Any major high-tech Silicon Valley company in the computing and internet industry has been in a highly-innovative, highly profitable business environment. This has been due to the little competition in the market due to their sizes, high competitive advantages in their prime niche, technological cleavage, and diverse other factors that make them generally sensationally successful. As forerunners when the transition to the digital economy unfolded, the resources these companies have accumulated only requires effective management and leadership, then they can graduate into completely alien entities with regards to resource and technological capabilities (Petit, 2016). Yahoo! Inc., no doubt is one such company with a vast international presence, and extensive global potential, regardless of the fact that other rivals could outpace their tempo of advancement. The challenge at Yahoo is therefore not a question of markets or technology, but a matter of management system, business ethics, ownership structure and the interaction between the company and governments as well as their capacity to sustain the dynamics of inter-business interactions.
Yahoo was founded in 1994, by two Stanford PhD Candidates David Filo and Jerry Yang as an internet provider company in the United States. In April 1996, the company went public on the NASDAQ (YHOO) and by 1999, the company was also integrated into the S&P 500 index. Initially, the company had focused its business as a search portal but later revised its mission to ‘connect people to knowledge, their passions and communities.’ Hiring very highly successful personnel chiefly from the other rivals like Google ad Microsoft, the company had projected a very impressive growth but as the new CEO, Marissa Mayer settled in office to make this sudden leap, the questions of internal structures and management culture took a toll on the new team. Yahoo would be on its knees for many years and at one time Microsoft sought to acquire it for $40.8 billion US dollars (Miglo, Lee & Liang, 2014). The famous saying ‘Too much ambition breaks a man!’ was applicable to Yahoo’s situation in the years 2013-2016. Yahoo adopted core values that enable the company become what various stakeholders want to see in the company. They are Excellence, Innovation, Teamwork, Community, Customer Fixation and Fun. The company’s key revenue source has been online advertising and with the rise of Google, Facebook, Microsoft as well as diverse new websites where customers do not necessarily seek online advertising, the company has been in trouble for coping with both internal dynamics and the external global economy.
Case Analysis: Problem Identification and Solutions
Yahoo developed a very extensive network of officers traversing the globe on the model of very highly geographically present industry conglomerate. While it was possible to sustain this massive physical presence in the initial stages of the DOT COM boom, as lean competitors emerged, economies and management practices had to go through a radical paradigm shift. The company tried to shed off excess employees and close down underperforming bases with little success. The CEO, Marissa Mayer struggled to review the competencies through a Human Resource Audit, for the new employees with very little success. After laying about 14% of loyal Yahoo workers, Meyer should have followed up with extensive internal program to boost morale, invigorate the operations and internal dynamics on the traditional business model before thinking of new broad ways of strategy.
Yahoo has made very little progress on the mobile platform and it was a marvelous opportunity for the company to go into the Mobile platform without any hesitation. As of 2013, Mobile platform was in the dawn as a premier of the future and the company did not make an aggressive progress pursuit. Google instead dominated the Mobile platform with a very extensive strategic efficiency (Donald, 2014). When Google pulled out of China, it was an opportunity for the company to aggressively embed its presence being that it had concord with Alibaba, which was dominant in the greater South East Asian territories.
Yahoo has faced very stiff completion in its primary business of online adverting as Google moved in. The challenge ought to have been met by further diversifying its marketing operations and focusing in niche environments where Google did not have so much power. Revenue diversification has been a keen objective of the company going into the future. Nonetheless, the company recently tends to play underdog. Search engine is an important baseline for any major internet company (West, 2014). Yahoo has performed dismally while the key competitors took most of its key market niches across the globe. As a forerunner, Yahoo might have suffered intensely by laying a business plan that others have adopted in its mature stages and perfected. The costs of growing the business culture and consumption behaviors around online search engines are a cost Yahoo borne alone in the industry. It would do good only to exceedingly outpace the competition through innovation and adaptation to rapidly changing times.
Fig. 1. Outlook of Yahoo’s Core Business. Source: Yahoo.Com
Opportunity: Futuristic Options
There are broad new frontiers in the online industry that Yahoo could tap into and still remain viable and profitable. There are a group of nations that are just peering into the online and high-tech internet infrastructure with diverse opportunities. If Yahoo could be keen to refocus its business outlook from core values to operations and human resource practices, critical realignment can be attained that will promise new competitive advantages and opportunities, Moreover, there is new technological convergences in wide spectrum business management, governance support systems, international online security infrastructure with suitable business prospects for Yahoo and any other adequately ambitious internet based conglomerate. Furthermore, the field of robotics, nanotechnology and diverse futuristic frontiers that will have to integrate with the internet and Yahoo could position itself for some serious business in the ventures.
The online business that Yahoo has always supported is undoubtedly phenomenal. The business has a good base already and the only challenge to be confronted is a temporary challenge of alignment and business model. Yahoo needs to shed of its initial identity that has become obsolete in the high-tech industry. New systems of diplomacy in the business sense have to be aligned so that the business can be friendly to governments and their social and political goals. Most other companies in the industry are adequately integrated with government agendas and infrastructure and to some degree serve government goals more than they serve core interests of the citizenry.