Reviving Yahoo! - Strategies that Turned Around the Leading Internet Portal|Business Strategy|Case Study|Case Studies

Reviving Yahoo! - Strategies that Turned Around the Leading Internet Portal

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Case Details:

Case Code : BSTR064
Case Length : 13 Pages
Period : 2001 - 2003
Organization : Yahoo
Pub Date : 2003
Teaching Note :Not Available
Countries : Japan
Industry : IT

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Yahoo was founded by Jerry Yang (Yang) and David Filo (Filo), who began exploring the Internet as a hobby after finishing their doctoral thesis in electrical engineering from Stanford University.

In April 1994, they created a directory to keep track of their personal interests on the Internet. Gradually, they began to spend more and more time on their directory. Later, Yang and Filo started categorizing websites as a way to keep track of all the sites they had visited. They posted this list on the web as "Jerry and David's Guide to the Worldwide Web." The guide became very popular and became the first choice of people browsing the web to find sites intelligently. It helped people to discover useful, interesting and entertaining content on the Internet. In late 1994, the duo changed the name of the guide to Yahoo,3 positioning it as a customized database designed to serve different users. They developed customized software to help locate, identify and edit material stored on the Internet.

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Yahoo rapidly became popular and attracted a lot of media attention. Yahoo was formally incorporated in March 1995 and by mid-1995, it had implemented a business plan modeled on traditional broadcast media companies.

During the same year, Yahoo strengthened its management team by appointing Timothy A. Koogle (Koogle) as the CEO. Koogle was an engineering graduate from Stanford University and had spent nine years in Motorola before joining Yahoo. Yahoo was the first company to set up an online navigational guide on the Internet. It offered media content, communication, personalized information and commerce services on its website (Refer Exhibit IV). Yahoo generated its revenues mainly through online advertisements, primarily banner ads4 and ad placement fees, promotions,5 sponsorships, direct marketing6 and merchandising. Yahoo also generated revenues from monthly hosting fees and commission on online sales from its merchant partners...

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3] Yahoo! is the abbreviation for Yet another Hierarchical Officious Oracle.

4] Banner advertisements appear on web pages within various Yahoo channels. Hypertext links were embedded in each banner advertisement to give users instant access to the advertiser's website, to obtain additional information, or to purchase products and services.

5] Promotional sponsorships were typically focussed on a particular event, such as sweepstakes. The merchant sponsorship icon advertised products. Users had to click on the icon to complete a transaction.

6] Direct marketing revenues came through e-mail campaigns targeted at Yahoo's registered users who had indicated their willingness to receive such promotions.


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