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. Some reports indicate that is it is the most popular website in the World.
- 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. Yahoo! is well placed to take advantage of these opportunities with its strategic business units in Asia, Europe and Australia.
- The Yahoo! Directory is an original source of structured information. It has built over the last decade, and unlike mainstream search engines, its content is moderated (i.e. sites are vetted before their inclusion).
- Differentiation is difficult for Yahoo!. Almost all of its packaged services are available from other sources.
- (i) Search facilities are available on MSN and Google.
- (ii) Free E-mail accounts are available from Hotmail (MSN) or G-Mail (Google), and many, many others.
- (iii) New is available from CNN or the BBC.
- (iv) Shopping is available everywhere on the Internet. Google has Froogle.
- 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.
- Another income stream that has been key to Yahoo! is derived from its partnerships with telecommunication providers. For example, you buy an Internet connection package from your local telephone company, and it includes a fee-based Yahoo! package including e-mail accounts, user support and other added value services. If ever this channel is changed or removed, the income stream would be affected.
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.
- The Development of the Yahoo! Directory has potential for new business and income streams. Two thirds of organizations in Ohmae's Triad (Europe, Japan and the USA) are Small Medium Enterprises (SME'). SME's are potential directory advertisers.
- 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.
Threats.
- The biggest threat for all web-based organization is competition. Huge profits attract investors, innovators and entrepreneurs. Dotcom fever has not gone away, it is now more focused on profit delivery. 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. Why should the World use USA based companies such as Yahoo!? There needs to be a series of substantial competitive advantages to see the business remain as an international brand. Look at what has been learned from the global car industry, or electronics industry.
When Yahoo!! was founded in 1994 by Stanford Ph.D. students, David Filo and Jerry Yang, it began as their hobby and has evolved into a global brand that has changed the way people communicate with each other, find and access information, and make purchases.
