Yahoo Case

1 January 2017

We are committed to winning with integrity. We know leadership is hard won and should never be taken for granted. We aspire to flawless execution and don’t take shortcuts on quality. We seek the best talent and promote its development. We are flexible and learn from our mistakes. (2, 5, 6, 9) Innovation: We thrive on creativity and ingenuity. We seek the innovations and ideas that can change the world. We anticipate market trends and move quickly to embrace them. We are not afraid to take informed, responsible risk. (4) Customer Fixation: We respect our customers above all else and never forget that they come to us by choice.

We share a personal responsibility to maintain our customers’ loyalty and trust. We listen and respond to our customers and seek to exceed their expectations. (1, 3) Teamwork: We treat one another with respect and communicate openly. We foster collaboration while maintaining individual accountability. We encourage the best ideas to surface from anywhere within the organization.

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We appreciate the value of multiple perspectives and diverse expertise. (8) Community: We share an infectious sense of mission to make an impact on society and empower consumers in ways never before possible.

Other than offering advertising and online properties, the company offers Internet access through third-party entities 4. Other than advertising fees, Yahoo generates additional revenue by charging fees for a range of premium services 5. With additional lay-offs, the company anticipating to have a better profitability for the next few years 6. Within Internet base service, Yahoo! has several revenue generated segments such as Search, Display Related, Classified, Referrals / Lead Generation and Email. 7. Company’s quick ratio is 2. 54, above industry average Weaknesses 1. The net income decreased by 35. percent to $424 million. 2. Overall advertising revenue dropped by 13 percent in the 2nd quarter of 2009 compare to the prior year 3. Yahoo! closed several of its video properties and is planning to close twenty video services including its social network site Yahoo! 360 and its Web hosting service GeoCities 4. Company’s capital lease and other long-term liabilities increased by over $48 million 5. Microsoft has tried to acquire Yahoo! twice for the last three years Financial Ratio Analysis (October 2009) Growth Rates %| Yahoo! | Industry| S&P 500| Sales (Qtr vs year ago qtr)| -11. 80| 7. 60| -5. 20|

Microsoft has tried to acquire Yahoo! twice for the last three years| Opportunities| S-O Strategies| W-O Strategies| 1. 1. 1 billion Internet users around the world as of 2006 and it is still growing 2. Internet advertising revenues in the U. S. remains strong, topping $23 billion in 2008 3. Consumers are spending more of their time online 4. New business strategies such as bundling Internet access with voice and video services are increasing 5. Innovativeness in technology is the driving force in Internet-based businesses 6. Many businesses overseas are finding advertising on Internet less expensive and more responsive 7.

Countries such as China and India have stronger economic status and accordingly, the companies are able to spend more advertising dollars via Internet | 1. Implement a vertical or horizontal integration (forward or backward) of a company that has global presence (S2, S6, S7, O1, O2, O3, O4, O5) 2. Increase advertising spending by additional 10% on fee based segments (S7, O4) 3. Cutback prices on advertising and fee based segment by 2% (S7, O1, O2)| 1. Acquire innovative technology / Internet related businesses using a combination of cash and debt

Sell off low profit segments and pay down the long term debt (W4, O1)| Threats| S-T Strategies| W-T Strategies| 1. Due to weak economic conditions, Internet related businesses also have suffered 2. In 2009, a number of Internet content and advertising companies reported disappointing financial results and lowered their forward financial outlooks 3. Low entry barrier makes the viability of existing Internet based businesses difficult 4. Changes in legislative requirements concerning technology sharing, patent rights and information security could increase future expenses and lower profitability 5.


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