Yahoo Strategic Management

GROUP 5 ANGGI ELISA TAMATOMPOL IRENE MENAJANG

HISTORY • Yahoo! was started at Stanford University. It was founded in January 1994 by Jerry Yang and David Filo, who were Electrical Engineering graduate students when they created a website named "Jerry and David's Guide to the World Wide Web". The Guide was a directory of other websites, organized in a hierarchy, as opposed to a searchable index of pages. In April 1994, Jerry and David's Guide to the World Wide Web was renamed "Yahoo!". The yahoo.com domain was created on January 18, 1995.

• Yahoo! grew rapidly throughout the 1990s and diversified into a web portal, followed by numerous high-profile acquisitions. The company's stock price skyrocketed during the dot-com bubble and closed at an all-time high of US$118.75 in 2000; however, after the dot-com bubble burst, it reached an all-time low of US$8.11 in 2001. Yahoo! formally rejected an acquisition bid from the Microsoft Corporation in 2008. In early 2012, the largest layoff in Yahoo!'s history was completed and 2,000 employees (14 percent of the workforce) lost their jobs. • Carol Bartz replaced co-founder Jerry Yang as CEO in January 2009, but was fired by the board of directors in September 2011; Tim Morse was appointed as interim CEO following Bartz's departure.Former Paypal president Scott Thompson became CEO in January 2012 and after he resigned was replaced by Ross Levinsohn as the company's interim CEO on May 13, 2012. As of May 2013, former Google employee Marissa Mayer is the company's CEO.

VISION & MISSION YAHOO’S MISSION STATEMENT : “Our mission is to be the most essential global Internet service for consumers and businesses. How we pursue that mission is influenced by a set of core values – the standards that guide interactions with fellow Yahoos, the principles that direct how we service our customers, the ideals that drive what we do and how we do it. Many of our values were put into practice by two guys in a trailer some time ago; others reflect ambitions as our company grows. All of them are what we strive to achieve every day. YAHOO’S VISION STATEMENT : • To connect people to their passions, their communities, and the world’s knowledge. • To be the center of people’s online lives.

BUSINESS ACTIVITIES : THE MANAGEMENT

BUSINESS ACTIVITIES : THE FACILITIES • Yahoo! Inc headquarters is located in Sunnyvale, California, U.S. Yahoo! Inc also has branch offices in some countries like in Hong Kong, Brazil, Singapore, Argentina, India. • Yahoo also has data center site that located in some regions of U.S and other countries. Yahoo’s data centers help keep all of their products and services up and running smoothly 24/7. They need the data center to be fast, reliable, and energy efficient as possible. • Yahoo typically use their data centers to process and store data. These are the type of places where they store all of emails data for Yahoo! Mail and Messenger, pictures of Flickr, process data of Yahoo! Finance, and keep new data up to the minute.Right now, the data center sites is located in New York, Washington, Nebraska, and Singapore.

BUSINESS ACTIVITIES : THE FACILITIES

BUSINESS ACTIVITES : PRODUCTS

• USER OFFERINGS : Yahoo.com, Yahoo! Search, Yahoo! News, Yahoo! Sports, Yahoo! Finance, Yahoo! Entertainment and Lifestyles, Yahoo! Videos • COMMUNICATIONS : Yahoo! Mail, Yahoo! Messenger • USER GENERATED CONTENT : Yahoo! Groups, Yahoo! Answers, Flickr • MOBILE AND EMERGING PRODUCTS : IntoNow from Yahoo!, Yahoo! Connected TV • ADVERTISERS AND PUBLISHER OFFERINGS • DEVELOPER OFFERINGS : Yahoo! Developer Networks, Cocktails, Yahoo! User Interface, Search BOSS, Yahoo! Flickr API

BUSINESS ACTIVITIES : GOOD CORPORATE GOVERNANCE • Corporate Governance Guidelines have been adopted by the Board of Directors (the "Board") of Yahoo! Inc. (the "Company"), pursuant to the recommendations of the Nominating and Corporate Governance Committee to assist the Board in the exercise of its responsibilities. These Corporate Governance Guidelines reflect the Board's commitment to monitor the effectiveness of policy and decision making both at the Board and management level, with a view to enhancing long-term stockholder value. The Board intends that these guidelines serve as a flexible framework within which the Board may conduct its business, not as a set of binding legal obligations.

