ENTREPRENEURSHIP & INNOVATION
SOUTHERN
TAIWAN
UNIVERSITY
MEMBERS OF
“AMBITION NANTAI”
Bousquet Alexandra
MA1N0243
Mouaci Anissa
MA1N0244
Pawel Pretkiewicz
MA1N0224
INTRODUCTION
Was an Internet site that provided a hierarchically organized
list of links to sites on the world wide web. It offered a way for
the general public to easily navigate and explore the Web.
It is one of the most heavily visited sites on the Web.
The strategy of the company is to concentrate on promoting
the brand and not on revenues. The company need to build
the product, so that it has reliability and credibility.
COMPANY OVERVIEW:
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“The world’s largest global online network of integrated services”
Wide range of services
Achieved to reach out for more than 21 million local/ regional users in
the U.S. and 90 million globally
Works as a trade of information; “you give me and I’ll give you”
Founded by David Filo and Jerry Yang in 1994
Initially called "Jerry and David's Guide to the World Wide Web,”
Name later changed to Yahoo, which stands for "Yet Another
Hierarchical Officious Oracle”
Now, it would inspire people to produce a positive impact on their
communities
CASE DESCRIPTION
Jerry Yang & David Filo => Founders of Yahoo! In 1995.
They were graduated from “Stanford School of Engineering”.
They transform their Internet hobby into a viable business.
Yahoo! Has been fund by Michael Moritz at Sequoia Capital=> a leading
venture capital firms in Silicon Valley.
Sequoia Capital offer to Yahoo! $1 million in venture
funding in exchange for 25% share of Yahoo!
Sequoia also invested in success stories such as…
-Cisco
-Oracle
-Apple
QUESTIONS AND ANSWERS
Q1) What makes Yahoo! An attractive opportunity (and not just a good idea)?
At that time, the use of Internet increased rapidly and it was estimated that by
2000:
 40% of homes and 70% of all businesses in the U.S. would have access to
the Internet. The trend is the same in Europe and Japan.
The businesses needed to use Internet to do their commerce by managing
information and to communicating, and the individuals would use it for
entertainment and learning. As an early-entry company, Yahoo! provided the
related services for all of them. According to their analysis, there was a huge
potential market for them. Hence, it is a true opportunity.
Its vision was to remain
the most popular and
widely used guide to
information on the
Internet. Its value was to
help individuals easily
find useful information
from millions of pieces
of information scattered
globally on the Internet.
Q2) How will Yahoo! Make money (i.e., business model)?
Yahoo! use the web advertising model which is an extension of the
traditional media broadcast model. The broadcaster, in this case, a
web site, provides content (usually, but not necessarily, for free) and
services (like email, IM, blogs) mixed with advertising messages in
the form of banner ads.
A high volume of user traffic makes advertising profitable and permits
further diversification of site services. About 88% of revenues for the
fiscal year 2009 came from marketing services.
Video link : https://www.youtube.com/watch?v=j02vAjhdG-k
BY EXAMPLE YAHOO CAN MAKE MONEY …
 Generating following through its strong brand and momentum created
 The interest-area based structure of Yahoo! made it an easier and more
enjoyable way for users to find relevant information, generate following
 Through its editorial efforts, it provided a combination of
comprehensiveness and high quality
Through :
 Through targeted advertising based on enormous following (see the video
 New premium service
 Explore broad-band service (what they actually did from 2004)
Q3) Identify the major risks in each of these categories: technology,
market, team, and financial. Rank order them.
1) Technology : As the digital world move quickly
Yahoo will be able to face
considerable substitutes for all of his product offerings and services. Such substitutes
include search engines (primarily Google, as well as MSN and Ask), as well as niche
players like Amazon.com, Ebay, Monster.com, MySpace, Facebook, and YouTube.
2) Market : In 1995, the threat could have been considerable as Aol and the others
competitors could have developed the same products and services. Nowadays, the sheer
scale of products and services that are offered by Yahoo, combined with its market
dominance, makes the threat of comparable new entrants low, especially new entrants
who are trying to compete head-on with Yahoo.. However, the threat of new, customized
portals is always considerable as new players that focus on niche markets can easily take
away online advertising and retail and auction sales revenues away from Yahoo.
3) Financial: As the investments are colossal in this domain, the risk are at the level of
their amount.
3) Team : It could constitute a threat for the founders at the beginning that may have seen
their responsibilities and shares decreasing in this project. Of course the team should be
aware of all the market and make decision in harmony (see the departure of the cofounder).
Q4) What are the advantages and disadvantages of each of the funding option
they could pursue? Which one do you recommend?
Two different outcomes can emerge from this crucial decision. Indeed, for
successful ventures we have
 an established, independent enterprise
 versus merger or acquisition with another firm.
 The schema on the next page can give us a picture of the disadvantages and
advantages the founders are facing :
THE 1995 ‘S THREE OPTIONS
DISADVANTAGES
- Reuters was a London-based media
service, which could help publicize
Yahoo!
- It wanted to integrate
Reuter’s news service
into Yahoo!, which would
prevent its free
development
ADV/DISADV TABLE
ADVANTAGES/ DISADVANTAGES TABLE
John
Taysom
ADVANTAGES
- Yahoo! was in a poor
negotiating position
since it did not generate
revenues
Randy
Adams
- Yahoo! would get a chance to generate - Yahoo! would become
some revenue
associated with a
shopping network
Netscape - Netscape was planning its IPO and had - Yahoo! would be
tremendous publicity and momentum purchased by Netscape
behind it, which would help Yahoo!
generate revenue
- Netscape’s company culture was in
tune with the founders of Yahoo!
Partners
AVDANTAGES
DISADVANTAGES
- The companies offered
money, stock and
possible management
positions.
- The potential taint that
came with such
sponsorship
- Lack of control
KPCB
- Excellent reputation
- They invest just 0.5M
- Successful investments
Architext
Sequoia Capital
-Increasing press
coverage
- Venture capital partners
- Yahoo! had to merge
with Architext
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- 25% of stock share to
Sequoia Capital
Money (1million),
Management
Our personal opinion:
Since its vision was to remain the most popular and widely used
guide to information on the Internet, Yahoo! should not choose
those who had the potential of preventing its free development.
Hence, it should choose one from KPCB and Sequoia Capital.
Because the latter would invest more money and help them
complete their management team, we think Sequoia Capital
would be a better choice.