Yahoo Reaction Paper

On the 3rd of May, 2012, Daniel Loeb, Yahoo’s largest external shareholder, who then controlled 5. % of the company through his hedge fund – Third point, launched an attack on Yahoo! And its new C. E. O. , alleging that Scott Thompson had lied on his resume about his academic qualifications. This was a result of a proxy war between Yahoo! And Loeb, who being a major stakeholder, wanted his choice Of candidates on the board and saw Thompson as an obstacle. These allegations snowballed into a huge crisis during a trying period for the organization.

After rejecting a profitable takeover bid from Microsoft, steep competition from other internet giants and top level management issues, this situation weakened the company rather. Thompson, in his resume, claimed to have a college degree in accounting and computer science from Stonewall College near Boston. This “claim” was published on the company’s bio and annual report, a legal document whose validity and authenticity is confirmed by the CEO- He even certified these degrees in the Securities and Exchange Commission filings.

After receiving Lobe’s letter stating that Thompson only had an accounting degree from Stonewall and the college didn’t even offer a computer science degree at the time, Yahoo! Initiated an investigation. Upon receiving the findings of the investigation, Yahoo! Encoded that Thompson in fact only had an accounting degree and called the mistake an “inadvertent reproof. F-judging information on ones resume is something that many people indulge in, in order to make their profiles appealing especially in competitive job markets, a place where they fear loss to other capable candidates.

Scott Thompson probably didn’t need to lie about this particular qualification as he was in fact more than capable to lead Yahoo! Given his past experiences in technology firms like Papal and Visa. In my opinion, one of the most important methods of moral reasoning that one must adopt while making any professional or even personal decision, is the Rawlins Liberalism moral method. As Minnie Moldavia rightly suggests, one should keep in mind that the decisions you make could eventually decide your social position in the future.

This future could not just have a positive or negative effect on you, but also the others who depend on and matter to you. Had Scott Thompson followed this method while making his resume as opposed to just a consequentiality approach, it is very likely he wouldn’t have found himself in such a controversy. This saga did not just affect him, but also the organization, its shareholders and employees. Since Loeb first revealed Thompson padded resume, Yahoo’s shares fell by around 3%. Since his tenure began, Thompson began to cut costs by laying off almost 14% of the Yahoo! Rockford, most of whom were in fact engineers and computer science graduates. Although the “Resume-Gate” seemed to some a minor error blown out of proportion, several disgruntled Silicon Valley employees questioned how they could work for an organization where the C. E. O. Claimed to be a computer scientist and actually wasn’t. Employee and share-holder morale was at an all-time low, a situation caused by a decision made many years ago, which Thompson rabble thought would never come back to haunt him. Thompson is not alone. There have been other C. E.

Co’s who have lied about their credentials in the past and some have almost got away with it. Ronald Carmella, C. E. O of Bausch & Lomb, admitted to his mistakes and retained his position. Others like David Edmondson from Radiograms haven’t been so lucky. In the name of marketing or branding themselves, people believe they can attract aspirations jobs and seem appealing to employers. More often than not, people do not need these little lies to achieve success or the job of their dreams. David Edmondson, for example, had climbed up the company ladder and had become C. E. O. Cause of his ability and skillet, not because of the degree he showcased on his resume. Radiograms may have been too harsh when they implemented their decision, but it was definitely for the long term stability of the company. From the observations so far, understand that the active agents are the board of directors at Yahoo, Scott Thompson and Daniel Loeb. Their decisions will affect the passive agents I. E. The shareholders and the employees. So were Yahoo! And Radiograms justified in asking their prized possessions to move on? As a decision maker, the questions one must ask, according to Graham Tucker, are as follows.

Is the decision Profitable? On firing Scott Thompson without cause, Yahoo! Would have to pay him a huge severance fee and stock grants of up to $million. This would seem a huge compensation and a loss for the organization in the short term, but could definitely seem profitable in the near future as the stock prices were bound to increase, which they did upon Thompson resignation. Tucker also asks if the decision is legal. The answer to that is also yes. According to the Serbians-Solely Act of 2002, violators face penalties of 20 years in prison and nines of up to $million if the data submitted to the SEC isn’t authentic.

Fairness of the decision is another question that Tucker asks. According to the Yahoo’s code of ethics, all employees are expected to disclose fair, accurate, timely and understandable information in reports and documents filed to the S. E. C. This applies even to directors. It would be unfair to other employees if such conduct ignored what the top level management was up to. The decision of firing Thompson was also the right decision as this would not just set a strict precedent at Yahoo, but it would also salvage the company from a trying tuition.

No company would want their leader lying about anything let alone something as petty as three words on their resume. Trust issues creep in and shareholders could question the transparency and openness the company has to offer. Lastly, Tucker asks if the decision taken would ensure further sustainable development. I personally believe that during this predicament, in spite of multiple changes in management a few years earlier, a good change would benefit Yahoo’s future growth. A situation like this sets a bad tone at the top and beginning afresh would uplift employee and shareholder morale.

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Lawsuit Claims Yahoo Job Reviews Discriminated Against Men

A Yahoo Inc. media executive fired from the internet company last year has filed a lawsuit claiming a job review process implemented by Chief Executive Marissa Mayer was used to cut men from executive ranks and lay them off illegally, court papers showed.

Scott Ard, a former senior editorial director at Yahoo, filed the lawsuit in California’s Northern District Court in San Jose on Tuesday, saying the company violated federal civil rights and employment regulations.

Yahoo spokeswoman Carolyn Clark said in a statement that the lawsuit had no merit and called the performance review process “fair.”

The lawsuit is the second this year accusing Yahoo of discrimination against men, and targets one of the highest-profile Silicon Valley female executives, Mayer, who is in the middle of divesting Yahoo’s core assets after failing to turn the company around.

Ard, who joined Yahoo in 2011, argued that he had received overall positive performance reviews and stock awards before Mayer introduced a quarterly performance review (QPR) system that left him with an unsatisfactory ranking.

