Question

What is the successful business model of Yahoo? Please conduct a SWOT analysis on Yahoo as compared to Google. Explain your answer in details in a form of an essay (400-10000 words)

Answer 1

Yahoo’s Business Model :- Most of Yahoo’s business model was redundant in a sated marketplace. Almost every Yahoo service has a more prominent, more successful, and more easily identifiable competitor: Yahoo Movies (NBC Universal’s Fandango), Yahoo Weather (Weather.com, another NBC Universal property), Yahoo Sports (Walt Disney Co.’s (DIS) ESPN.com), Yahoo Screen (Alphabet’s YouTube), and the list goes on and on.

• Customer Segments:- Yahoo provides products and services to the mass consumer market, to online advertisers and to publishers and developers. Its online portal – which provides news and sports updates, search tools, directory information, shopping, and email services – can be accessed by anyone with an internet connection. Yahoo’s more targeted offerings appeal to smaller, niche consumer markets, including small businesses, financial professionals, recruiters and job-seekers.
• Value Propositions:- To its consumers, Yahoo’s most significant value proposition is its varied suite of free-to-use services and apps, notably its email service and news portals. As an online brand – the services of which are available both through desktop browsers, mobile browsers and mobile apps – convenience is also a major factor.
• Channels:- Yahoo’s online portal is accessible via its desktop and mobile websites, as well as through its multiple Apple iOS and Google Play apps for email, news, messaging, sports, finance, weather, and fantasy sports, among others. Many of Yahoo’s products are also available through the Company’s multi-product sales team.
• Cost Structure:- Yahoo’s most substantial costs come in relation to the maintenance of its technology infrastructure, the operations of its sales and marketing team and personnel costs. Costs are incurred by renting server space, operating data centers, and running sales and marketing and research and development teams, as well as managing the Company’s various partnerships. Yahoo also operates numerous regional offices worldwide, all of which accrue fixed operational costs including office space rental and utilities.

SWOT Analysis:-

The swot analysis of Yahoo discusses the strengths, weaknesses, threats and opportunities for the internet marketing giant. Although Yahoo has been left far behind by google and face book, at one time it was in contention for internet dominance. Here is the internal analysis of Yahoo.

Strengths:-

• Yahoo has the maximum number of users and most of revenue is generated through ads in yahoo mail
• Due to its large mail subscriber base, yahoo is considered to be the powerful marketing company
• Yahoo is known for its web portal, search engine, yahoo finance, yahoo answers, yahoo mail, yahoo directory etc
• Its product portfolio includes yahoo messenger, yahoo mail, yahoo personals, yahoo 360, Delicious, Fickr, Yahoo Buzz, yahoo Mobile, yahoo shopping, yahoo real estate, yahoo next, yahoo boss, yahoo meme, Y! connect Etc.

Weaknesses:-

• As per Jan 2012 data, a survey says Yahoo’s market share in search engine is only 6%
• Google already has 83% market share and the immediate competitors are Baidu which has same 6% and bing has 4% in search engine
• Yahoo is losing its market share in mailing services very gradually due to Google’s strong presence in search engine market and it related product portfolio complementing to search engine services
• Mail services, news, shopping, financial data and business directory services are provided by many others like MSN, CNN, e-bay, Money control etc.

Opportunities:-

• Yahoo Directory is the most structured and authenticated business directory, any customized development to its user in this will lead to flow of new revenue to the company
• The number of mobile users is constantly increasing in developing nations. Development of Yahoo! Mobile wap services will improve the market share
• Advertising in social media and internet has become essential element for every commodity
• Yahoo has huge potential in combining its services with social media platforms like Flickr etc.

Threats:-

• The biggest threat for any global service provider on the internet is increasing competitions in the local market especially China
• Another major threat is addressing of the cultural issues while going to foreign market
• Yahoo’s presence in the search engine services is declining very rapidly because of Google’s strong presence
• The number of competitors is increasing of new innovations in the internet space by young entrepreneurs.

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