DO DO YOU YOU

??

Content DirectoryContent Directory

HistoryWhat is Yahoo? , History , Team , Strategic Changes ...

Yahoo! TodayServices , Competitors , Business Model

Industry Attractiveness5 FORCES , Advantages , Network Value

Strategic ChallengesCompetition , Industry , Strategic Fit ...

Strategic ChoicesAdvertising Engine , Merger , Media-Content Provider , SMB’s Engine ...

Questions and AnswersSubmit your Questions …

More Yahoo!

What is Yahoo?What is Yahoo?

The name of a race of brutish creatures resembling men in Jonathan Swift's Gulliver's Travels.

What is Yahoo?What is Yahoo?

Internet portal with 237 mln. visitors

70% reach in the US

25 international sites in 13 languages

More Yahoo!

TimelineTimeline

Yah

oo!

stoc

k re

ache

s it

s m

axim

um

$25

0

1994 1995 1996 1997 1998 1999 2000 2001 2002

Tim

Koo

gle

join

s Y

ahoo

!

Yah

oo!

gets

fun

ding

fr

om S

oftb

ank

9 m

ln. W

ebsi

tes

in Y

ahoo

! di

rect

ory

Geo

citi

es

Yah

oo!

Exp

ands

in

tern

atio

nall

y

Ter

ry S

emel

ap

poin

ted

CE

O

Yah

oo!

stoc

k pl

ung

es t

o $1

0

More Yahoo!

Rise and FallRise and Fall

Management Management ChangeChange

Tim KoogleJerry Yang & David Filo Terry Semel

More Yahoo!

Strategic ChangesStrategic Changes

More Yahoo!

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

Strategic ChangesStrategic Changes

More Yahoo!

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

Paid Space on Screen Real Estate: 9%

Methodology – Jakob Nielsen, Nielsen Norman Group

Paid Space on Screen Real Estate: 54%

Methodology – Jakob Nielsen, Nielsen Norman Group

Profits Profits UpUp Again Again

Yahoo! Profits in 1998-2002

-120

-100

-80

-60

-40

-20

0

20

40

60

80

1998 1999 2000 2001 2002

More Yahoo!

36,6 mil36,6 mil

TodayToday

Internet portal with 237 mln. visitors

70% reach in the US

25 international sites in 13 languages

More Yahoo!

TodayToday

$ 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.

More Yahoo!

TodayTodayStrategic Acquisitions

VivaSmart

More Yahoo!

ServicesServices

Services > Commerce

ServicesServicesServices > Communication

ServicesServices

Services > Information

ServicesServices

Services > Listings

ServicesServicesServices > Media

ServicesServices

Services > Other

Portal Business Model Portal Business Model

More Yahoo!

Advertisers

Banner Ads, Sponsorships, Paid listings, visitor information

Catalog Merchants

Transaction fees,

Buy Add Value Sell

Search Technology

Google, Inctomi,

Overture, ODP, etc.

Yahoo! Business Model Yahoo! Business Model

Buy Add Value Sell

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

CompetitorsCompetitors

More Yahoo!

Strategy - Network ValueStrategy - Network Value

eBayeBayYahoo!Yahoo!

Discovery Discovery

Implications:

Yahoo! should maintain visitor growth to attract more advertising profits, yet the value of the Yahoo! Network is finite. finite.

Strategy - Strategy - 5 Forces in Portal Industry5 Forces in Portal Industry

Suppliers - WEAK

Users, website owners, web databases, ISP

Buyers - STRONG

Advertisers, e-businesses, internet users

New Entrants - STRONG

Web Databases, Vertical Portals

Substitutes - STRONG

Search Engines , Meta-Crawlers , Independent Web Directories, pay-per-click engines

Competitors

Search Engines, Media Portals

Strategy - Competitive AdvantagesStrategy - Competitive Advantages

More Yahoo!

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.

StrategicStrategic ChallengesChallenges

More Yahoo!

Undefined Strategy

No defined strategic niche.

StrategicStrategic ChallengesChallenges

More Yahoo!

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

StrategicStrategic ChallengesChallenges

More Yahoo!

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

StrategicStrategic ChallengesChallenges

More Yahoo!

Undefined Strategy

Increased Competition among Portals for paid services

Limited business model potential

StrategicStrategic OptionsOptions

p2p auction portal

Auction model like eBay

p2p music download portal

underground music&downloads like late Napster (Mike’s and Stef’s idea)

StrategicStrategic OptionsOptions

World Portal

Largest independent info-mediary

Independent Media Portal

Hollywood’s favorite on-line partner

Small Business Support Portal

Largest independent info-mediary

World PortalWorld Portal

More Yahoo!

propro 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

GroupGroup portal portal - Auctions - Auctions

More Yahoo!

propro 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)

GroupGroup portal portal – music downloads – music downloads

More Yahoo!

propro 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

MediaMedia & Game Portal & Game Portal

More Yahoo!

propro 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 Warner

Small Businesses PortalSmall Businesses Portal

More Yahoo!

propro contra+ Small Businesses moving on-line

+ Cost advantage for e-marketing 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

Future?Future?

More Yahoo!

Media portal +Media portal +

Info-mediary +Info-mediary +

Small Businesses PortalSmall Businesses Portal

How to Submit Your Questions

Always More Yahoo!

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 .