BUSINESS ACTIVITIES : CORPORATE SOCIAL RESPONSIBILITY (CSR) • Yahoo has worked to protect and promote freedom of expression and privacy on the Internet. In 2008, Yahoo launched its business and human rights program hosted some of the works of charity are concerned with human rights to educate people about freedom of expression on the Internet. Which consists: human rights fund – Yahoo has been established in partnership with the Laogai Research Foundation (LRF) for the provision of freedom of expression for jailed politicians and to provide humanitarian and legal support for them, and also to provide area for them to express their views online on the Internet, and to provide assistance to their families.

• And academic fellowships – .Fellowship program: Yahoo has worked on the establishment of programs in many universities in the United States to advance the work of scientific programs, scholastic and media, one of these programs is the Yahoo International Press Fellowship at Stanford University, Yahoo created an International Press Fellowship in Stanford University in 2006 to support the work of journalists from countries where there are difficulties and problems in the freedom of the press to help overcome these difficulties. • Another program was established at Georgetown University in 2007 and this program supports activities, education and scientific search. Fellows from all over the world and from different sectors (government, civil society, some companies) have participated in this program. It is called “Yahoo! International Values, Communications, Technology, and Global Internet Fellowship Fund at Georgetown University.”

EXTERNAL ASSESSMENT : ECONOMIC FORCES •

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Economic growth affects Yahoo to some extent. Specifically, in mature markets like the USA, a recession impacts Yahoo’s sales/earnings growth. Marketing services expenditures tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Since Yahoo derives most of its revenues from marketing services, any deterioration in economic conditions causes decreases in or delays in advertising spending and is likely to reduce the Company’s marketing services revenues and negatively impact its short term ability to grow its revenues. Economic Growth in countries like China, India, Russia and Brazil afford further market share for Yahoo. However, in a number of international markets, especially those in Asia, Europe, and Latin America, Yahoo faces substantial competition from local Internet service providers and other portals that offer search, communications, and other commercial services. Many of these companies have a

SOCIAL, CULTURAL, DEMOGRAPHIC, ENVIRONMENTAL FORCES

POLITICAL, GOVERNMENTAL, AND LEGAL FORCES • Yahoo is subject to U.S. and foreign government regulation of Internet, mobile, and voice over internet protocol, or VOIP, products and services which could subject the Company to claims, judgments, and remedies including monetary liabilities and limitations on its business practices. Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to comply with such laws, could adversely affect Yahoo’s business.

• Also there are some countries that giving strict laws for the internet users : 1.Iran Unlike free shopping at an online clothing store , access forbidden websites highly criticized . Iran rules require users who want to subscribe to the internet service provider must write a statement, that they will not access sites immoral . In fact, households are only allowed to have a download speed of 128 Kbps internet . If violated, the death penalty can be imposed for makers of porn websites and dozens of years in prison for that access. 2.China China is arguably the country with the most stringent regulations in the world internet . Millions of been blocked websites including Facebook , Google and Twitter . Opinion of citizens in cyberspace is limited. Every internet cafes is watched closely. Violators can be sentenced to prison. 3.Afghanistan This country to block all social networking sites and dating . Forbidden content such as gambling, alcohol and sex when published will be put to death . Due to reap a lot of protests, the death sentence was replaced 20 years in prison. 4.Morocco There was no clear rules , but all the websites are blocked without any reason such as Google Earth and YouTube

5.Burma Very limited internet connection Burmese military government . Prohibitive cost imposed so many businesses are using the internet backwards. Blocking was often done . Violation of the rules can result in penalties up to 15 years in prison. 6.Cuba Not carelessly allowed to access the Internet in Cuba . There are two types of connections are very limited national connections can only access email and the website governments and international connections . Costs are both very expensive and each user must submit identity and full address. 7.South Korea Despite being the state with the fastest connection in the world, South Korea has few rules . Internet users must use real identities when posting something to the virtual world. Many websites are blocked including about gays and lesbians. Sentenced to 5 years for violators. 8.United Arab Emirates In controlling the use of the internet, the United Arab Emirates to implement a firewall to block all porn websites . Even Skype and Flickr including a blocked website.

TECHNOLOGICAL FORCES • The products and services offered by Yahoo have expanded and changed significantly over time, and are expected to continue to expand and change rapidly in the future to accommodate new technologies and Internet advertising solutions and new means of content delivery, such as rich media, audio, video, and mobile. In addition, the Internet and online services industry is characterized by rapid technological change. Widespread adoption of new Internet, networking or telecommunications technologies, or other technological changes, requires substantial expenditures to modify or adapt the Company’s services or infrastructure.

