be
an increase of
percentage in
the users
patronizing the
Negati website.
ve

Because of the
easy access of
users, Yahoo could

General Worksheet for Analyzing Current Situation

Environment

Relevant
Issues

Case
Impact

Case importance

Advanceme
nt in
technology

Positive It can affect the

and
competitive position
Negative and market share of
Yahoo depending on
how well it adapts
to the development
of the internet

Specialized
marketing

Positive

General
Environment
Technological

Segmenting
distinctive market
into individual group
enables Yahoo to
target the segment
with customized
marketing service to
the specific market.

General Worksheet for Analyzing Current Situation

Environmen Relevant
t
Issues

Case
Impac
t

Case importance

International
Culture (China
and India have
developed their
own search
engines)

Negati
ve

There needs to be
a series of
substantial
competitive
advantages for
Yahoo to remain as
International brand.

Changing
Country
requirements

Negati
ve

Operating
Environment
International

Requirements
concerning
technological
sharing, copyrights,
etc varies upon the
country or area.
Therefore
expenditures and

General Worksheet for Analyzing Current Situation

Environmen Relevant
t
Issues

Case
Impact

Case importance

Strong and
talented labor
force

Positive

Could be able to
establish a good
relationship among
their users
because of the
positive feedback.

Wide array of
services

Negative

Operating
Environment
Suppliers &
Labor

Too many areas

covered by Yahoo
would it hard for
them to take a
look to every
detail their users
are into.

General Worksheet for Analyzing Current Situation

Environment

Relevant Issues

Case
Impact

Case
importan
ce

Operating
Environment
Competition

Google search
engine is more
preferred by the
majority of users
Social Networking
Websites are now
breaking into
Advertising Market
Websites are
increasing in quality
and ease for all
users

Negative

Advertising
revenues
are failing
and
customer
loyalty
decreases

General Worksheet for Analyzing Current Situation

Environmen Relevant
t
Issues

Case
Impact

Case importance

Operating
Environment
Customers

Specific
Positive
Products offered
by yahoo to
specific target
markets

Positive
Expanded
customer base
by offering
services up to
45 languages

Yahoo! Finance are

preferred by people
involved in
corporate activities,
investors, company
stakeholders, etc.
Another is Yahoo!
Answers appeals
more for students
engaged in
academic activities
Most consumers
prefer to use
internet by their
native languages;
hence the service is
more attractive for
them

General Worksheet for Analyzing Current Situation

Environment

Relevant
Issues

Case
Impact

Case
importance

Internal
Environment
Organizational

Partnerships
Positive
with
and
telecommunica Negative
tion providers

Partnerships
with MLB,
VISA,NFL and
Microsoft

Positive

Positive
Purchasing of
Flickr

A fee-based
yahoo package
is included but if
the telephone
company is
changed/remove
d, income
stream is
affected
Larger market
and strategic
revenue earning
resources and
opportunities
along with image
branding
New means of

General Worksheet for Analyzing Current Situation

Environm Relevant
ent
Issues

Case
Impact

Case importance

Internal
Environme
nt
Marketing
Broadband
expansion

More hours spent in the

internet = potential
growth in sales

Strong brand
recognition

Increased consumer
confidence over Yahoo!s
services
Positive

Mobile Market
Domination

Promotion of searches
and services
Additional Source of
Revenue/Income

General Worksheet for Analyzing Current Situation

Environ
ment

Relevant
Issues

Case
Impact

Case importance

Internal
Environ
ment
Marketin Differentiatio
g
n is difficult for
Yahoo
Yahoo felt
contented on
their search
engine
product and
expanded into
other areas
Adoption of
Contextual
Advertising

Use of
alternatives(customers tend
to shift from using services
offered by Yahoo!)

Negativ
e

Users are dissatisfied which

causes them to look for a
better search engine that
would yield them relevant
results
The program is still in beta
and has not made any
headway at attracting new
publishers/advertisers.

