Even
the top MBA Colleges in Delhi NCR that are so far away from the hot spot of
action are virtually awaiting tragic news. It is almost as if the writing is
there on the wall for everyone to see and yet investors, bankers, stock brokers
and media are just hoping against hope for a last minute miracle to salvage the
fortunes of one of the earliest internet companies in Silicon Valley. At Ishan
Institute of Management & Technology, one of the top MBA Colleges in
Greater Noida, Delhi NCR the academicians and students have been watching at
the turn of events with fingers crossed trying to soak in as much knowledge as
we can. While the demise of the most ancient internet company is not exactly an
opportune moment to learn, it makes enormous good sense to assert that analysis
of business is required in order to prevent a recurrence of such phenomenon in
India or anywhere else in the world.
A Brief History of Yahoo
Yahoo
is indeed one of the most ancient companies in the internet industry. Having
been established by two Stanford students Jerry Yang and David Filo, the
company is headquartered in Sunnywale, California, U.S. Yahoo began its journey
as an internet directory and soon became a valuable navigational tool for users
searching for information on the internet. Even in the dotcom crash of the year
2000, the company managed to stay put and hold ground against adverse industry
conditions. Some of the better known strategic business units (SBUs) of Yahoo
are Yahoo Directory, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Groups, Yahoo
Answers, Yahoo Advertising, Yahoo Online Mapping, Yahoo Video Sharing, Fantasy
Sports, Tumblr and Flickr. While this makes for an interesting read in
corporate history, there is more to the picture than meets the eye.
Industry Position of Yahoo
This
time Yahoo’s earnings have been reported to be slightly above the estimates of
analysts. The unfortunate part is that the reason behind this is that a string
of bad financial performances that have been reported over the last ten years
have forced analysts to revise their expectations. Revenue stood at $1.09
billion for most of the last quarter, down 11% from the year before and the net
loss of the company stood at $99 million. Yahoo is expected to capture more
than $2.6 billion in worldwide digital ad revenues. The absolute figures may
just seem fine as long as one does not watch out for market share and industry
data of competitors like Google and Microsoft.
What Went Wrong for Yahoo?
Given
that Yahoo is now staring at the strategic alternative process; one does have
to beg to ask for what went wrong for Yahoo? As with any other giant that falls
flat on earth, there are not one but several reasons. Over the last ten years
Yahoo has seen six CEOs pass through the doors. One of those CEOs was straight
from Hollywood and led the company into acquiring Geocities for $4.6 billion,
followed by the acquisition of Broadcast.com for $5.7 billion. Unlike Google
and Facebook that evolved business models to branch out into the community
based models of social media, Yahoo was stuck with content. Even Google focused
a lot on getting digital ad revenue while Yahoo focused on creative business
content. While Google went in for corporate restructuring last year and
rechristened itself Alphabet, Yahoo failed to evolve in terms of corporate
structure and design.
What Has Been the Role of Marissa Mayer?
The
role of Marissa Mayer has come under close scrutiny from media, industry
insiders and Wall Street. Marissa Mayer the present CEO of Yahoo is an alumnus
of Stanford University who has specialized in symbolic systems. She was one of
Google’s earliest employees and was one of the brightest and most successful
product development managers in Google. In her stint as CEO of Yahoo, she did
focus on high profile content acquisitions such as the blogging site Tumblr and
high profile talent like David Pogue and Katie Couric. She did put in efforts
to improve the search capabilities of Yahoo.
Suitors for Yahoo
With
every passing day it is becoming increasingly clear that sooner or later this
year Yahoo will have to opt for the strategic alternative process. Potential
suitors for Yahoo include Verizon, AT&T, Comcast, Amazon and Softbank.
Yahoo offers these suitors a chance at improving consumer relationship and
loads of user data that has accumulated over the years. It has been seen that
telecom companies usually have expressed interest in such acquisitions in the
past for strategic reasons but not many of those attempts have been successful.
At
Ishan Institute of Management & Technology, the best MBA College in Greater
Noida, we are in the process of collecting data on the liquidation strategy of
Yahoo for the purpose of an extensive case study on what may turn out to be the
fall of yet another dotcom giant anytime now.