Yahoo! 1995
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Yahoo! Inc
• An American internet Corp.
• One of the largest website in the USA
• Best known for its :
- web portal
- Search engine
- Yahoo! Mail
- Yahoo news
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Meet the founders
David FILO &
Jerry YANG
Electrical
Engineering
Graduate students
from STANFORD
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History
• The Yahoo!.com domain was created in
1995
• Original name « David & Jerry’s guide to
the world wide web »
• Yahoo! Means: « Yet Another Hierrachical
Officious Oracle »
• The exclamation point is « Pure Marketing
Hype » (Jerry YANG)
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Growth 97-99
• Many acquisitions made to expand their
services
• Eg : Rocketmail became Yahoo! Mail
• Classic games Yahoo! Games
• After those acquisitions, they claimed
intellectual property right
• Controversial and unpopular with users of
the existing services
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Yahoo!’s Growing popularity
• At fisrt, it was only accessible by its two
creators
• Spread by word of mouth & email
+ : Handcrafted tool designated by people,
not by computers
• A labour intensive product
 Essence of yahoo UNIQUENESS
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Yahoo!’s Growing popularity
• 3 main options to explore :
- Sell Yahoo!
- Partnership with a corporate sponsor
- Start an independant business
Filo &Yang had so many funding offers :
- With Reuters, a London based media service
- ISN (internet shopping nerwork)
- Netscape Communications Corp
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Search for fundings
• Sequoia Capital, with Michael Moritz
« We are always enamored with people that
seems to be on to something, even if they
can’t define that something, they had a
real passion and a real spark »
Michael Moritz
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Search for fundings
• Offer: $1 million
• Management team
• 25% shares in returns
• 24 hours to accept the deal
•  That decision WOULD determine the
future of Yahoo!
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Yahoo & Microsoft
• Merger discussions since 2005, 2006, 2007
Unsuccessful
Offer rejected in 2008 as "substantially
undervaluing”
On July 29, 2009, Announcement of a 10 year deal
Full access to Yahoo! Search engine
For Mic future project “Bing”
Thevery next day Yahoo! Share price more than
10% ( $15.14)
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Yahoo! Concept Statement
• The comapny goal is to remain the most popular
and widely used guide to information on the
internet
• A comprehensive and enjoyable guide to the
internet
• Interest area based-structure
• Focus on the directory and guide
• Generate revenues from advertising and
sponsorship
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The Search for Funding
• Accept Sequoia’s offer & launch Yahoo!
as their own company, but giving up a
significant percentage of ownership
• Accept corporate sponsorship, allowing
them to get the funding & still retain 100%
ownership of Yahoo!; or
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The Search for Funding
• Merge with an existing corporation in
exchange of stock options
• But, they can wait for a little more time &
wait for better terms with another venture
capitalist firm
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The Decision
• Chose Sequoia Capital to fund their
expansion with the reason “we chose
Sequoia, not only because of their great
reputation and track record, but also due
to the support for Yahoo! by Sequoia
general partner, Michael Moritz.” They
were awarded with initial investment of
nearly $2 million.
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The Decision
• As a reply, Michael Moritz explained that “our attraction
to Yahoo! was not only the vision of the founders, but
its impressive success which happened seemingly
overnight. We support David and Jerry's commitment to
keeping Yahoo free for users, and expect that gradually
Yahoo will integrate some kind of sponsorship or
advertising program. ”
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Yahoo’s Development
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Yahoo’s Growing Popularity
 Before : Yahoo was only accessible by the
2 engineering students
 Then : They created a Web Interface
 Spread by Word of mouth & e-mail
 Stanford Provided a sufficient bandwith
• to the Internet
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Facts
• Yahoo gained swift popularity Just 12
months after its creation, Yang and Filo
had over one million hits on their year old
search engine
• The sheer volume of people using it
prompted Filo and Yang to incorporate
Yahoo early in 1995
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Competing Service
Large numbers of Competitors in the
Internet search space business.
The uniqueness : it isn’t especially
interesting to point to information that
many people are known to find interesting
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Facts
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•
A key long-term strength is Yahoo!'s
international business presence
•
Yahoo! is well placed to take advantage of
these opportunities with its strategic business
units in Asia, Europe and Australia.
•
Yahoo! has over 350 million users of its
services and solutions.
•
This makes it a very powerful marketing
company, with a very well known brand
Starting the business
 Before long, hundreds of people were accessing
their guide from well beyond the Stanford trailer.
 Yang & Filo realized they wanted to start their
own business
 Realizing their new company had the potential to
grow quickly
 Workstation maxed out & overload University’s
computer system
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Facts
• Word spread from friends to what quickly
became a significant, loyal audience
throughout the closely-knit Internet
community
• Yahoo! celebrated its first million-hit day
in the fall of 1994, translating to almost
100 thousand unique visitors.
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SWOT Analysis
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Strengths
• Yahoo!'s Overture is a tremendously
profitable Internet advertising business.
It focuses on affiliate advertising for
large advertising accounts, in the same
way as Google's Adsense programme.
This is an important income stream for
Yahoo!.
• Yahoo! has over 350 million users of its
services and solutions. This makes it a
very powerful marketing company, with
a very well known brand.
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Strengths
• A key long-term strength is Yahoo!'s
international business presence. As the
Internet expands and it is adopted by more
nations the opportunities for Internet
brands begin to emerge.
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Weaknesses
Differentiation is difficult for Yahoo!. Almost all of
its packaged services are available from other
sources.
1. Search facilities are available on MSN and Google.
2. Free E-mail accounts are available from Hotmail
(MSN) or G-Mail (Google), and many, many
others.
3. New is available from CNN or the BBC.
4. Shopping is available everywhere on the Internet.
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Weaknesses
• Online advertising is a new income stream
for organizations such as MSN, Yahoo!
and Goggle. Yes, today they are very, very
profitable. However, as technology
develops and new unforeseen advertising
media emerge, the future is uncertain for
these income streams. This is a weakness
for Yahoo! and its competitors.
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Opportunities
• The international market is a huge opportunity
for Yahoo!. Yahoo!, Microsoft and Google are
busy carving niches and taking over businesses
in are around the Greater China Region. China
has over 1,200,000,000 citizens. Other
economies, such as India, also offer tremendous
growth potential.
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Opportunities
• Mobile technologies offer another opportunity
for Yahoo!. Today we access the Internet using
personal computers. Tomorrow phones,
televisions, personal organisers, music players
and computers will merge and morph. The
mobile devices of the future will need services
and solutions. Yahoo! would be well placed to
provide many of them
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Threats
• The biggest threat for all web-based organization
is competition. Huge profits attract investors,
innovators and entrepreneurs. All of Yahoo!'s
key services have competitors such as AOL,
Google and many others. International, culture
specific competitors could affect Yahoo! in the
future, unless strategic alliances are forged.
China has developed its own search engines, as
has India.
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THANK YOU !
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