Strategic analysis of "Yahoo!"

Résumé du document

There are more Yahoo! Mail users around the world than two times the population of Mexico” (Yahoo! Website, 2008).

One cannot deny the success of Yahoo! over the last decade. However, the reason why Yahoo! is catching a lot of media attention today does not lie in its success but more on its uncertain future. Will Microsoft take over Yahoo!? Will Yahoo! privilege a partnership with Google or AOL? Whatever decision Yahoo! takes, it will certainly have an impact on the whole Internet industry. Therefore, it is worthwhile and challenging to carry out a strategic analysis of Yahoo!. That is the reason why we choose Yahoo!.

In the first part of this paper, we will briefly give the company's overview; we will explain its history and the strategic issues it faces today.
In order to understand Yahoo!'s position, we will present an analysis of its external environment through the PESTEL and the MICHAEL PORTER's 5 FORCES models. We will also focus on the internal issues using the SWOT and the ‘Strategic Drift' analyses.

Finally, we will bring to light the different strategic directions that Yahoo! can consider. More precisely, we will analyze the opportunities of a potential Microsoft takeover and see how it impacts Yahoo!'s BCG MATRIX. Thanks to the ‘Cultural Web' model, we will also discuss the cultural compatibility of the two companies. We will then turn to other strategic directions that Yahoo! can take. We will especially focus on a partnership with Google and an acquisition of AOL.

Extraits

[...] acquired commerce companies, Internet online services, and online advertising companies in order to enhance the overall product portfolio of the company. Project PANAMA In 2006, Yahoo! launched a new search marketing system: Project Panama. The new search marketing system is expected to provide a more relevant search experience to users, more valuable customer leads to advertisers, and additional opportunities to its distribution partners. Yahoo!'s new search marketing system, coupled with the growth of the Internet as an advertising medium could increase the company's revenues in future.( Forbes Website 2006). New services Yahoo! launched new services such as Yahoo! Answers, Yahoo! [...]

[...] This will enable us to identify the key drivers of change for Yahoo!, thus providing scenarios for any strategy that Yahoo! might need to change or implement. Political Encounters restrictions from governments regarding sharing of information with third parties. Pressure from human rights organizations and media groups in making available the personal details of customers. In China, however, Yahoo! cooperates with the authorities (Gunther 2006). Currently, Yahoo! has antitrust clearance for its search and advertising division with other companies such as Google. Economic More businesses are moving into the internet domain, with increasing transactions across companies. [...]

[...] suffered, but at least was one of the few surviving Internet companies after the explosion of the dot-com bubble. After this period, Yahoo! continued its strategy of growth and expansion through acquisition and diverse partnerships with telecommunications and internet providers. Yahoo! also continued to extend its range of services (music, photo sharing, blogging, social networking services etc). The intensification of the competition in the internet businesses disarmed numerous companies, allowing only the big and strong companies to survive. Since 2007, Yahoo! seems to be facing difficulties from the Internet giant Google Strategic issues that Yahoo! [...]

[...] Organizational Structure Yahoo! is a Silicon Valley archetype where workers sit in cubicles and tend to work collaboratively. Even though the organization has a hierarchical structure, the relationships between employees are more horizontal than vertical. Yahoo! tends to be more collaborative, ‘sometimes to the point of inefficiency' (NEWS.com, 2008). By contrast, Microsoft has been a company of offices, where workers toil individually at their stage of a collective project. Microsoft is also known for being hard-charging and competitive, both internally and externally (NEWS.com, 2008). [...]

[...] Our strategic analysis showed that Yahoo! has opportunities to improve its current position. If the company manages to stay in line with the changing environment, it may have a chance to compete with Google. We pointed out that, in order to be a leader in the Internet and media industry, Yahoo! needs to lead an acquisition strategy and find appropriate partners to expand its presence on the web. By not accepting Microsoft's proposal, Yahoo! has probably rejected an offer which would have had a major impact on the internet and media sector. [...]