“Yahoo’s QPR Process permitted manipulation without oversight or accountability and was thus more arbitrary and discriminatory than the stack ranking used for a while by other employees,” the lawsuit said.

It accused Yahoo of violating the Civil Rights Act of 1964 and U.S. Worker Adjustment and Retraining Notification regulations.

Ard claims that since 2012, Yahoo has terminated more than 50 employees within a 30-day period on several occasions under the system, according to court documents. Yahoo had 9,400 employees as of March.

The lawsuit also claims former Chief Marketing Officer Kathy Savitt “intentionally hired and promoted women because of their gender,” noting that 14 of about 16 senior level editorial employees hired by her were women.

In February, former Yahoo Autos Managing Editor Gregory Anderson sued the company, accusing it of gender discrimination and violations related to the job review process.

The case, filed to U.S. District Court Northern California, San Jose Division, is 5:16-cv-05635-NC.

(Reporting by Deborah M. Todd; Editing by Peter Henderson and Richard Chang)

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Fortune 100 Company Research Paper: YAHOO

Table of contents

Abstract

Beginning as a student hobby, Yahoo today has evolved into a global brand that’s changed the way people communicate with each other and access, share and create information.

The site started out as “Jerry and David’s Guide to the World Wide Web,” but established a new name with the help of a dictionary. The name Yahoo! is the short form of “Yet Another Hierarchical Officious Oracle,” but the co-founders insist they selected it because they liked the general definition of the word yahoo: “rude, unsophisticated, uncouth.

This study analyzes the reasons behind the ranking given to Yahoo by Fortune 100. The magazine ranks Yahoo 44th in the list of 100 “most preferred companies to work for in 2007”.

The research about the company showed that Yahoo values its employees above all else. All the programs, activities and events that Yahoo develops are directed towards increased job satisfaction of the employees. The philosophy that is your employees are happy they will keep your customers happy and that will keep the profits coming in, seems to be working for the web giant.

About Yahoo: Services offered

Yahoo is in itself a definition of services that it provides, a wide variety of tools ranging from free portal services to financial market news to e-commerce-gateway; following is the range of service provided by YAHOO:

Search: Yahoo! has become one of the leading search engines on the Web. Yahoo! Search enables users to find anything they need on the Internet instantaneously through Yahoo! Web Search, as well as ‘vertical search’ products such as Yahoo! Image, Yahoo! Video, Yahoo! Local, Yahoo! News, and Yahoo! Shopping Search.

Communication: Top-notch communication services, such as Yahoo! Mail and Yahoo! Messenger, ensure that users can stay connected with friends, family, and colleagues any time, from anywhere in the world. As part of communication services, Yahoo! has also become a pioneer of social networking, offering innovative services and user-generated content in products such as My Web, Yahoo! Personals, Yahoo! 360º, Yahoo! Photos, and Flickr.

Content: Yahoo! partners with hundreds of premier content providers to bring entertainment and high-quality media content to its users through products such as Yahoo! Sports, Yahoo! Finance, Yahoo! Music, Yahoo! Movies, Yahoo! News, and Yahoo! Games.

Mobile: Committed to extending our content and services beyond the desktop, Yahoo! has the largest global mobile audience and the greatest breadth of wireless products and services of any online network.

Connectivity: Recognizing that the Web’s future will be fueled by broadband connectivity, Yahoo! has developed successful partnerships with the world’s leading broadband providers.

Commerce: Yahoo! is also one of the world’s largest enablers of consumer transactions on the Web, offering commerce services such as Yahoo! Shopping, Yahoo! Autos, Yahoo! Auctions, and Yahoo! Travel, which gives consumers the relevant information they need to make informed purchases online.

Small Business: Yahoo! Small Business enables small business owners and professionals to establish and grow a business presence with services such as Yahoo! Domains, Yahoo! Web Hosting, Yahoo! Merchant Solutions, Yahoo! Business Email, and Yahoo! Store. Yahoo! also offers HotJobs to help recruiters find the talent they seek.

Advertising: An industry leader in online advertising, Yahoo! provides a comprehensive and effective set of marketing solutions, offering tools for businesses of all sizes. Unique and powerful brand advertising solutions allow clients to build awareness among the world’s largest engaged audience.

Being in the IT industry Yahoo faces challenges every day. Since its modest beginnings, Yahoo has come a long way and grown to become one of the worlds’s most prominent Internet service both for consumers and businesses.

Yahoo! Motto:

Motto of an organization can be referred to as the slogan that eventually develops motivation amongst its human resource. The YAHOO motto is given as follows:

Work hard, play hard and don’t take yourself too seriously.

The Core Values and Guiding Principles:

Each organization has its core values and guiding principles that mold the behavior of individuals towards the sculpture that the organization is more willing to have in its employees. The core values and guiding principles of YAHOO are Excellence, Teamwork, Innovation, Community, Customer Fixation, and most importantly Fun.
Research Discussion

How does Yahoo justify its position in the Fortune list of “the best companies to work for”?

This section discusses the justification of YAHOO’s presence in the fortune list of most like employer [3] i.e. the reasons that make the a desirable place to work.

YEF: the Yahoo! Employee Foundation:

At Yahoo!, it is a belief that people are prime assets and the best way to support budding non-profit organizations. YEF, the Yahoo! Employee Foundation, is a grassroots altruistic organization that brings together the time, talents and financial resources of Yahoo! employees to help communities across the globe.

Started in 1999 by Yahoo!’s co-founders as a means for employees to personally give back to their communities, YEF offers three key opportunities for participation: donation to the YEF Fund, starting an organization to get a grant from YEF and volunteering through YEF.

The culture at Yahoo! attracts employees who not only think out of the box, but want to make a difference as well and who are often already connected or involved with compelling organizations. Since its commencement, YEF has donated over $2.7 million to non-profits championed by employees.

