Case Yahoo!

Presented by:

Zaida Marcela Cañón

Presented to:

Teacher Oscar Cruz

University Foundation of the Area Andina

Faculty of Administrative, Economic and Financial Sciences

Ecommerce, Business and Logistic

Bogotá D.C

2020
 Case Yahoo!

Yahoo it is a global company of means with head office in the United States that possesses a

portal of Internet, a web directory and a series of such services like the popular e-mail Yahoo. Its

intention is "to be the most essential global service of Internet for consumers and business". It

was founded in January, 1994 by two postgraduates of the University of Stanford, Jerry Yang and

David Filo. Yahoo was constituted like company on March 2, 1995 and began to quote in bag on

April 12, 1996. The company has its corporate head office in Sunnyvale, California, the United

States. Yahoo! he was one of the pioneers of the initial age of Internet in the decade of 1990.

(NeoAttack, 2015).

Inside the most important facts in the company of Yahoo it was in 1994, newly formed the

company they began having many publicity linkage and they were provided with 80.000 visits a

day. In the year 1995, one year after its creation turned into the directory of search number 1 in

the world, that's why its creators decided to do a big marketing effort to say to the investors on

the benefit that it had in this moment the on-line publicity and as the "clicks" of the users might

take advantage. In 1999 something very important happened that it was its agreement with

Hewwlett Packard and later it happened with IBM; in the same year they already had 3.000

advertisers a day, obtaining a benefit of almost 50 millions and they took the decision to enter

international markets. From here on, between constant procurement and new business, everything

was up: the Yahoo creation! Mail, the opening of its area of games, the acquisition of GeoCities,

the premiere of Yahoo! Groups and Yahoo! Messenger. The previous thing was showing the

heyday that had the company in its best years. (Angel, 2002, p. 388-390).
With regard to what I am named like “the Yahoo fall!” it began falling down when in the world

there was the problem of the change of century, in the year 2000 the users began complaining

because they found unpleasant announcements, that's why it generated lost in the company and

they had to close some pages, its error was to have no support to protect the web sites of the

intruders and these were attacked by other persons, so the announcements were diminishing

increasingly and the investors began losing the patience, that's why Yahoo decided to receive a

tariff for its services, it would not be already free and this the consumers did not take it very well

either. In the same year 2000 its actions fell down 30 % and its weakness was to depend

completely on the publicity in line, so they decided to provide other quality services and generate

income with not free publicity. In the year 2001 it came Mister Terry Semel was nominated the

new CEO of the company. (Angel, 2002, p. 390-393). After a long period in which the actions

were not stopping rising and Yahoo it had turned into a machine of doing money, there came the

fall of the company, the loss of confidence of the investors in the new companies of Internet and

the consistent fall in Stock Exchange. Multitude of companies closed, many were ruined and

Yahoo suffered a hard economic reverse of the one that never went so far as to recover

completely.

With the arrival of the new CEO, Semel concluded that the Yahoo errors it was due to the fact

that they were not taken the decisions correctly and few ones were deciding them, that's why he

put two goals, the first age to improve I deposit them of the company and the second age to

expand the market. During the year 2000 and 2003 Semel promised to impel the company and

increased its operations, coming to the European continent where it made great investment in this

market, in the year 2004 acquired the company Kelko for a value for 319 million euros. Its

competitive advantage was based on the innovation and supply of new products to extend its
services briefcase, adding to this one, videos, games, photos, music, between others. Also they

did the personalization of the contents, where the persons could find what more he liked. Yahoo

acquired companies specializing in diverse topics to fulfill its target to offer quality services,

companies like Flickr, Musicmatch and Inktomi. One of its biggest challenges was in 1999 to

enter the Chinese market because they had problems with the political restrictions of the country,

in addition to which they did not know the Chinese market, which they were persons with low

income and the mobility was slow, also they faced the local market, the persons were distrusting

the western companies, that's why it was so difficult for Yahoo to be able to negotiate on the

Chinese market. Nevertheless they promised to know the Chinese market and to offer them

services and products in accordance with its needs, managing in the year 20001 to increase its

users to 22, 5 millions and for 2005 they were already 100 million users. (Angel, 2002, p. 394-

398).

