2002. MBA class, e-commerce. Our presentation on Yahoo... e-commerce is in my blood!

1. DDOO
YYOOUU
??

2. CCoonntteenntt DDiirreeccttoorryy
History
What is Yahoo? , History , Team ,
Strategic Changes ...
Yahoo! Today
Services , Competitors , Business Model
Industry Attractiveness
5 FORCES , Advantages , Network Value
Strategic Challenges
Competition , Industry , Strategic Fit ...
Strategic Choices
Advertising Engine , Merger , Media-
Content Provider , SMB’s Engine ...
Questions and Answers
Submit your Questions …
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3. WWhhaatt iiss YYaahhoooo??
The name of a race of brutish
creatures resembling men in
Jonathan Swift's Gulliver's
Travels.

4. WWhhaatt iiss YYaahhoooo??
 Internet portal with 237 mln. visitors
 70% reach in the US
 25 international sites in 13 languages
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5. TTiimmeelliinnee
Yahoo! stock reaches its
maximum $250
Tim Koogle
joins Yahoo!
Yahoo! gets funding
from Softbank
9 mln. Websites in Yahoo! directory
Geocities
Yahoo! Expands
internationally
Terry Semel
appointed CEO
Yahoo! stock
plunges to $10
1994 1995 1996 1997 1998 1999 2000 2001 2002

6. RRiissee aanndd FFaallll
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7. MMaannaaggeemmeenntt CChhaannggee
Jerry Yang Tim Koogle
& David Filo Terry Semel
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8. SSttrraatteeggiicc CChhaannggeess
Aggressive cost-cutting
reshaping 44 business units into 6 , 12% of workforce laid off
Conversion to paid listings and services
Sale of premium listings to Overture , Yahoo! Business Listings, Mail
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9. SSttrraatteeggiicc CChhaannggeess
More non-advertising revenues
Movies on Demand , Small business hosting , Games , Music
& movie downloads
Partnerships & Acquisitions:
GeoSities, equity stake in Google, HotJobs, Yahoo!Music, SBC
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10. Paid Space on Screen Real Estate: 9%
Methodology – Jakob Nielsen, Nielsen Norman Group

11. 
Paid Space on Screen Real Estate: 54%
Methodology – Jakob Nielsen, Nielsen Norman Group

12. PPrrooffiittss UUpp AAggaaiinn
Yahoo! Profits in 1998-2002
80
60
40
20
0
-20
-40
-60
-80
-100
-120
1998 1999 2000 2001 2002
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3366,,66 mmiill

13. TTooddaayy
 Internet portal with 237 mln. visitors
 70% reach in the US
 25 international sites in 13 languages
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14. TTooddaayy
 $ 1,5 billion cash reserves
 $ 36,6 mln. profit by the end of 3rd Q 2002 (not
counting HotJobs)
 Stock $ 14.3 as of Oct 28.
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15. TTooddaayy
Strategic Acquisitions
VivaSmart
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16. SSeerrvviicceess
Services > Commerce

17. SSeerrvviicceess
Services > Communication

18. SSeerrvviicceess
Services > Information

19. SSeerrvviicceess
Services > Listings

20. SSeerrvviicceess
Services > Media

21. SSeerrvviicceess
Services > Other

22. PPoorrttaall BBuussiinneessss MMooddeell
More Yahoo!
Advertisers
Banner Ads, Sponsorships,
Paid listings, visitor
information
Catalog Merchants
Transaction fees,
Search Technology
Google, Inctomi,
Overture, ODP, etc.
Buy Add Value Sell

23. YYaahhoooo!! BBuussiinneessss MMooddeell
Search Technology
Teoma, Inctomi,
Overture, Divine
Broadband
SBC
237 mil. users per month
70 percent reach in the U.S.
44 services
Advertisers
Banner Ads, Sponsorships,
Paid listings, visitor info
E-businesses
Transaction fees,Web
hosting , e-marketing fees,
portals, ASP, document
search service
Gamers
Game rent commissions
Entertainment
Games on Demand,
Internet users
Dial-up and DSL fees
Buy Add Value Sell

24. CCoommppeettiittoorrss
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25. SSttrraatteeggyy -- NNeettwwoorrkk VVaalluuee
eeBBaayy
YYaahhoooo!!
DDiissccoovveerryy
Implications:
Yahoo! should maintain visitor growth to attract more advertising
profits, yet the value of the Yahoo! Network is ffiinniittee..

