Yahoo Incorporation Harvard Case Solution & Analysis

Introduction:

Yahoo is a multinational company that is based in America and headquartered in California. It is an American internet company based on web portal, yahoo answers, yahoo news, yahoo search engine, yahoo directory, yahoo finance, etc. The company is known to have most commanding sites in the United States. The company was founded by David Filo and Jerry Yang back in 1994. The company was formally incorporated in March 1995. In July 2012, Marissa Mayer became the Chief Executive Officer (CEO) of Yahoo.

Problem identification:

The fundamental problem that Yahoo was facing was a steep decline in the company’s revenues from $6.3 billion in 2010 to $4.9 billion in 2012. This was happening because of the frequent changes in the CEO’s position. In addition to that, advertisers were luring back as they have found other alternatives for advertising such as Google and Facebook. Moreover, the brand image of Yahoo was muddled. In order to survive in a competitive market, the company had taken strict measures like executive churn, constant cost cutting and mass layoffs; which reduced the employee morale and level of satisfaction in turn.

Analysis:

Yahoo’s strategy:

The company has grown as a portal company. Yahoo is a media company that is engaged in advertising ads and other ads as well. The company’s original strategy was based on search with advertising intertwined.

Strategy under Tim Koogle:

The company appointed Tim Koogle as new CEO of the company. Under Koogle, Yahoo had developed as a web portal that relied heavily on advertising revenue for profits. Koogle was certain that with the help of advertising ads, the company would be able to cover the decline in revenues. In addition to that, the CEO was sure that the advertisers would continue to pay in order to reach the younger and technologically savvy customers who were the principal users of Yahoo. Despite his efforts, the earnings of the company continued to decline.

Strategy under Terry Semel:

Terry Semel was a Hollywood media executive who became the new CEO of the company in 2001. The new CEO tried his level best to attract the old advertisers. The main strategy adopted by Semel was to find different ways to generate revenues and increase profits for the company. The main strategy implemented by him was acquisitions that would allow the Yahoo’s site to offer more premium services that consumers would think of worth paying. He moved the company towards online job hunting business with the help of hotjobs.com in 2002. In addition to that, the CEO tried to attract the customers and subscribers through online music service music match Inc. Semel only focused on the acquisition and involved in acquiring companies as a photo sharing site, Flicker.

According to Semel, this type of deals would help the company increase revenues from subscriber’s fee. Furthermore, Semel introduced a concept of theme park where customers found themselves in a world full of tempting offerings. The biggest move made by Semel was to establish a strong position in the search area. In addition to that, Semel had brought in several individuals from the entertainment sector to create unique content for the firm.

Strategy under Jerry Yang:

Even after the efforts made by Semel, the shareholders of the company were not satisfied with the company’s performance; thus they appointed Jerry Yang as the new CEO of the company. During his whole tenure as CEO of the company, he tried to figure out the challenges and problems faced by Yahoo. One of the greatest criticisms faced by Yang was the rejection of the offer made by Microsoft. Yang was not as successful as the CEO of the company and decided to give up his role as the CEO of Yahoo Inc.

Strategy under Carol Bartz:

Shareholders and board of the directors made Carol Bartz the next CEO of the company. Strategy adopted by Bartz included combining Yahoo’s technology and product groups into one unit and create a customer advocacy group so that Yahoo could better integrate opinions from the customers. In addition to that, the new CEO focused on certain areas as finance, news and sports that were considered one of the major strengths of the company.

Another approach adopted by Bartz was to invest heavily in the department of content and hire many editorial employees as well as blog writers in order to improve the home news coverage. Further, she made some progress with revamping the technology behind the web portal that would have made it possible to introduce new services in the long-run.

Reconfiguring Yahoo by Marissa Mayer:

Although, Bartz made some aggressive moves to cut the cost and improve the profit margins, but her decision to handover Yahoo’s search operations to Microsoft was not liked by the shareholders as the search engine was renamed as Bing. Shareholders were also concerned about losing its valuable search experience that would be difficult to achieve .............................

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