COMPETITIVE FORCES • The Company was facing competition from the searchrelated advertising companies.In addition, Yahoo encountered competition not only from existing rivals but also from new ones. For example, Yahoo was said to be competing with established players like CNN in news, ESPN in sports Microsoft in e-mail, AOL in instant messaging, MySpace and Facebook in social networking, and Google in search. Thus, many competitors compete to be number one in each particular area. On other hand, Yahoo was still on its position losing more customers. At that time the market of online advertising was growing rapidly which allow the advertiser to choose between alternatives channel to reach their audience.

• Yahoo’s primary competitors are Google and MSN. All of which compete in the industry of “Internet Information Providers.” Google: Google is the major rival of yahoo. It is now dominating the search engine web pages and became the leading search engine in a short period of time. It also known for Simple home page makes it easy to users. The company came out with the great idea of payment for adverting by clicks. Google was gaining double revenue than Yahoo did, nonetheless, the average monthly number of visitors were less than Yahoo. MSN : Microsoft’s offering, MSN, “provides personal communications services, such as email and instant messaging, and online information offerings such as MSN Search, MapPoint, and the MSN portals and channels around the world.”

INTERNAL ASSESSMENT : MANAGEMENT • The first part of the problem is that Yahoo does not have enough talented people working for the company. One Yahoo executive tells that over the past couple years, too many of Yahoo's "Bplayers" have hired "C-players," and that these people are not "fired up to come to work.“ • The second part of Yahoo's "people problem" is that the company does not give its people the proper incentives. One of Yahoo’s executives said that there are bonuses, but they are not based on key inputs into the business. They're based on trailing measures like revenues.

• Third, Yahoo CEO Marissa Mayer's controversial decision to ban employees from working from home led some to question the value of social business tools. Two executives from social business providers say Yahoo's problem isn't about collaborating. It just needs to manage better. • The number of employees who work remotely Yahoo so many, and they come from different divisions ranging from marketing to engineering division. Most of them are not productive.

MARKETING • Yahoo! is one of the most recognized brands in the world. Yahoo products, services, and content enable to attract, retain, and engage users, advertisers, publishers, and developers. Yahoo marketing teams engage in each Step of the development, deployment, and management of products and services, and in content design. Yahoo marketing team will help shape Yahoo offerings to better market them to Yahoo potential and existing users. • Branding The first marketing area that needs work is branding. Yahoo has high name recognition and roughly 700 million unique monthly visitors.

MARKETING MIX Products • USER OFFERINGS : Yahoo.com, Yahoo! Search, Yahoo! News, Yahoo! Sports, Yahoo! Finance, Yahoo! Entertainment and Lifestyles, Yahoo! Videos • COMMUNICATIONS : Yahoo! Mail, Yahoo! Messenger • USER GENERATED CONTENT : Yahoo! Groups, Yahoo! Answers, Flickr • MOBILE AND EMERGING PRODUCTS : IntoNow from Yahoo!, Yahoo! Connected TV • ADVERTISERS AND PUBLISHER OFFERINGS • DEVELOPER OFFERINGS : Yahoo! Developer Networks, Cocktails, Yahoo! User Interface, Search BOSS, Yahoo! Flickr API

Promotion • Yahoo has developed a new ad campaign which uses the slogan “your favorite stuff all in one place “ • The Yahoo logo has changed • Yahoo has run radio and television ads comparing itself favorably over Google. Price • Yahoo Search employs quality-based pricing, which measures the quality of traffic coming from its distribution partners , for example web publishers that display your paid ads. • Yahoo Ecommerce rates for small business range from $39.99 (starter) to $129.95 (Standard) on up to $299.95 (Professional) in monthly costs. • Yahoo domain service prices range from the length of term, example : 1 year costs $9.95, two years $19.90, 4 years $29.85 and 5 years $49.75. • Yahoo Web Hosting prices range from $9.95 per month (if the term is 1 year) to $12.95 if the term is on a monthly basis.

Place • Yahoo operates an affiliate program whereby online marketers can promote its Hosting Services, Yahoo Mail Plus, Yahoo Games, Yahoo Hot Jobs and Merchant Solutions for commissions ranging from $10 to $90. • Yahoos online Search Marketing Distribution Network includes AllTheWeb, MSN, Info Space, Net Zero, DreamWiz, HP and AltaVista.