26. SSttrraatteeggyy -- 55 FFoorrcceess iinn PPoorrttaall IInndduussttrryy
Suppliers - WEAK
Users, website
owners, web
databases, ISP
Buyers - STRONG
Advertisers, e-businesses,
internet
users
New Entrants - STRONG
Web Databases, Vertical Portals
Competitors
Search Engines, Media Portals
Substitutes - STRONG
Search Engines , Meta-Crawlers , Independent
Web Directories, pay-per-click engines

27. SSttrraatteeggyy -- CCoommppeettiittiivvee AAddvvaannttaaggeess
Largest Human-Compiled Web Directory
Most relevant web searches from Teoma-Google
Independent On-line Entertainment On-Demand Partner
No studio affiliations like Netscape and Google
No technology-control like MSN
Hollywood connections
Brand Image
Synonymous to Internet in the rest of the world. Must-be
online advertising item.
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28. SSttrraatteeggiicc CChhaalllleennggeess
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Undefined Strategy
No defined strategic niche.

29. SSttrraatteeggiicc CChhaalllleennggeess
Undefined Strategy
No defined strategic niche.
Increased Competition among Portals for paid services
Google leading in search technology and audience
Pay-per-click listings prevail
Consolidation of portals with media & telecom companies (AOL-Time
Warner, Microsoft, Bertelsmann)
Forward integration of search technology providers
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30. SSttrraatteeggiicc CChhaalllleennggeess
Undefined Strategy
No defined strategic niche.
Increased Competition among Portals for paid services
Google leading in search technology and audience
Pay-per-click listings prevail
Consolidation of portals with media & telecom companies (AOL-Time
Warner, Microsoft, Bertelsmann)
Forward integration of search technology providers
Limited business model potential
Very vulnerable to loss of critical mass of users, because of
Metcalfe model
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31. SSttrraatteeggiicc CChhaalllleennggeess
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Undefined Strategy
Increased Competition among Portals for paid services
Limited business model potential

32. SSttrraatteeggiicc OOppttiioonnss
p2p auction portal
Auction model like eBay
p2p music download portal
underground music&downloads like late Napster (Mike’s and Stef’s idea)

33. SSttrraatteeggiicc OOppttiioonnss
World Portal
Largest independent info-mediary
Independent Media Portal
Hollywood’s favorite on-line partner
Small Business Support Portal
Largest independent info-mediary

34. WWoorrlldd PPoorrttaall
pprroo contra
+ Leveraged by brand
image
+ Core competency
+ International expansion
+ Affiliation with Google
- Heavy dependence on
advertising revenues
- Heavy competition
- Finite growth potential
and network value
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35. GGrroouupp ppoorrttaall -- AAuuccttiioonnss
pprroo contra
+ Infinite network value
+ Yahoo! has “critical
mass” of users for effective
start
+ High revenue potential
from transactions
+ Acquired e-payment
technology from Arthas
- Yahoo! Auctions failed to
compete with eBay
- Core competency not in
paid group ware services
- Strong competition (eBay
and AOL)
More Yahoo!

36. GGrroouupp ppoorrttaall –– mmuussiicc ddoowwnnllooaaddss
pprroo contra
+ Infinitely leverageable
network value
+ First-mover advantage
+ Management connections
with Hollywood
+ Entertainment industry’s
largest star* test-market
+ Image of worldwide
independent and
entrepreneurial brand
- Long pay-off time
- Risky revenue model
More Yahoo!

37. MMeeddiiaa && GGaammee PPoorrttaall
pprroo contra
+ CEO’s Hollywood
connections
+ Independent portal
+ Broadband capability
+ Revenue model less
affected by economic
downturn
- Paying Audience limited
to broadband Internet users
- Large dependence on
advertising
- Finite network value
potential
- Competition from AOL-Time
More Yahoo!
Warner

38. SSmmaallll BBuussiinneesssseess PPoorrttaall
pprroo contra
+ Small Businesses moving
on-line
+ Cost advantage for e-marketing
More Yahoo!
solutions
+ Affiliation with Google
+ Experience (Yahoo!
Shops, Geocities)
- Direct competition
(Microsoft bCentral)
- Forward integration from
search providers (Google
and Overture)
- Not core competence in
marketplace services

39. FFuuttuurree??
MMeeddiiaa ppoorrttaall ++
IInnffoo--mmeeddiiaarryy ++
SSmmaallll BBuussiinneesssseess PPoorrttaall
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40. HHooww ttoo SSuubbmmiitt YYoouurr QQuueessttiioonnss
We ask that you follow three simple, yet important steps if you have a
question you'd like to suggest:
Step 1: Check to See if Your Question Has Been Already Answered
by Yahoo! Presentation. An important first step, because if your
question is already asked, you need go no further.
Step 2: Find the Appropriate Question Category in Yahoo!
Presentation
Step 3: Submit the Appropriate Question. Do this simply by asking
Vartan or Yana after presentation.
Finally, thanks for your attention and questions .
Always More Yahoo!