The Uniqueness of YEF

YEF is exclusively employee-driven. All of the funds are donated by Yahoo! employees; all grant beneficiaries are championed by the employees, and all YEF activities are run by a volunteer group of employees as well. Key focus areas for YEF include supporting education and youth, building communities and families, and environmental protection.

Rewards

Salaries pay, perks and rewards constitute one of the most important factors leading to job satisfaction and Yahoo strives to provide the maximum to its employees. Apart from the highly ingenious (and highly casual) work environment coupled with the fact that almost every success is celebrated with a party; Yahoo! offers plenty of other perks as well. Foosball is popular to the extent of becoming the official Yahoo sport, and video games exist throughout the company complex. Following are some unique benefits that Yahoo offers to its employees.

  1. Back-up child care
  2. Commuter options
  3. Discount movie passes
  4. Free one-year Yahoo! Music subscription
  5. Free sodas and specialty coffee drinks
  6. Game room
  7. Health club and massages
  8. Matching charitable gift program
  9. On-site cafeteria
  10. -site car wash and oil change
  11. On-site dental care
  12. On-site dry cleaning
  13. On-site haircuts
  14. Yahoo! Mart
  15. Yahoo! Store

The key benefits for full-time Yahoo! employees (with the exception of some variations) are:

Stock Options/Employee Stock Purchase Plan:
Yahoo! stock plans were designed to offer employees the opportunity to share in the success of the company. Employees pay only 85% of market value for the stock.

Vacation :
Yahoo! recognizes that everyone needs a little break and so vacation accrual is based on term with the company. Yahoo employees accumulate two weeks in year one, three weeks in year two, and an additional day for each year worked thereafter. This is apart from 12 paid holidays a year.

Health Care:
Yahoo! offers health care coverage for employees and their entitled dependents.

Medical Insurance:
Yahoo offers its employees several plan choices which include: Aetna PPO, Open Choice; Aetna EPO, Elect Choice, Standard CPOS II and Kaiser HMO.

Dental Insurance:
Delta Dental – (DPO) with 100% preventative care coverage plus orthodontia for adults and children.

Vision Insurance:
Vision Service Plan (VSP): One examination and frames/lenses per year.

Income Protection:
Yahoo! provides basic life insurance to all employees at no cost (two times their annual salary).

Events

Fun is an integral part of life at Yahoo! In fact it’s almost one of the primary objectives. Apart from work, Yahoo employees busy themselves celebrating the successes of other Yahoos and enjoying at company events, which include:

Influential Speaker Series:
Yahoo! hosts a continuing speaker series which has invited well-known names like Tom Brokaw, Arnold Schwarzenegger, Tom Cruise, Steven Spielberg and Thomas Friedman. These stars visit Yahoo! to discuss a variety of current events with employees.

Quarterly All-Hands Meeting:
At the quarterly meetings Yahoos gather in the headquarters’ cafeteria to hear from top executives about company goals and objectives. There’s a unique way to honor employee accomplishments in the Yahoo! fashion. After every third quarter All-Hands Meeting, there’s an Oktoberfest celebration. It’s an entertaining and informative meeting that Yahoos around the world can also enjoy via web cast.
Music on the Green:
Yahoo! Music on the Green is one of the favorite pastimes. Its lunch and musical delight combined into one.

Camp Yahoo! Summer Picnic:
Every summers Yahoo employees enjoy a wonderful summer party. The Summer Picnic features food, games for adults and kids, music, swimming and good times for everyone.

Yahoo! at the Park:
Every summer, Yahoo employees are invited to bring their families to catch the San Jose Giants at Municipal Stadium in San Jose. A pre-game barbeque is available and the game is followed by fireworks.

Yahoo! Year-End Party:
The Yahoo! Year-End Party is one of the best company events around. Each December, Yahoo celebrates the past year’s achievements and prepares its employees for the challenges of the coming year. This themed party features live bands.

Take Your Daughters & Sons to Work Day:
A very interesting feature(its more appropriate to call it a feature than an event) is that Yahooligans ages 8 to 12 come on campus for a day to experience a little bit of life as a Yahoo employee. They get to hear about several Yahoo! products, see the campus, eat in the cafeteria with their parents and enjoy fun activities.

Holiday Gifts:
The founders, Jerry and David, personally thank each employee by giving them a special holiday gift. It’s can be a Yahoo! blanket, purple sleeping bag, MP3 player, gym bag or jacket all specially designed and branded for occasions.

Problems/Room for Improvement:

Currently Yahoo is ranked 44th in the list for most desirable companies (to work for), the ranking clearly suggests that there is room for improvement in the current prevailing norms and customs.

Certain identifiable problems that exist are:

Hierarchical Imbalance:
There are so many people in charge (or believe that they are in charge) that it’s not clear if anyone is in charge.

Strained Communication:
In the case of large corporations such as Yahoo, the propagation of information dictates how operations flow in terms of strategic and tactical planning as well as execution of initiatives. Large organizations tend to end up with contending (or redundant) initiatives surfacing and operating in the different parts of the company.

Conclusion

It is appropriate to conclude from the discussion cited above that even though Yahoo is striving hard to increase the job satisfaction of its employees but there are still some deficiencies such as hierarchical imbalance and strained communication. So if Yahoo improves on these fronts as well then its position in the list of “100 most desirable companies to work for” is sure to ascend.

