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  1. 1. Yahoo?: Business on Internet Time By Girotte and Rivkin
  2. 2. Timing is now everything <ul><li>What is the difference between strategy and tactics in Internet time? </li></ul><ul><li>Strategy used to be long term, maybe 3 to 5 years. Can you keep a strategy that long when competition changes their offerings weekly or monthly? </li></ul>
  3. 3. Competitive Landscape <ul><li>@Home acquires Excite (Yahoo!’s arch rival) </li></ul><ul><ul><li>Offered high-speed cable access to the Internet </li></ul></ul><ul><li>AOL acquired Netscape </li></ul><ul><ul><li>Netscape owned a browser </li></ul></ul><ul><ul><li>Netcenter was popular portal </li></ul></ul><ul><li>Disney took stake in Infoseek </li></ul><ul><li>NBC allied with SNAP </li></ul><ul><li>Lycos was in merger talks </li></ul>
  4. 4. When do you change strategy? <ul><li>When KSFs change. </li></ul><ul><li>When customer requirements change. </li></ul><ul><li>When competitive requirements change. </li></ul><ul><li>When other assumptions/requirments change. </li></ul>
  5. 5. Yahoo!’s Strategy <ul><li>Provide one-stop access to anything that someone might need. </li></ul><ul><ul><li>Find anything </li></ul></ul><ul><ul><li>Locate anyone </li></ul></ul><ul><ul><li>Buy anything </li></ul></ul><ul><li>Generate revenue from advertising and deliver users to vendors’ sites. </li></ul>
  6. 6. Internet & the WWW <ul><li>Started by DoD for military and its vendors in 1960s. </li></ul><ul><li>HTML standard set in 1991 for describing computer documents. </li></ul><ul><li>Browser developed in 1994 by James Clark (Netscape founder). </li></ul><ul><li>By 1999, 100 million Internet users, and 43 million host computers & 367 million PCs on the Web. </li></ul>
  7. 7. Portals <ul><li>“ Second most meaningless word in Netspeak” </li></ul><ul><li>Search engine spiders found latest Web sites (Lycos, Infoseek & Alta Vista). </li></ul><ul><li>Navigation sites classified Web sites like libraries classify books (Yahoo! & Excite). </li></ul><ul><ul><li>News, sports, stocks. </li></ul></ul><ul><ul><li>Email and personal home pages </li></ul></ul><ul><ul><li>Auctions, shopping, financial services. </li></ul></ul><ul><ul><li>Chat rooms and communities </li></ul></ul>
  8. 8. Portal Customers <ul><li>Non-paying users of Portals (48% men, 34% women, 18% children). </li></ul><ul><ul><li>Searching </li></ul></ul><ul><ul><li>Communicating </li></ul></ul><ul><ul><li>Exploring </li></ul></ul><ul><li>Corporations paying to attract sale of products and services (display ads or links). </li></ul><ul><ul><li>$2 billion in 1998 (52% through portals) </li></ul></ul><ul><ul><li>$5 to $200, main page vs targeted placement </li></ul></ul><ul><ul><li>2% to 30% referral fees </li></ul></ul>
  9. 9. Portal Suppliers <ul><li>Information providers, like news, get monthly fees ($2,500 to $20,000) </li></ul><ul><li>Advertising media (50% of revenues spent to build brand awareness) </li></ul><ul><li>Labor ($100,000 to $200,000 for programmers) </li></ul><ul><li>Technology for financial transactions, email and instant messaging, & home page development tools. </li></ul>
  10. 10. Leading Portals Yahoo! Excite MSN Lycos Infoseek Netcenter Snap Customers Require: PC Modem Subscription <ul><li>Access </li></ul><ul><li>Providers: </li></ul><ul><li>Broadband </li></ul><ul><li>(Media One, @Home) </li></ul><ul><li>Dial-up </li></ul><ul><li>(AOL, AT&T Worldnet) </li></ul><ul><li>Wireless </li></ul><ul><li>Direct at Work </li></ul><ul><li>Vertical Sites: </li></ul><ul><li>Techn news </li></ul><ul><li>(CNET, ZDNet) </li></ul><ul><li>Sports </li></ul><ul><li>(ESPN) </li></ul><ul><li>Personal finance </li></ul><ul><li>( </li></ul><ul><li>Mass Content: </li></ul><ul><li>43 million connected computers </li></ul>Consumer buy PC & modem Subscribe to Access Provider Set default Portal Go to Vertical Site of interest Other Sites
  11. 11. Yahoo! Results <ul><li>Bring people together for content, commerce, communications, and community offerings. </li></ul><ul><li>My Yahoo! With tailored ads, chat rooms, and news wires. </li></ul><ul><li>Country specific portals. </li></ul><ul><li>167 million page views per day in 12/98. </li></ul><ul><li>50 million viewers </li></ul><ul><li>2,225 companies buying ads </li></ul>
  12. 12. Yahoo! Properties Common look and feel <ul><li>Navigation properties to find relevant information (categories of information). </li></ul><ul><li>Community properties to facilitate contacts and communication (address book, email, chats, message boards). </li></ul><ul><li>Personalization properties (MyYahoo! for personal links). </li></ul><ul><li>Electronic Commerce Properties (shop, travel, real estate) </li></ul><ul><li>International properties (local language and sites) </li></ul>
  13. 13. Yahoo! Operations <ul><li>Tight space helps communication and keeps costs down. </li></ul><ul><li>Organization (Exhibit 11) by expertise </li></ul><ul><ul><li>Property development: (Production, Engineering, Surfing) </li></ul></ul><ul><ul><li>Marketing and Sales: (Business development, Brand marketing, Sales) </li></ul></ul><ul><ul><li>International </li></ul></ul><ul><li>Partnerships for distribution (like AT&T WorldNet, E*Trade, NPR, Fox sports) </li></ul>
  14. 14. Yahoo! Planning <ul><li>Stay 60 days “ahead of the competition” </li></ul>
  15. 15. Competition (Exhibits 13 & 14) <ul><li>Access and Content Providers </li></ul><ul><ul><li>AOL/Netscape has largest captive market of 14 million subscribers (Netscape had been late to set up a Portal) </li></ul></ul><ul><ul><li>MSN (2 million subscribers) imitates AOL (deal between AOL to use IE as default, for AOL on desktop) </li></ul></ul><ul><ul><li>@Home/Excite (330,000 subscribers) accessed 19 cable providers passing 60 million homes </li></ul></ul>
  16. 16. Competition <ul><li>Portals with Media Partners </li></ul><ul><ul><li>Disney/Infoseek were 8 th and 9 th most popular sites. </li></ul></ul><ul><ul><li>NBC/Snap accessed CNET, MSNBC and CNBC. </li></ul></ul><ul><li>Independent Portals </li></ul><ul><ul><li>Lycos Network with HotBot search engine </li></ul></ul><ul><ul><li>AltaVista takes DEC’s search engine public </li></ul></ul>
  17. 17. What future actions? (Exhibit 13) <ul><li>What new partners? Suppliers? Customers? </li></ul><ul><li>What new features? </li></ul><ul><li>What content providers? </li></ul><ul><li>What capabilities? Security? Transactions? </li></ul><ul><li>What acquisitions? </li></ul><ul><li>What income streams? </li></ul><ul><li>What future strategy? When will you know it? </li></ul>