Yahoo! Inc. Case Analysis

Yahoo!, Inc. Case Analysis

Note to the Board of Directors

Per your request, the following analysis provides a comprehensive look at Yahoo!’s current state, as well as marketing recommendations that should be used when formulating Yahoo!’s overall strategic plan. It will provide you not only with a summary of Yahoo!’s competitive environment, but also with specific strategies for marketing Yahoo! as a worldwide multimedia leader.

Introduction

Since 1994, Yahoo! has flourished into a global brand that has drastically altered communication channels, information accessibility and purchasing techniques. Yahoo!’s mission is “to be the most essential global/Internet service for consumers and businesses,” (Yahoo! Inc, 3). In fulfilling its mission, Yahoo! provides offerings in fifteen languages in more than 20 countries, regions, and territories (Kessler, 2006). The three primary areas for its services are Search and Marketplace, Information and Content, and Communications and Consumer Services. Worldwide users currently total greater than 411 million (Yahoo! Inc., 4-8).

Situation Analysis

Market Profile

According to Scott Kessler, an analyst with Standard & Poors, the dot-com crisis that began in 2000 ended in mid-2003. Since then, many Internet companies have eliminated unprofitable businesses, cut costs, and streamlined business processes. These important business changes have led to better margins and greater capital preservation. The current health of the industry is strong especially given the economic rebound of late. Forrester Research estimates that online advertising and marketing spending will more than double to $26 billion in 2010, equivalent to a 14% annual growth rate (Kessler, 2006). Additionally, the number of Internet users is continually rising. Fewer surviving search facilities and dot-com corporations along with increasing demand suggests Yahoo!’s potential for improved revenue is great, although not without fierce competition.

Competitive Forces

The market for Internet services is a highly competitive industry characterized by rapid change, converging technologies, and increased competition from companies integrating communication, information and entertainment services with other media properties.