Bibliography

  1. Yahoo! Company Information. Retrieved April 18, 2007, from YAHOO! Corporate Information Center Web site: http://info.yahoo.com/
  2. How big can you think? April 18, 2007, from Careers at Yahoo! Web site: http://careers.yahoo.com/
  3. Fortune Magazine on CNN Money. Retrieved April 18, 2007, from CNN Money Web site: www.money.cnn.com/fortune
  4. A Systemic Analysis of Yahoo: Parsing the Garlinghouse Letter. Retrieved April 18, 2007, from Eight Fat Swine Web site: http://www.eightfatswine.com/View.aspx?bid=15
  5. It started as 2 guys in a trailer Yahoo stands as one of Internet’s biggest success stories. Retrieved April 18, 2007, from San Francisco Chronicle Web site: http://www.sfgate.com/cgi-      bin/article.cgi?file=/chronicle/archive/2005/02/28/BUGJUBGR5D1.DTL&type=business

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Yahoo CEO

Daniel Loeb, a New York hedge fund manager and who owns a 5. Per cent stake In Yahoo, came out In open to share his view against the company and Scott Thompson. However, Dan Lyons at The Dally Beast supported Thompson. Yahoo was quick to call the mistake an “inadvertent errВ« but after increasing pressure the board hired an outside counsel for the investigation (Epitome J, 2012). Thompson, later on sent a memo to the employees apologizing for the scandal (Goldman D, & Epitome J, 2012) Was it appropriate for a giant like Yahoo to call the mistake an “inadvertent error”? I believe No. If you produce a zero error on your balance sheets, and In the internet services you provide o your customers then this reasoning would simply be a blunder. COOS actions were ethically irresponsible because he was breaching the trust of board of directors who had hired him, in this case, without verifying his credentials on resume. Also, socially irresponsible because there are investors, people who trust CEO and any such incident on his part does send a bad signal to them.

There are two things to debate upon – Should Yahoo have fired Scott Thompson the moment they found out that he lied on his resume? & Was It ethical on the part of Scott Thompson, considering the session he was In, to falsely claim the degree he never received? I would particularly like to be aggressive on each of the two questions. Yes, Yahoo should have immediately fired Scott Thompson the moment the allegations were verified. In doing so, the company would have set good example of holding good morals. The CEO is the top most level in any corporate the employees look up to, in terms of role model and as a leader. Any allegations on him could set a bad tone down the ladder In the company. Falling to fire him could have sent a bad signal at the lower order of getting way with the things and who knows many more such cases might show up in the near future. According to the consequentiality model, the only thing that matters is the consequence of your act. The act, whether right or wrong, decides the fate of the person and of the other people who should also bear the consequences (Moldavia, M).

The consequentiality model in this case did not apply to the Coo’s actions. The outburst of his lie cost him his Job and also put the reputation of Yahoo at stake, however on some level It could be argued that he was trying to Improve the existing condition of Yahoo, but not for too long. Also, that did not prove positive to any of the person in the company considering his short tenure. The share prices collapsed and the company was In the limelight for the wrong reason. Also, it is not ethical on the part of any CEO to make false claims in his resume. Had Scott rectified his resume and removed the Computer Science degree from It, exactly the same way have been much different now for Yahoo. Scott, during his short tenure at Yahoo took some crucial steps of laying off 14% of the employees (Lied, M, 2012) in an effort to improve the financial condition of the company. Had he been there for a longer period, he might have raised the company’s financial position and the situation would have been completely different.

However, his small act of not removing the false claim from his resume proved too costly for him and in turn for Yahoo. Communitarian’s theory of moral reasoning also has no application with Scott Thompson. The theory states to be true to your contracts, whether implicit or explicit, in which you willfully enter (Moldavia, M). However, in this case Scott Thompson signs in the annual report right below the line that says “This report does not contain NY untrue statement of a material fact. ” (Epitome J, 2012, Pl 73) This is complete contradiction to the theory of Communitarian’s. Another thing to notice is that Scott Thompson did not feel to resign from his position. Instead he sent an apology memo to all the employees (Goldman D, & Epitome J, 2012). Who knows, Yahoo might have not even accepted his resignation, owing to his future productive plans, similar to the case of Bausch & Lomb CEO Ronald Carmella, who placed his resignation, on account of false degree claims in his resume, to the board only to be later rejected and then e served another six years before retiring in 2008.

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Verizon Purchased Yahoo: What Does This Mean for You?

Table of contents

Yahoo is no longer an independent entity. Verizon has in a purchase that makes Verizon even larger than it was before. This broadband and cell phone company has quickly grown to become a major entity in the world of online marketing.

Advertisers have to take note whenever Verizon makes a move because it impacts them. Last year, the company  which gave it access to a range of technologies that allowed it to better target its ads.

So, how does the Verizon purchase impact advertisers?

The context

First, it’s important to understand the context of the purchase of Yahoo. The AOL of 2015 is much like the Yahoo of 2016. Both of these companies rose to become household names in the 1990s and early 2000s. When mobile arrived, however, they lost their relevance and were outmaneuvered by their most agile competitors. They still existed, but only as a shadow of their former selves.

Both websites focused on and deliver ads. Yahoo and AOL were the third- and sixth-most-visited web properties as recently as February 2016, for example.

With the range of web properties and brands acquired by Verizon through this deal, advertisers are going to have more opportunities to advertise than ever before.

Marketers can do deals directly.

Larger marketers previously had to make deals with brands through running their deal by multiple partners. This meant advertising deals could take a long time to carry out. Opportunities were lost and competitors were able to get a crucial advantage.

That will change because brands will be able to deal with Verizon directly. The fact that these brands are under Verizon means marketers and brands no longer have to deal with those specific brands.

For example, Google would no longer have to make a search deal with Yahoo. Were that deal formed today, Google would do the deal with Verizon, and that deal would likely incorporate the rest of Verizon’s brands, including AOL.

Now, Verizon fully intends on keeping its newly acquired Yahoo-associated brand alive, so there will be just as many advertising opportunities as before.

Mobile video will become even bigger.

When one looks at the , it’s easy to see why Verizon decided to make this deal. Marketers are taking advantage of mobile and they will soon be able to take advantage of a combined mobile network and content-marketing machine.

Yahoo comes with an enormous amount of content. And this is content people are still reading on a regular basis. With more and more people reading from a mobile device, an unprecedented opportunity presents itself for marketers to hit mobile browsers.