FINANCE

PRODUCTION/OPERATIONS • Yahoo manage their business geographically. The primary areas of measurement and decision-making are Americas, EMEA (Europe, Middle East, and Africa), and Asia Pacific • Yahoo provide services in more than 45 languages and in 60 countries, regions, and territories, including localized versions of Yahoo! in Argentina, Australia, Austria, Brazil, Canada, Chile, China, Colombia, Egypt, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan, Jordan, Kuwait, Malaysia, Mexico, the Netherlands, New Zealand, Peru, the Philippines, Russia, Saudi Arabia, Scandinavia (Denmark, Finland, Norway, and Sweden), Singapore, Spain, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, the United States, Venezuela, and Vietnam.

• Outside of native English speaking countries, Yahoo rovide some of their most popular user services through Yahoo! Asia (our English language portal to Southeast Asia), Yahoo! Canada En Français (French Canadian Website), and Yahoo! En Espanol (United States Hispanic Website). They own a majority or 100 percent of all of these international operations (except in Australia and New Zealand, China, and Japan where They have joint ventures and/or noncontrolling interests). They support these businesses through a network of offices worldwide. • Revenue is primarily attributed to individual countries according to the international online property that generated the revenue.

RESEARCH AND DEVELOPMENT • Yahoo Labs has hired 30 researchers with PhDs in 2013 and plans to add another 20 by year-end. This research and development group is led by Chief Scientist Ron Brachman, a former scientis at the U.S. agency that helped invent the Internet. • Some of Yahoo Labs’ focus areas are in mobile, content personalization and predictive analytics. Recent projects include a search engine that asks users for more context about their queries and an analysis of political opinions drawn from messages posted to Twitter Inc.

MANAGEMENT INFORMATION SYSTEM • The systems through which Yahoo provide Yahoo products and services are highly technical, complex, and interdependent. Design errors might exist in these systems, or might be introduced when Yahoo make modifications, which might cause service malfunctions or require services to be taken offline while corrective responses are developed. • Despite Yahoo implementation of network security measures, Yahoo servers are vulnerable to computer viruses, worms, hacking, physical and electronic break-ins, router disruption, sabotage or espionage, and other disruptions from unauthorized access.

• Such events could result in large expenditures to investigate or remediate, to recover data, to repair or replace networks or information systems, including changes to security measures, to deploy additional personnel, to defend litigation or to protect against similar future events, and may cause damage to Yahoo reputation or loss of revenue. • Yahoo rely on third-party providers over which Yahoo have little or no control for Yahoo principal Internet connections and co-location of a significant portion of Yahoo data servers, as for Yahoo payment processing capabilities and key components or features of certain of Yahoo products and services.

SWOT ANALYSIS STRENGTH • Have strong brand image that internet users already know about yahoo is a search engine, Yahoo portal, Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! AnsYahoors, advertising, online mapping (Yahoo! Maps), video sharing (Yahoo! Video), and social media Yahoosites and services. • Yahoo offers many services compared to the competitors • Fast and very relevant search, Free for customers • Yahoo users about 700 million of them, in 60 countriesaround the world. • Yahoo offers advertising services for free, but some of the premium is not free • Yahoo provide services in more than 45 languages

WEAKNESS • Yahoo does not have enough talented people working for the company • Yahoo does not give the employee the proper incentives • Yahoo’s information system is not secure and safe • Yahoo’s employee is not cooperative with each other • Yahoo’s revenues is decreasing from last year • The design of Yahoo homepage is too complicated compared with Google that is more simple.

OPPORTUNITIES • Yahoo has a potential global customer base of 2,405,518,376 people who access the Internet around the world • So many business sector that advertise their product on internet so the possibility to advertise on yahoo bigger. • So many Gadget that support to access internet so the opportunity to access yahoo also more bigger. • Computer services industry, where Yahoo operates, is very difficult for new competitors to enter the market.

THREATS • Restrictions applied by Governments in terms of content • The growing popularity of social networking sites like facebook, twitter, myspace • Tight competition in computer services industry with Yahoo and Microsoft • Increasing strength of competitors • Many other websites and blogs that also offer advertising ads with lower rates • Consumer advertising towards online advertising may become more negative

THE INPUT STAGE : EXTERNAL FACTOR EVALUATION (EFE) MATRIX

COMPETITIVE PROFILE MATRIX (CPM)

INTERNAL FACTOR EVALUATION (IFE) MATRIX

THE MATCHING STAGE : SWOT MATRIX

SPACE MATRIX

BCG MATRIX Yahoo relative market share position : 18% Industry Sales Growth Rate : 4,47%

INTERNAL-EXTERNAL (IE MATRIX)

GRAND STRATEGY MATRIX

THE DECISION STAGE : QSPM MATRIX