I.
TIME FRAME: January 2009
II. VIEW POINT:
Yahoo! Inc. ([Link]) is a comprehensive strategic management case that
includes the company’s Calendar year-end December 31, 2008 financial statements,
competitor information and more. The case time setting is the year 2009. Sufficient
internal and external data are provided to enable students to evaluate current strategies
and recommend a three-year strategic plan for the company. Headquartered in
Sunnyvale, California, Yahoo! Inc. is traded on the New York Stock Exchange under
ticker symbol YHOO.
III. STATEMENT OF THE PROBLEM:
IV. STATEMENT OF THE OBJECTIVE:
Yahoo! powers and delights our communities of users, advertisers, and publishers — all
of us united in creating indispensable experiences, and fueled by trust.
V. AREAS OF CONSIDERATION:
Internal Environment
A. Strengths
Increase in revenue from 2007 to 2008 by 3.4 percent to $7.2 billion
Yahoo is the second leading global Internet brand
Other than offering advertising and online properties, the company offers Internet
access through third-party entities
Other than advertising fees, Yahoo generates additional revenue by charging
fees for a range of premium services
With additional lay-offs, the company anticipating to have a better profitability for
the next few years
Within Internet base service, Yahoo! has several revenue generated segments
such as Search, Display Related, Classified, Referrals / Lead Generation and
Email.
Company’s quick ratio is 2.54, above industry average
B. Weakness
The net income decreased by 35.7 percent to $424 million.
Overall advertising revenue dropped by 13 percent in the 2 nd quarter of 2009
compare to the prior year
Yahoo! closed several of its video properties and is planning to close twenty
video services including its social network site Yahoo! 360 and its Web hosting
service GeoCities
Company’s capital lease and other long-term liabilities increased by over $48
million
Microsoft has tried to acquire Yahoo! twice for the last three years
External Environment
C. Opportunities
1.1 billion Internet users around the world as of 2006 and it is still growing
Internet advertising revenues in the U.S. remains strong, topping $23 billion in
2008
Consumers are spending more of their time online
New business strategies such as bundling Internet access with voice and video
services are increasing
Innovativeness in technology is the driving force in Internet-based businesses
Many businesses overseas are finding advertising on Internet less expensive and
more responsive
Countries such as China and India have stronger economic status and
accordingly, the companies are able to spend more advertising dollars via
Internet
D. Threats
Due to weak economic conditions, Internet related businesses also have suffered
In 2009, a number of Internet content and advertising companies reported
disappointing financial results and lowered their forward financial outlooks
Low entry barrier makes the viability of existing Internet based businesses
difficult
Changes in legislative requirements concerning technology sharing, patent rights
and information security could increase future expenses and lower profitability
Constant technology changes causes difficulty to be up-to-date all the time
Consolidations among Internet-based providers could make the competition to be
strong
VI. ASSUMPTION
VII. ALTERNATIVE COURSES OF ACTION
VIII. ANALYSIS OF ACA
IX. CONCLUSION
X. ACTION PLAN