Verizon runs one of the largest mobile networks in the United States, and it’s widely expected that the company will combine its mobile network with a huge cache of content. The content footprint will be much bigger, as a result.

Advertisers will find it easier to track their results.

What a lot of people haven’t yet talked about is how Verizon has managed to gain control of the Yahoo Gemini ad platform and the mobile analytics suite Flurry. Flurry is the interesting acquisition for advertisers because it’s universally recognized as one of the better ones for tracking results.

Verizon hasn’t made any announcements on the future of Flurry, but if it intends on appealing to advertisers, it will either keep or rebrand it.

Data that advertisers use will be cleaner.

Advertisers always want clean and accurate data when they deal with a platform. Yahoo has always had the problem of hosting thousands of Yahoo Mail accounts that are out of data and unused. It’s widely expected that Verizon will clean these up to demonstrate to advertisers that the data it has is relevant.

This is good news for marketers because they will know exactly where they stand when it comes to the numbers they have at their disposal. It’s not yet known whether these accounts will simply be deleted, though.

Will the new Yahoo acquisition provide another viable advertising platform for marketers?

Despite the coming together of two big brands like Yahoo and AOL, the number of regular users is still lacking compared to those on Facebook and Google. There’s still no competition there, but that doesn’t mean marketers should completely discount using Verizon as an advertising platform.

at an exponential rate, and Verizon controls a huge amount of the mobile network in the United States. The leveraging of this huge network could make Verizon a “must have” for mobile advertisers in the coming years.

In the meantime, advertisers should continue to monitor the progress of Verizon, including any future acquisitions. 

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Yahoo Case Study

Report write-up on Yahoo Case study Yahoo was conceptualized almost accidentally in 1993 by Jerry Yang and David Filo – who were pursuing their electrical engineering degree from Stanford University – while posting a list of their favorite sites on the web, got officially founded in 1994 and incorporated in the year 1995. Initially named “Jerry’s guide to world wide web”, got later named Yahoo which was an acronym for “Yet another Hierarchal Officious Oracle”.

The term “Hierarchal” described how the Yahoo database was arranged, the term “officious” describing the many office workers who would use Yahoo from their work place and “oracle” suggesting a “source of wisdom”. Today Yahoo! Inc. is a multinational internet corporation best known for its web portal, search engine (Yahoo! Search, #2 in search engine market share with 6. 8% market share) and for a variety of other services, including Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Finance, Yahoo! Groups, Yahoo!

Answers, advertising, online mapping, video sharing, fantasy sports and its social media website. With revenue figures of $4. 9B for FY’2011, and a market capitalization of $23. 8B, Yahoo’s success story comprises many hits and more misses. After the modest web directory started to attract large influx of visitors on a daily basis, Yang and Filo decided to make business of it by renting advertising space on the Yahoo Directory pages. Capital Investment came in from Sequoia Capital, who proposed to hire a professional CEO to drive the business forward.

After a careful evaluation of a half-dozen candidates, Michael Moritz of Sequoia Capital chose Timothy Koogle, who brought 15 years of leadership experience in high-tech management. Timothy had to use great influence and persuasion skills to bring everybody on board on his vision for the company, one that would create a world connected via the web. His vision encompassed leveraging the company’s existing strength of the web directory by providing more and more compelling content and driving higher advertising revenue.

At the same time, create an online platform where buyers could meet sellers, transacting safely over the internet and charging a cut of the revenue for these services provided. They also added customization features for their registered users on their Yahoo financials page so that specific companies of interest could be followed by the users. Along the way, they also helped advertisers reach out to their relevant audience better and thereby increasing the value delivered to them. The strategy was working out very well for Yahoo. Yahoo grew rapidly throughout the 1990s.

It also made many high-profile acquisitions. While everything was going great for Yahoo, they failed to evaluate their strategy at that juncture. The environment they were thriving on was that of the dot-com bubble and most companies that were sources of advertising revenue for Yahoo were the dot-com companies. When the dot-com bubble burst, most of these companies went bankrupt drying out sources of advertising revenue for Yahoo. Its stock price skyrocketed during the dot-com bubble, Yahoo stocks closing at an all-time high of $118. 5 a share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $4. 05 on September 26, 2001. While the corporate level vision and strategy were forward looking, the business level strategy needed timely review, the lack of which brought about the downward spiral of Yahoo in a short p. Owing to a huge negative impact on the shareholders’ value, Tim Koogle resigned giving the heirs to Terry Semel, a former Warner Brothers executive.

Semel’s goal was to arrest the fall in Yahoo’s revenues by diversifying from the hitherto advertising centric revenue model to subscription-based, value-added services and increasing the quality in advertising revenue by targeting more stable companies. This strategy was viewed as but a late reaction to the changing market landscape, something that investors expected the leadership to foresee. Terry Semel also had his share of low moments as CEO of Yahoo during the criticism he drew for cooperating with the Chinese officials to release previously confidential Yahoo information to the Chinese government.

He also lost a chance to buy out Google during its nascent years, whose search engine services it used till Yahoo developed its own search engine technologies. Over the years, Yahoo also failed to catch the market trends of social, mobile, local, platform services etc. at the right times, which has resulted in diminishing market share figures in each of the spaces. While Yahoo revenue has dipped for the year 2011, the company’s financials look strong with low debt and good cash flow.

Company’s new management team is betting big on mobile and connected TV businesses. Mobile applications, where the company is lagging behind competitors like Google and Facebook, is a business line it must produce a turn-around performance on since the markets a trending in that direction. Marissa Mayer, former Google executive, who is now at the helm of the $5B company, would hope to bring her successful experience at Google to Yahoo to deliver the goods on the Mobile platforms business. Discussion Questions: . To what extent was the evolution of strategy at Yahoo planned? To what extent was it an emergent response to unforeseen events? Yahoo’s initial strategy during Koogle’s time of foraying into advertising and online portal for facilitating e-commerce and shopping were a planned strategy and were apt for the company with its inherent strengths. however, the portfolio diversification undertaken by Semel was an attempt to lower the risk exposure as a response to the changed business environment. 2.

