DIGITAL ASSIGNMENT – I
BRAND – SUCCESS AND FAILURE
BY:
S. KAMALESH
18MBA0009
YAHOO
Yahoo is one of the two biggest internet companies in the world with
nearly 650 million unique users visiting their website every month it
started off a web directory but has progressed to include categories like
news, mail, finance,maps, sports and much more. It has become a
mini universe where people can find all the resources they need to
work on the internet.
It offers it services in 30 languages and in 2013 was the most used
portal in the U.S. overtaking long-time rival Google. In 2012, it
earned profits of $3.94 billion against a revenue of $5 billion. That
is 79% profit percentage on the revenue earned which is the highest
among all the Fortune 500 companies.
Yahoo! had humble beginnings with founders Jerry Yang and David
Filo starting it as a pass time experiment. In 1994, both Jerry and
David were pursuing graduation in electrical engineering from
Stanford University. They created a website called ‘Jerry’s guide to
the World Wide Web’ which was basically a directory that listed
most of the websites listed on the internet. It had sub categories
under which users could find useful sites they were looking for.
They renamed the site as ‘yahoo.com’ in January 1995. The term
‘Yahoo’ stood for ‘Yet Another Hierarchical Officious Oracle’.
SUCCESS STORY
Yahoo! became an instant success as it received close to a million
views in a short time from its official launch. Soon Jerry and David
decided to incorporate it as a company. In April 1996 when Yahoo!
had its Initial Public Offering it was able to raise nearly $33 million
by selling 2.6 million shares at approximately $13 per share.
By 2000 Yahoo! was growing at a rapid pace. It started acquiring
and adding more services to its popular web portal. It added Yahoo
Mail, Yahoo! Messenger, Yahoo! Groups which all went on to
become successful in a short time span. Yahoo! achieved a record
share price of $118.75 on January 3, 2000 at the peak of the dot-com
boom.
But soon Yahoo! had to see the other side of the coin when its share
price fell to its all-time low price of $8.11. But Yahoo! was able to
survive the dot-com bubble burst successfully and was one of the
few companies to continue as it had done previously. It took the help
of search engine giant Google from 2000-2004 till it developed its
own search technology. It kept acquiring small and medium
companied to bolster its services in every department.
Today Yahoo! employs more than 13,000 employees and owns more
than fifty web properties. It has become a well-established company
that can challenge Google for the number one spot in the web portal
business. From starting off as a single website started by two young
college students, Yahoo! has become a household name earning as
much as 75% profits on their yearly revenues.
FAILURES
1. Refusing to buy Google for just $1 million:
Yahoo failed to gauge its biggest competitors and turned down the $1 million
deal. Yes, Yahoo could have easily turned the tables if it had said yes to Larry
Page and Sergei Brin when the duo approached it, selling Google. Page and Brin
wanted to focus on their studies at Stanford and therefore were looking for a
company to sell their small start-up called PageRank system at a small amount of
$1 million. Today Google is the one of the most valuable companies worth over
$500 billion.
2. Failing to buy Facebook:
As if saying no to Google was not enough, Yahoo. According to the book called
The Facebook Effect by David Kirkpatrick, Yahoo initially offered $1 billion to
Facebook but later lowered it to $850 million. David writes that Facebook in 10
minutes made its mind to decline the offer.
3. Hiring wrong CEOs:
According to an Inquirer report , Yahoo has repeatedly hired wrong CEOs. The
report states that none of the CEOs at Yahoo including Marissa Mayer had a
"strategic vision" that could match what Eric Schmidt at Google brought.
4. Called itself a media company:
Though Yahoo worked as a tech company, it failed to acknowledge itself one and
stubbornly addressed itself as the media company. It got swayed away by the
profit which it earned initially through ads and overlooked the tech involved in it.
5. Declining Microsoft's acquisition:
This was the final nail in the coffin. In 2008, Microsoft had showed its interest to
buy Yahoo for $44.6 billion. The company refused. Recently Verizon bought its
core web assets in a deal worth $4.8 billion.
