Group 3 Marie Nikki R. Martinez M997Z208 Marko Marinic M997Z206 Anja Grgic M997Z205 YAHOO! David Filo & Jerry Yang Jerry’s Guide Yahoo popularity Competing services Starting a business Funding Sell Yahoo! vs Corporate Partnership vs Venture Capital Founders and Potential Investor Jerry Yang, Founder David Filo, Founder Michael Moritz, Partner, Sequoia Capital Yahoo!´s first business plan was developed by Tim Brady Business Strategy Yahoo!´s goal is to remain the most popular and widely used guide to information on the Internet -> the goal of making useful information easy to find for individuals Yahoo!´s strategy is to: 1. Continue to build user traffic and brand strenght 2. Develop and intergrate the leading technology 3. Extend the reach to a broader audience 4. Extend the reach and appeal to inernational userd 5. Retain the users (“readership”) of Yahoo! 6. Rapidly extend the product line Market Analysis Market segmentation: Large businesses using the Internet for wide area information 2. Small home businesses using it for information relevant to the small business 3. The individual user/consumer using information for entertainment 1. Market Analysis (cont.) Market Trends 1. There is large scale adoption of enabling technology in the areas of 2. 3. 4. 5. 6. 7. network hardware and software, as well as communication hardware and software Telecomunication companies are rushing to put in place basic “hookups” in high bandwidth platform The price for high-speed computer is still high Home adoption of Internet acces is on the rise Formerly closed network online services such as America Online, Compuserve and Prodigy are now offering Internet access Companies as Yahoo! Which provide means to navigate the Web are growing rapidly as measured by amount of end user traffic These high traffic sites already provide a high volume platform for delivering electronic advertising Market Analysis (cont.) Competition - Yahoo intends to effectively beat any emerging competitors by: 1. Establishing broader distribution earlier than any other competitor 2. Broadening the product line faster 3. Staying ahead of the competitors with regular core product updates 4. Delivering high quality audiences and compelling results to advertisers Market Analysis (cont.) Risks 1. The ability to increase traffic and enhance the Yahoo! 2. 3. 4. 5. 6. Brand Ability to introduce key new products faster and better than the competition Ability to develop an international presence and leading brand internationally before the competition The introduction of competitive products internally developed by access providers Ability to scale our support of both the traffic through our main site That the growth of the Internet industry as a whole slows significantly Yahoo!`s core strategic advantages It´s strong brand Yahoo´s scalable core technology in search engine, database structure and communication software WHAT MAKES YAHOO! AN ATTRACTIVE OPPORTUNITY (and not just a good idea)? Good management Clear intellectual property Growing client base Clear view of the business going forward HOW WILL YAHOO! MAKE MONEY? Banner / General advertising Targeted advertising Lots of advertisers bidding on many millions of keywords, and hundreds of millions of users doing billions of searches, a small charge each time somebody clicks on an ad, and you get a big business. MAJOR RISKS Technology The race has been ongoing for many years. Inaccurate information Ability to introduce key new products faster and better than the competition Market Changes preferences Likes it personalized Team Has to always work together and cooperate Traffic -control Financial Unstable stock value COMPANY REUTERS ADVANTAGES DISADVANTAGES •Provide news service from a well-known source •Reuters was a Londonbased media service, which could help publicize Yahoo! •Poor negotiating position •Integration of news service would prevent free development of Yahoo! ISN •Popularity •Revenue generating •Potential taints (associated with a shopping network) NETSCAPE •Netscape is about to go public. •Publicity and great timing •High-profile founders and backers •Yahoo! would be bought COMPANY ADVANTAGES DISADVANTAGE S CORPORATE PARTNERSHIPS (AOL PRODIGY AND COMPUSERVE and KPCB) •Large funds, money, stock and possible positions •Less risk when it comes to competition •Good reputation •Potential taints •Lack of control SEQUOIA •One of Silicon Valley's most influential venture-capital firms •Has funded successful companies such as: Apple, Oracle, Atari, etc… •Top management team assembly •1 million dollar fund •24-hour deadline •A significant percentage will be given up by Yahoo! MY RECOMMENDATION THE LAST OPTION: Sequoia Capital WHY?