Could Yahoo have done a better job of anticipating the slowdown in advertising revenue that occurred in 2000 – 2001 and positioning itself for that slowdown? How? What might it have done differently from a strategic planning perspective? In order to achieve a sustained competitive advantage, a firm must adapt to the change in the market trends. As a strategy evaluation process, yahoo could have foreseen the dot-com bubble burst as the bubble formation was a process that had initiated around ’98. Analysts highlighted the risk in staying invested with the dot-com companies.

There was surplus income available with retail investors during that period, which is suggestive of a trend of higher demand of normal goods / services over inferior goods / services. Yahoo could have seen this trend and positioned itself for a niche product / service offering. 3. Does Yahoo have a source of potential long-term competitive advantage? Where does this come from? Yahoo has a good cash flow – a low debt and also a business model in place for buyers to meet sellers. Social Media has played a key role in penetrating the market – creating awareness of using the online medium.

Yahoo has the system in place to capitalize this strength in order to optimally utilize the buyer-meet seller platform – expand it from retail presence to corporate interactions, include a model that addresses webinars for multiple industries eg pharma meet can be entirely conducted online – creating a significant cost advantage for the participants and also adding to its revenue by marginal investments that wont affect its balance sheet either. 4. What does Koogle’s resignation in May 2001 tell you about the role of a CEO in a public company?

CEO’s role in a public company has evolved over the years, but in essence, remains that of a custodian of the shareholders’ value. Koogle had a very good vision and strategy for the company, which did transpire into success initially. While the formulation of the strategy may have been done well, the execution at the business level and evaluation of the strategy could have been better. Even towards the end of Terry Semel’s tenure in 2006, his salary was reduced to only $1 (with $70M worth of stock options ofcourse) due to shareholders’ dissatisfaction.

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Yahoo – Strategic Management Analysis

EXECUTIVE SUMMARY Yahoo! Inc. , over its journey of almost 17 years has become the world’s largest online network integrated services provider with users exceeding 500 million in numbers worldwide (Yahoo FAQ, 2012). It has a presence in more than twenty markets and regions across the globe and is best known for its search engine and host of other services like finance, e-mail, advertising and social media. Yahoo! Inc. was started as a personal website directory by two doctorate candidates at Stanford University named David Filo and Jerry Yang.

Filo and Yang realized the potential of generating revenue from their web directory by allowing companies to advertise their products on their online directory. Soon, Yahoo was notable enough to gain the attention of Sequoia capital, a venture capital firm. Sequoia provided much needed capital to Yahoo and Tim Koogle, a Motorola executive was hired as Yahoo’s Chief Executive Officer. Koogle’s excellent management skills and vision took Yahoo to the new heights of success i. . Yahoo! Inc. ’s stock price rose from $5 a share to almost $244 a share in 1999 (Jones, 2007) However, despite the leadership that the company enjoyed in its initial years, the company over the past years seems be losing market share to its arch rival Google Inc. Google has been outdoing Yahoo for the past many years now, gaining market share and increasing its customer base manifolds. Over the course of past few years, Yahoo! Inc. ade a slew of changes in its objectives, business model and to its external, internal environment and strategy to shore up its performance and regain lost ground to its main competitor Google. Herein, we shall take a close look at some of such factors through defining the company’s mandate, internal analysis as well as external analysis. INTRODUCTION The company under consideration Yahoo! Inc. (referred to hereinafter as “Yahoo”) is one of the world’s largest online network integrated services provider with a combined user base in excess of 500 million.

Yahoo provides a whole host of network based services, however over its existence of past 17 years, many such similar service providers have shored up especially after the dot com boom. Some of these new players took the path of specializing in a particular form of service while others brought a whole gamut of new services with the old ones. World Wide Web has grown exponentially over the past years giving rise to the intense rivalry between companies involved. This intense rivalry especially with the likes of Google is one of the biggest challenges for Yahoo.

In this case study, we try to first understand the backdrop in which the company is operating including its mission and vision for the future, its ultimate goals and philosophy regarding its business, its business model, external analysis based on Porter’s five forces model and finally internal analysis based on distinctive competencies, competitive advantage and profitability. This document is prepared based on the information provided in the case, “Yahoo” (Jones, 2007) as well as numerous external sources such as Yahoo’s website and its annual reports circa 2011. COMPANY OVERVIEW

Yahoo was incorporated as an Internet service provider that would serve both the users and the businesses globally. Yahoo was founded by two Stanford PhD candidates in January 1994 named Jerry Yang and David Filo. However, today Yahoo has become one of the world’s largest global online network integrated services provider. Yahoo today has a user base of 500 million per month. It has a presence in more than 30 countries worldwide and provides services in more than twenty different languages. The company presently operates out of Sunnyvale, California in the United States.

Yahoo first went public on the NASDAQ (YHOO) in the April of 1996. The stock had opened for $ 13. 00 per share of the company and by the very day’s end; it had reached a closing of $ 33. 00 per share (Yahoo Overview, 2012). In Dec 1999 the company was also added to the S&P 500 index. Recently, in early 2012, Yahoo had appointed Scott Thompson as the new CEO who was then replaced by Marissa Mayer in the month of May (Perez, 2012). Also in June 2012, the company also hired the former director at Google, Michael Barrett, as its Chief Revenue Officer.

In April 2012, the company announced a cut of about 14 % of its workforce. This was expected to save the company around $ 375 million annually and is scheduled to be completed by end of this year (Liedtke, 2012). MANDATE The mandate of a company sheds light on why it exists, what it hopes to achieve in reference to the expectations of the stakeholders. Yahoo changed it mission statement from just “focusing on being a search portal” to “want to connect people to their passion, communities and world’s knowledge” (Baker, 2007).

