Yahoo: Business on Internet Time

1
Yahoo? Business on Internet Time

• By
• Girotte and Rivkin

2
Timing is now everything

• What is the difference between strategy and
  tactics in Internet time?
  
• 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?

3
Competitive Landscape

• _at_Home acquires Excite (Yahoo!s arch rival)
• Offered high-speed cable access to the Internet
• AOL acquired Netscape
• Netscape owned a browser
• Netcenter was popular portal
• Disney took stake in Infoseek
• NBC allied with SNAP
• Lycos was in merger talks

4
When do you change strategy?

• When KSFs change.
• When customer requirements change.
• When competitive requirements change.
• When other assumptions/requirments change.

5
Yahoo!s Strategy

• Provide one-stop access to anything that someone
  might need.
  
• Find anything
• Locate anyone
• Buy anything
• Generate revenue from advertising and deliver
  users to vendors sites.

6
Internet the WWW

• Started by DoD for military and its vendors in
  1960s.
  
• HTML standard set in 1991 for describing computer
  documents.
  
• Browser developed in 1994 by James Clark
  (Netscape founder).
  
• By 1999, 100 million Internet users, and 43
  million host computers 367 million PCs on the
  Web.

7
Portals

• Second most meaningless word in Netspeak
• Search engine spiders found latest Web sites
  (Lycos, Infoseek Alta Vista).
  
• Navigation sites classified Web sites like
  libraries classify books (Yahoo! Excite).
  
• News, sports, stocks.
• Email and personal home pages
• Auctions, shopping, financial services.
• Chat rooms and communities

8
Portal Customers

• Non-paying users of Portals (48 men, 34 women,
  18 children).
  
• Searching
• Communicating
• Exploring
• Corporations paying to attract sale of products
  and services (display ads or links).
  
• 2 billion in 1998 (52 through portals)
• 5 to 200, main page vs targeted placement
• 2 to 30 referral fees

9
Portal Suppliers

• Information providers, like news, get monthly
  fees (2,500 to 20,000)
  
• Advertising media (50 of revenues spent to build
  brand awareness)
  
• Labor (100,000 to 200,000 for programmers)
• Technology for financial transactions, email and
  instant messaging, home page development tools.

10
Leading Portals
Yahoo! AOL.com Excite MSN Lycos Infoseek N
etcenter
Snap

• Access
• Providers
• Broadband
• (Media One, _at_Home)
• Dial-up
• (AOL, ATT Worldnet)
• Wireless
• Direct at Work

Customers Require PC Modem Subscription

• Vertical Sites
• Techn news
• (CNET, ZDNet)
• Sports
• (ESPN)
• Personal finance
• (Quicken.com)

• Mass Content
• 43 million connected computers

Set default Portal
Other Sites
Subscribe to Access Provider
Go to Vertical Site of interest
Consumer buy PC modem
11
Yahoo! Results

• Bring people together for content, commerce,
  communications, and community offerings.
  
• My Yahoo! With tailored ads, chat rooms, and news
  wires.
  
• Country specific portals.
• 167 million page views per day in 12/98.
• 50 million viewers
• 2,225 companies buying ads

12
Yahoo! Properties Common look and feel

• Navigation properties to find relevant
  information (categories of information).
  
• Community properties to facilitate contacts and
  communication (address book, email, chats,
  message boards).
  
• Personalization properties (MyYahoo! for personal
  links).
  
• Electronic Commerce Properties (shop, travel,
  real estate)
  
• International properties (local language and
  sites)

13
Yahoo! Operations

• Tight space helps communication and keeps costs
  down.
  
• Organization (Exhibit 11) by expertise
• Property development (Production, Engineering,
  Surfing)
  
• Marketing and Sales (Business development, Brand
  marketing, Sales)
  
• International
• Partnerships for distribution (like ATT
  WorldNet, ETrade, NPR, Fox sports)

14
Yahoo! Planning

• Stay 60 days ahead of the competition

15
Competition (Exhibits 13 14)

• Access and Content Providers
• AOL/Netscape has largest captive market of 14
  million subscribers (Netscape had been late to
  set up a Portal)
  
• MSN (2 million subscribers) imitates AOL (deal
  between AOL to use IE as default, for AOL on
  desktop)
  
• _at_Home/Excite (330,000 subscribers) accessed 19
  cable providers passing 60 million homes

16
Competition

• Portals with Media Partners
• Disney/Infoseek were 8th and 9th most popular
  sites.
  
• NBC/Snap accessed CNET, MSNBC and CNBC.
• Independent Portals
• Lycos Network with HotBot search engine
• AltaVista takes DECs search engine public

17
What future actions? (Exhibit 13)

• What new partners? Suppliers? Customers?
• What new features?
• What content providers?
• What capabilities? Security? Transactions?
• What acquisitions?
• What income streams?
• What future strategy? When will you know it?