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Yahoo?: Business on Internet Time. By. Girotte and Rivkin. Timing is now everything ... classified Web sites like libraries classify books (Yahoo! & Excite) ...

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Yahoo business on internet time l.jpg

Yahoo?: Business on Internet Time

By

Girotte and Rivkin


Timing is now everything l.jpg

Timing is now everything

  • What is the difference between strategy and tactics in Internet time?

  • Strategy used to be long term, maybe 3 to 5 years. Can you keep a strategy that long when competition changes their offerings weekly or monthly?


Competitive landscape l.jpg

Competitive Landscape

  • @Home acquires Excite (Yahoo!’s arch rival)

    • Offered high-speed cable access to the Internet

  • AOL acquired Netscape

    • Netscape owned a browser

    • Netcenter was popular portal

  • Disney took stake in Infoseek

  • NBC allied with SNAP

  • Lycos was in merger talks


When do you change strategy l.jpg

When do you change strategy?

  • When KSFs change.

  • When customer requirements change.

  • When competitive requirements change.

  • When other assumptions/requirments change.


Yahoo s strategy l.jpg

Yahoo!’s Strategy

  • Provide one-stop access to anything that someone might need.

    • Find anything

    • Locate anyone

    • Buy anything

  • Generate revenue from advertising and deliver users to vendors’ sites.


Internet the www l.jpg

Internet & the WWW

  • Started by DoD for military and its vendors in 1960s.

  • HTML standard set in 1991 for describing computer documents.

  • Browser developed in 1994 by James Clark (Netscape founder).

  • By 1999, 100 million Internet users, and 43 million host computers & 367 million PCs on the Web.


Portals l.jpg

Portals

“Second most meaningless word in Netspeak”

  • Search engine spiders found latest Web sites (Lycos, Infoseek & Alta Vista).

  • Navigation sites classified Web sites like libraries classify books (Yahoo! & Excite).

    • News, sports, stocks.

    • Email and personal home pages

    • Auctions, shopping, financial services.

    • Chat rooms and communities


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Portal Customers

  • Non-paying users of Portals (48% men, 34% women, 18% children).

    • Searching

    • Communicating

    • Exploring

  • Corporations paying to attract sale of products and services (display ads or links).

    • $2 billion in 1998 (52% through portals)

    • $5 to $200, main page vs targeted placement

    • 2% to 30% referral fees


Portal suppliers l.jpg

Portal Suppliers

  • Information providers, like news, get monthly fees ($2,500 to $20,000)

  • Advertising media (50% of revenues spent to build brand awareness)

  • Labor ($100,000 to $200,000 for programmers)

  • Technology for financial transactions, email and instant messaging, & home page development tools.


Leading portals l.jpg

Leading Portals

Yahoo!

AOL.com

Excite

MSN

Lycos

Infoseek

Netcenter

Snap

  • Access

  • Providers:

  • Broadband

  • (Media One, @Home)

  • Dial-up

  • (AOL, AT&T Worldnet)

  • Wireless

  • Direct at Work

Customers

Require:

PC

Modem

Subscription

  • Vertical Sites:

  • Techn news

  • (CNET, ZDNet)

  • Sports

  • (ESPN)

  • Personal finance

  • (Quicken.com)

  • Mass Content:

  • 43 million connected computers

Set default

Portal

Other

Sites

Subscribe to

Access Provider

Go to Vertical

Site of interest

Consumer buy PC

& modem


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Yahoo! Results

  • Bring people together for content, commerce, communications, and community offerings.

  • My Yahoo! With tailored ads, chat rooms, and news wires.

  • Country specific portals.

  • 167 million page views per day in 12/98.

  • 50 million viewers

  • 2,225 companies buying ads


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Yahoo! Properties Common look and feel

  • Navigation properties to find relevant information (categories of information).

  • Community properties to facilitate contacts and communication (address book, email, chats, message boards).

  • Personalization properties (MyYahoo! for personal links).

  • Electronic Commerce Properties (shop, travel, real estate)

  • International properties (local language and sites)


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Yahoo! Operations

  • Tight space helps communication and keeps costs down.

  • Organization (Exhibit 11) by expertise

    • Property development: (Production, Engineering, Surfing)

    • Marketing and Sales: (Business development, Brand marketing, Sales)

    • International

  • Partnerships for distribution (like AT&T WorldNet, E*Trade, NPR, Fox sports)


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Yahoo! Planning

  • Stay 60 days “ahead of the competition”


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Competition (Exhibits 13 & 14)

  • Access and Content Providers

    • AOL/Netscape has largest captive market of 14 million subscribers (Netscape had been late to set up a Portal)

    • MSN (2 million subscribers) imitates AOL (deal between AOL to use IE as default, for AOL on desktop)

    • @Home/Excite (330,000 subscribers) accessed 19 cable providers passing 60 million homes


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Competition

  • Portals with Media Partners

    • Disney/Infoseek were 8th and 9th most popular sites.

    • NBC/Snap accessed CNET, MSNBC and CNBC.

  • Independent Portals

    • Lycos Network with HotBot search engine

    • AltaVista takes DEC’s search engine public


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What future actions? (Exhibit 13)

  • What new partners? Suppliers? Customers?

  • What new features?

  • What content providers?

  • What capabilities? Security? Transactions?

  • What acquisitions?

  • What income streams?

    What future strategy? When will you know it?


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