Yahoo’s mission Statement refers to the fact that the company envisages to achieve two major objectives; first one is to provide personal digital experience to their customers so that they remain happy doing things they like especially in the web and secondly to provide a unique way to the advertiser to connect to the consumers and help to build their business (Yahoo FAQ, 2012). In simple terms, as Yahoo enables people to connect with their passion in various fields i. e. sports, music etc. , it will in turn provide Yahoo with an excellent opportunity to generate advertising revenue from music and sports companies etc.

The core values of the company provide a sense of direction that the company adheres to and the way it is going to do it, and the goals it wishes to achieve via the same. The company on its website has outlined six Core values that drive the company forward. These are namely (Yahoo Values, 2004). a. Excellence: The Company mentions of it always seeking quality and knowing that the success should never be taken for granted and hence learn from own mistakes. b. Innovation: The Company believes in creativity and is ready to adapt to change in market trends and respond with calculated and responsible steps. c.

Customer Fixation: The Company is always looking to maintain the trust of the customers and respond to the customers need and try to exceed them. d. Teamwork: The Company believes in and tries to encourage the best of the ideas from the entire organization and to foster collaboration and yet maintain individual accountability. e. Community: The Company seeks to serve both communities globally and the Internet Community as a whole in general. f. Fun: The Company also possesses a sense of humour and believe that the same is essential to the success of the company and also do appreciate and celebrate their achievement.

From the aforementioned Core Values and the present scenario of the company, it seems Yahoo’s main challenge is keep up with its two very important core values namely Innovation and Customer Fixation which are integral for it to be the market leader in web portal industry. The main stakeholders of Yahoo are; its stockholders that invest their capital in the company, customers that use Yahoo’s web portal, advertisers that market their products through Yahoo’s online services and employees who provide it intellectual capacity leading to the creation of innovative new online products and services.

Yahoo’s employees want a fair, ethical treatment and a stable job, advertisers expect to connect to their market segment by advertising on Yahoo, customers want enjoyable and innovative products that make their daily life easier and most importantly stock holders have an expectation that Yahoo will pursue strategies that increase company’s revenue and profitability maximizing shareholder value. EXTERNAL ANALYSIS COMPETITIVE FORCES

Yahoo operates in “the Internet products, services, and content markets, which are highly competitive and characterized by rapid change, emerging and converging technologies, and increasing competition” and that their most significant competition is from “Facebook, Google, Microsoft, and AOL (Yahoo 10K, 2011). Yahoo is a part of web portal industry where revenue generation is dependent on online advertising which in turn requires a large number of user base to generate any significant revenue.

Advertisers prefer to advertise their products through web portals that have a large user base and offer products and tools which help them reach their target audience. In web portal industry, degree of rivalry amongst competitors is quite high, competitors compete aggressively against each other through innovative new product offerings and/or by lowering prices for advertising but Product differentiation is becoming increasingly difficult due to the fact that over the years industry has gone through consolidation and main players such as Google, Yahoo, MSN etc. ave gained a significant amount of market share creating an oligopoly. Industry has entered a mature stage in the western hemisphere such as Europe and North America but a lot of potential is available in emerging markets of Asia and South America where it is in growth stage. Due to the nature of internet, entry in to the web portal industry is relatively easy but based on the amount of capital, innovative skills and technological knowledge required to attract and maintain a large user base in the web portal industry, the threat of new entrants that can compete directly with Yahoo is quite low.

Yahoo does charge some fees for certain premium services but generally its main services such as email and search are free of cost which is common amongst competitors in web portal industry. The range of services offered in web portal at little or no cost means that switching cost for users is quite low. Buyers also include those advertisers who would buy ad space on the website. Even though Yahoo’s revenue stream is not concentrated at any individual advertiser or user but low switching costs for users combined with the intense rivalry in the industry to gain advertisers puts bargaining power of the buyers at medium.

Yahoo’s search engine essentially is a mechanism that provides users with an ability to search through content present on the internet. This content is freely available on the internet for Yahoo to collect and categories hence supplier power for Yahoo’s search engine is quite low. Web portal industry in which Yahoo operates does not have a lot of substitutes. Some possible substitutes for Yahoo’s products and services are; postal service is substitute of Yahoo’s e-mail service, financial newspapers are a substitute for Yahoo’s financial section, etc. but most importantly there are no efficient substitutes for search engines on web portal industry in both online or offline world. Because of the lack of efficiency of substitutes to products and services offered by web portal industry, the threat of substitutes is low. Recently Web portal industry has gained a possible complementor in the form of latest smart phones with high speed mobile internet access which gives user an ability to be online at any place at any given time. Smart phone technology combined with the web portal industry gives both parties involved a better opportunity to satisfy customer demands.

MACRO ENVIRONMENT Aforementioned analysis was based on Porter’s five forces model which is subject to macro-environment. We shall now analyse different forces in the macro-environment. Economic conditions might affect Yahoo as it derives most of its revenue from businesses and individuals who advertise their products and services on the internet. Any slump in the economic growth may lead to a reduction in advertising budget of businesses which will eventually affect Yahoo. In the emerging markets such as those in Asia and South America, Yahoo is presented with an excellent opportunity to expand its business.

Along with the opportunity, Yahoo may also face stiff competition in emerging markets such as China where local competitors have gained considerable market share i. e. Baidu, Inc. in China has 63% of the market share and is Yahoo’s main competitor in that region (Barboza, 2010). Political and legal forces tend to affect businesses operating in the web portal industry especially in the emerging markets. Regulations on the internet service providers generally vary from country to country i. e. in certain countries local providers enjoy special protection through regulations giving them competitive advantage over Yahoo.

