Yahoo! Business on Internet Time

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Yahoo Case Study
2000. 6. 27
Kim, Deoksoon Jang, Hunbum Jiang, Chun
Jung, Youngjin
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Portal Industry Structure Analysis five forces
Potential entrants
Threat of new entrants
Bargaining power of suppliers
Industry Competitors Rivalry among existing firms
Buyers
Suppliers
Threat of substitute products or service
Bargaining power of buyers
Substitutes
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• Barriers to entry H
• brand power High
• technology complicated and changed fast
• initial financial resources high

• Supplier PowerH
• unique info. content
• 80 million to build brand recog.
• intense rivalry for top talent labor
• tech. partners s/w tool providers

• Buyer Power H
• quality of Info/ ease of Interface use/ habit
  and brand/recognition.
• Both have veto power.

• Industry Rivalry
• Competition H
• Too Fast moving

• Substitutes M
• Vertical Sites
• New Tech.

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Competitors Trailing Behind With MA

• Access Content Providers
• American Online/Netscape
• Microsoft Network (MSN)
• _at_Home/Excite
• Portals with Traditional Media Partners
• Disney/Infoseek
• NBC/Snap
• Independent Portals
• Lycos Network
• Alta Vista

Yahoo
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• Huge consumer base through Services provided
• search engines
• news release
• e-mail boxes
• actions shopping
• financial services
• chat rooms
• online game

Huge potential gains Ads815 bil. E-Com52
bil. by 2002.
Conclusion -NO PORTAL NO BUSINESS -a new of
business -a new way of life
Portal Provide consumers a point of entry into
the World Wide Web
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Yahoos Unique Approach triangle love
Users
Companies
Yahoo!

• Yahoo tailored the information to suit individual
  web users.
• Users are delivered to companies hoped to sell
  products toem.
• Companies pay for referral fee or adverting fee
  to Yahoo!

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Analysis of Yahoos Strategy
Environment Analysis
Consumer Analysis
YahoosStrategies
- Raise Brand Recognition- User Oriented
Policy- Global Approach
Opportunities- Great Influence on human
life- Possibility of Expansion of Internet
Industry- Increased Portal Users
What do Non-paying Users Want ?
- Rapid and Accurate Search- Friendly
Interface
- Link each Service- Look and Feel
-Various and Qualified Information.
Threats- High Competitiveness- Limit of
Resources- Adapt to Dynamic Change.
-Adopt Only If Raises Customers Experience
- Partnership
- Other Service(E-mail, Chat)
- Partnership
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Yahoos Performance
Operating Statistics
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Yahoos Performance
Portal Reach of Top 4 Consolidated Networks From
Work
(of Users Reach)
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Yahoos Performance
Portal Reach of Top 4 Consolidated Networks From
Home
(of Users Reach)
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Yahoos Performance
Estimated Total Minute of Use per Month
per User
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Yahoos Performance
Brand Name Recognition
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Key Success Factor, Sources of Competitive
Advantage
AOL/Netscape- The Advent of The WWW
_at_Home/Excite- Broadband Tech. Lycos, Alta
vista- Search Tech. CNET, ZDnet- Vertical
Sites
Competitive Advantage
The Best Web Service - A Modern Media Company
- Reach The User and Level of Trust
Core Competence
- Rapid change and Adjustment- Tailored
Services- High Brand Recognition
Competitor
Resources
ORG. Capabilities
- High Talented People- Financial Resources-
Diverse Properties - Strong Bargaining Power-
High Brand Recognition
- Flat Functional Structure- Effect
Communication- Operational Excellence- Focused
Short Term Plan- Unique Corporate Culture
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Types of MA in Portal Industry
1. Content Providers Portal
AoL-Netscape 2. Traditional
Media Portal Disney-Infoseek,
NBC-Snap 3. Internet service provider Portal
Lycos-Hotbot, Tripod
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Evaluation sheet of each MA
AoL Netscape
Before S.P
Before W.P
After S.P
After W.P
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B/C of Mergers in Portal Industry

1. Content Provider Portal AoLNetscape

AoL Netscape
Cost -Above 4.2Bil -Losing control corporate power -Identity
Benefit Have 2nd major Web Browser Netcenter Money Increasing Market Share
Evaluation Synergy effect
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B/C of Mergers in Portal Industry
2. Traditional Media Portal Disney-Infoseek
Disney Infoseek
Cost -70Mil, Cash -Starwaves Ownership -Lessening Power
Benefit 43 Stake get 9th major portal to Disney Ads Money Ownership Free multi-Media service
Evaluation
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B/C of Mergers in Portal Industry
3. Internet Service ProviderPortal
LycosHotBot,Tripod
Lycos HotBot
Cost -no data but money -Losing control corporate power -But, Identity
Benefit Another sites Increasing Hit Nr. Money
Evaluation No positive evidence (-8mil/89mil)
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Evaluate of MAs in Portal Industry
1. We should wait for the result of MA 2.
Generally, 65 of MA is failed.
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Position of Yahoo
High
In Depth
Vertical Site
Accessi- bility of Internet Gate
Content Provider
Depth of Info
Yahoo
Other Portal Site
Traditional Media
Low
Swallow
Simple
Diversity of Info
Various
Low
Brand Recognition
High
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Yahoos Strategic Option
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Conclusion

• Suggested Option
• ? High bargaining power to Internet related com
• ? Partnership or alliance
• ? Low bargaining power to Internet related com
• ? Acquisition