Inside the big Yahoo errors it was the loss of opportunities, for example after remaining behind

with its searcher, Yahoo suffered the second big blow to its business. The on-line publicity began

falling down. In 2007, Google passed of giant in this area on having bought the Startup of

management of publicity “DoubleClick”, a company that Yahoo decided not to acquire a few

years earlier. One year earlier, in 2006, Yahoo also let through of length a golden opportunity. At

that time Facebook already had certain name, but he was still not the giant who is today and the

possibility of buy existed. It was rumored that its value was about 1.000 million dollars, but its

actions were going down and Yahoo offered only 850. Mark Zuckerberg pushed it back and

Yahoo had to regret without having raised once again the offer. In 2008, Yahoo might have

enjoyed a happy end when Microsoft offered 44.600 million dollars for the company, a number

very superior to the dear value that was given him at that time. Incomprehensible, Yahoo rejected
the offer, and further on the same way it proved using the services of Microsoft, that is to say

they did not think the things to future and took erroneous decisions. (Aparicio, 2017).

The Yahoo business model is to work turn and about the number of users who do "click" in the

publicity to gain access to the information places, after seeing a banner or announcement on a

web page. Yahoo, which was the first massive portal of Internet, maintains a users' enormous

base, but it has lost competitiveness in almost all the fields before its rivals as there them are

Google and Facebook. The strategy that Yahoo in its beginnings was very novel because it was

the first company that developed the idea of one “intelligent searcher”, everything began when to

be able to gain access to any web page it was necessary to know the finished url of the place

since otherwise it was impossible, this to its creators Jerry Yang and David Filo was looking like

a very inefficient way of looking for places webs so they had the idea of creating a species of

directory of pages that was classified by topics to facilitate the task of looking for any interest

page; so they chose to generate its income for the users' quantity that were entering the places

that were appearing in the commercials, but due to a bad handling of its safety, its visits began

diminishing to the passage of time, to the beginning it worked because they were the pioneers of

the online searching, but they did not realize that new companies began being born with similar

services, they did not put a lot of care to the topic of the competition, which was what further on

overcame them in number of visits on the web pages. (Angel, 2002).

The expectations for Yahoo in the future the fact is that they must make use of its world

recognition and it is a very strong company of all forms, since it has managed to go out to

forward although it has committed errors, but a sample of its nobility was that it survived

collapse of the point.com in the year 2000, showing the force of team and the capacity of answer

of the company in the dynamic world of the business. One of its biggest characteristics is that he
thinks about how to make progress continuously to develop and deliver new and innovative

services, the innovation has always been present in the heart of the company, that's why they

managed to have wide briefcase of services in which the electronic commerce, the marketing is

included on the web pages, the music and a big list of products centred on the needs of the users

who continue them; also it has been a very assiduous company that he has learned of each of its

errors, and although they have to keep on doing changes in the future once they managed to

identify what the persons needed, so they understand the consumers and although fall down they

can be leaders again on the market of the Internet searchers. (Angel, 2002).

The Yahoo current situation, the fact is that after living through several changes of direction and

after buying impulsively companies, trying to meet in the nail on one, in addition to creating

multiple equal services to those of its competition, but without standing out in any. Finally,

Yahoo was bought by Verizon for 4.8 million dollars. The things that can be learned of the case

the fact is that a direction must always be had well put and focused in extracting good services,

and not only to do it for doing it, but trying to shine in each one as Google did it with its multiple

services, in addition to not believing that the solution can only be in third, avoiding to commit the

error of buying companies and Startups believing that the solution will be in some of them.

(Coem, 2020).
 References

NeoAttack, (2015). What is yahoo? Recovered of: https://neoattack.com/neowiki/yahoo/

Aparicio. D, (2017). The history of Yahoo, a long chain of errors. Recovered of:

https://www.20minutos.es/noticia/2930945/0/historia-yahoo-aciertos-errores/

Coem, (2020). Know the case Yahoo! and how did its slope come. Recovered of:

https://coem.mx/conoce-el-caso-yahoo-y-como-llego-su-declive/

Angel, K. (2002). Inside Yahoo!: reinvention and the road ahead. Recovered of:

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