Yahoo was successfully sued in France for its failure to keep Nazi memorabilia off its Web pages as it is considered a crime in France (Claburn, 2006) and in 2010 Google pulled out of China after failing to negotiate with Chinese government (Carlson, 2010). Internet is a rapidly growing industry, and with low barriers to entry and low switching costs, technological forces heavily influence Yahoo. With the advent of new technologies, competition and rivalry between players in web portal industry is likely to be more intense driving down revenues as a result.

Development in technology may give rise to newer forms of advertising media which can potentially take away revenue from Yahoo. Yahoo mainly operates in the online world and number of users with access to internet is growing rapidly and user base in the developed countries is very well spread out across all demographics. More and more people in the developing countries are getting access to the internet which is likely an opportunity for Yahoo. INTERNAL ANALYSIS We shall now discuss the internal environment of the company and how can it have any sort of material impact on the performance of the company.

The internal Analysis of the company would include the distinctive competencies of the company, the competitive advantage and the profitability of the company. The first and foremost distinctive competency of the company is the ability to enable people relate to their passion. This is as per Yahoo’s mission statement and is also reflective in the product portfolio. The company is probably the leader in the industry in terms of the number of services and products that the company offers. This range of product offering has not been observed to be present with the other competitors i. e. Flickr, a omprehensive imaging database, Yahoo Finance provides accurate financial Data in almost real time, etc. The second distinctive competency of the company is the brand name of the company, which has helped it retain its users despite its consistent problem in bringing new innovative products like its competitors Google and Facebook. The third and most important is the efficiency of Yahoo marketing services and its ability to attract customers and publishers. Since its beginning the business model of Yahoo has been heavily reliant on contextual advertising and offering premium services.

And this segment of business of Yahoo has still kept it in business. And not to forget the next competency of the company is its famous search and portal. Though the search algorithm used by the company has gradually been updated to the changing demographics of the business, but still some work needs to be done on it to make it a sheer strength for the company. Yahoo still possesses some competitive advantage as compared to its rivals. Firstly, Yahoo’s directory is very well-structured and authenticated business library and it can be developed and customized to act as a new and good source of revenue.

Second is the ability of Yahoo to provide customized and contextual advertising. Another very important competitive advantage of the company is the hold of Yahoo in the mobile segment with its auxiliary products and even partnerships with third party service providers. And probably last but not the least is the employees of the company, who proved tremendous support, and technical knowhow, that helps Yahoo shore up with customized solutions for its customers and also help in maintain a virtually glitch/hassle free website quality.

As far as profitability is concerned, this is something that has not been going right for the company. Over the past four quarters, the company has not seen any significant growth in its revenue and has in fact witnessed a decline in the operating profitability due to a rise in non-recurring expenses (Yahoo Income Statement, 2012). However since the new CEO took over in the month of July, she has embarked on a new strategy of Brownfield expansion via the M&A route and other critical decisions, that is set “to revive growth and boost profitability” which is a very positive and ncouraging news for investors (Womack, 2012). Yahoo’s decision to hire executives Michael Barret as a CFO and Marissa Mayer as a CEO seems to show that Yahoo understands the threat that Google poses as both Barret and Mayer were executive at Google prior to joining Yahoo. From the above analysis, it seems that the company is better poised on its internal environment than external environment. And it needs to improvise on its assets and brand to shore up its market share and performance.

Yahoo’s recent layoff of 14% of its work force seems to be beginning of new strategy of refocusing the company towards its core competencies, product innovation and growth. REFERENCES Yahoo FAQs. (2012). Investors FAQs. Retrieved from http://yhoo. client. shareholder. com/faq. cfm Jones, G. R. (2007). Yahoo. In C. W. L. Hill & G. R. Jones (Eds. ), Strategic Management An Integrated Approach (8th ed. , pp. C102-C114). Boston, NY: Houghton Mifflin Company. Yahoo Overview. (2012). Overview. Retrieved from http://pressroom. yahoo. net/pr/ycorp/overview. aspx Perez, J. C. (2012, 07 16).

Yahoo picks google’s marissa mayer as ceo. Macworld, Retrieved from http://www. macworld. com/article/1167728/yahoo_picks_googles_marissa_mayer_as_ceo. html Liedtke, M. (2012, 04 04). New yahoo CEO Scott Thompson cuts 2,000 jobs The Christian Science Monitor, Retrieved from http://www. csmonitor. com/Innovation/Latest-News-Wires/2012/0404/New-Yahoo-CEO-Scott-Thompson-cuts-2-000-jobs Baker, L. (2010). Yahoo ; google’s mission statements: Do they connect?. Search Engine Journal, Retrieved from http://www. searchenginejournal. com/yahoo-googles-mission-statements-do-they-connect/4924/

Yahoo Values. (2004). Yahoo! we value. Retrieved from http://docs. yahoo. com/info/values/ Yahoo 10K. (2011, 12 31). Yahoo 10k Annual Report. Retrieved from http://files. shareholder. com/downloads/YHOO/2120211742x0xS1193125-12-86972/1011006/filing. pdf Barboza, D. (2010, 01 13). Baidu’s gain from departure could be china’s loss. The NewYork Times. Retrieved from http://www. nytimes. com/2010/01/14/technology/companies/14baidu. html? _r=1 Claburn, T. (2006, 01 13). Yahoo loses lawsuit over nazi memorabilia sale. Information Week, Retrieved from http://www. informationweek. om/yahoo-loses-lawsuit-over-nazi-memorabili/177100347 Carlson, N. (2010, 03 22). Breaking: Google pulls out of china. Business Insider, Retrieved from http://articles. businessinsider. com/2010-03-22/tech/29990556_1_google-com-hk-google-s-china-googlecn Yahoo Income Statement. (2012). Income statement. Retrieved from http://in. finance. yahoo. com/q/is? s=YHOO Womack, B. (2012, 08 10). Yahoo strategy review may result in changes to cash plans. Bloomberg, Retrieved from http://www. bloomberg. com/news/2012-08-09/yahoo-ceo-strategy-review-may-result-in-changes-to-cash-plans. html

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