General Worksheet for Analyzing Current Situation

Environment

Relevant
Issues

Case
Impact

Case importance

Internal
Environment
Financial

Increase in R Positive
and D
expenses
Decreasing
Net income
Increased
Liabilities

More innovations put

Yahoo at a
competitive
advantage

Negativ
e

Negativ
e

these issues left

stockholders at a
disadvantage

General Worksheet For Defining Problems and

their Core Elements
MAJOR PROBLEM OR ISSUE
Description of problem or issue:
Yahoo's search engine was considered as their minor concern and
expanded into other areas

Evidence that this is a major problem or issue:

1. Facts
a. Yahoo focused supreme effort in the realm of content (Yahoo
sees their core business as being Yahoo News, Finance and
Mail. )
b. Yahoo focused on direct revenue generating streams like
private advertising deals and partnerships. (They have made
acquisitions such as MyBloglog and Flickr)
c. Yahoo failed to update their search product which resulted to
a flawed engine. The primary disconnect in the yahoo model of
search engine has been the lack of precision (cluttered,

General Worksheet For Defining Problems and their Core

Elements
MAJOR PROBLEM OR ISSUE

Evidence that this is a major problem or issue:

2. Symptoms or other effects of the problem
a. Diminishing User base - Users tend to shift to other search
engines device for reliable and relevant reports
c. Advertising Rates are falling - Through contextual advertising,
advertisements which are displayed on yahoo's search result
sites are not cohesive with the content provided so
advertisers and web publishers are discouraged to put up their
advertisements via yahoo.

General Worksheet For Defining Problems and

their Core Elements
MAJOR PROBLEM OR ISSUE

Evidence that this is a major problem or issue:

3. Opinions
. Focused on delivering more portal pages and additional
sections to their websites resulted to high percentage of
uninterested users in visiting Yahoos website. Too feature
laden website makes users annoyed and irritated hence leaving
Yahoo.

General Worksheet For Defining Problems and their Core

Elements
MAJOR PROBLEM OR ISSUE
Evidence that this is a major problem or issue:
4. Assumptions
. Due to the expansion of Yahoo to other areas, direction and
focus was no longer obtained because of the broader scope
which is harder to monitor and control.

General Worksheet for Evaluating Alternative Courses of Action

Alternative 1
Description of Alternative:
By implementing the functional strategy, Yahoo will
move forward with one core competency, which is search
Strengths of Alternative:
Regaining Users Confidence over Yahoos products/Services
Refocusing the business in the most profitable way possible
Ensuring that the achievement of stronger and lasting position
in the market is not compromised by its short-term survival
means
Weaknesses of Alternative:
The relaunch of better search engine is a difficult and
painstaking process
Restructuring the foundation of yahoos core mission would
cause a lot of sacrifices for some of its segments that generate
direct revenue

General Worksheet for Evaluating Alternative Courses of Action

Alternative 1
Overall evaluation of Alternative:
Giving focus to a one-core competency gives Yahoo an
edge in establishing user's satisfactions therefore
bringing back itself to the limelight, while this strategy
may seem very difficult to pull off, having a good base
(which is the refined search engine) to establish an
advertising network is necessary for Yahoo to go
forward for growth.

General Worksheet for Implementing the Chosen

Alternative
1. What should be done to implement the chosen
alternative effectively?
Specific recommendation:
-Conduction of research & development
Justification:
-This is to keep track on the developing techniques on how to
improve and achieve the refinement needed for the search
engine.
2. Who should be responsible in implementing the chosen
alternative?
Specific recommendation:
-The responsibility will always be from top to bottom
specially for large companies like Yahoo! Inc.
Justification:
-To facilitate better control over the implementation of
the alternative.

General Worksheet for Implementing the Chosen

Alternative
3. When and where should the chosen alternative be
implemented?
Specific recommendation: ASAP

4. How should the chosen alternative be implemented?

Specific recommendation:
- Refocus investments on Research and Development.

SUMMARY OF ANALYSIS

Yahoo must've considered their search engine device as

their primary concern in order to develop a good relation
with that of their users which could be their potential
clients.
Yahoo needs to refocus on what their users are there forsearch. It isn't Yahoo Finance, autos or groups, it is search.
Plain and simple. Clean up the search results and the rest
can be harnessed from that.
Yahoo's main revenue source is advertising. If Yahoo
couldn't do anything about it's search engine, user base will
continue to diminish, advertisers will shift to other
competitors so the revenue will keep on a downward trend.
Stockholders would be dissatisfied, and in the near future,
Yahoo might not be able to operate on its own and would
possibly end up to divestment.
Yahoo operates in the Internet products, services and
content markets, which are characterized by rapid change,
converging technologies and increasing competition.
Operating different areas is not the main problem of Yahoo
for it also serve as its competitive advantage over the