Sweet Spot Case Study

1
Sweet Spot Case Study

• Rahul Gupta
• 9/11/03
• CS453 E-commerce Technologies

2
Background

• Two founders from Stanford David Filo and Jerry
  Yang 4
• Started in February 1994 in a campus trailer 7
• Incorporated in March 1995 6
• In April 1995 funded by Sequoia Capital with an
  initial investment of about 2 million 7
• Went public in April 1996 6
• Corporate Headquarters in Sunnyvale, CA 6
• Director and former-CEO of Yahoo, Timothy Koogle,
  is a Wahoo! 6

3
Why was it started?

• Started as a way to keep track of their personal
  interests on the Internet 7
• Evolved into a complete online navigational guide
  7
• Initially called Jerry's Guide to the World Wide
  Web 7
• Yahoo! acronym for Yet Another Hierarchical
  Officious Oracle 7
• Definition of Yahoo accepted by creators rude,
  unsophisticated, uncouth 7

4
Whatre the consumer functions?

• Provides internet content from over 2000
  top-of-the-industry providers in areas such as
  news, travel, sports, games, and weather. 6
• Provides commerce services such as shopping,
  auctions, finance, and classifieds. 6
• Provides communications services such as Mail,
  Messenger, Photos, Greetings, and Clubs. 6
• Yahoo! Everywhere provides consumers with mobile
  access to information via devices including
  wireless phones, two-way pagers and PDAs. 6

5
Whatre the enterprise functions?

• Marketing Enables agencies and clients to find
  and connect to audiences through Fusion
  Marketing. 6
• Business and Enterprise Services Integration of
  commerce, communications and media into web
  portal and similar services via Corporate Yahoo!,
  Yahoo! Broadcast Services, Yahoo! Small Business.
  6
• Premium Services Yahoo! Store, Business Express,
  Yahoo! Yellow Pages, Yahoo! Auctions, Yahoo! Bill
  Pay, and extra mail storage. 6

6
Who are the customers?

• More than 237 million unique worldwide users in
  25 countries and 13 languages (December 2001).
  4
• 93 million active registered users 5
• More than 1.5 billion page views a day 5

7
How does Yahoo! compare?
Taken from reference 9
8
How it compares contd
Taken from reference 9
9
Awards
Taken from reference 9
10
Why is Yahoo special?
Taken from reference 9
11
Front-end of main portal
Taken from reference 1
12
Front-end of Yahoo! Search
Taken from reference 2
13
Front-end of Yahoo! Auctions
Taken from reference 3
14
Back-end

• Yahoo at first used a proprietary server-side
  page language written in C/C 5
• Transitioned to PHP in 2002 5
• 4500 servers in 16 co-locations 5
• USA Sunnyvale, Santa Clara, San Diego,
  Washington DC, Dallas
• Intl England, Central America, South America,
  Taiwan, Hong Kong, Singapore, China, Australia,
  India, Japan, Korea

15
Acquisitions
Yahoo! has acquired twenty companies since its
start. 6
Taken from reference 6
16
Financial information

• The opening price of Yahoo!'s stock on the day of
  the IPO was 13.00 per share and the closing
  price on that day was 33.00 per share. 6

Taken from reference 10
17
Hows Yahoo! doing now?

• For Fiscal Year 2002 8
• Revenue per average Unique User per month 0.40
• Net Revenues Total 953.1 million
• Net income (loss) 42.8 million
• Net income (loss) per share Diluted 0.07
• Free Cash Flow 221.0 million

18
Spectacular successes

• According Nielsen/NetRatings 8/2002, Yahoo! is
  the Worlds most trafficked Internet destination.
  5
• First all-encompassing portal/guide to the
  Internet 4
• Takes number 1 spot on corporate desktops, with a
  70 reach in the U.S. workplace4

19
Spectacular successes contd
Taken from reference 9
20
My Thoughts on Yahoo!

• I believe that Yahoo! is going to continue to be
  very successful due to its extremely wide
  breadth. It turned a healthy profit early in its
  history and each year that profit has increased.
  I predict that it will continue this same trend
  in the coming years.
• Yahoo! Search is a great feature designed to
  rival the simplicity of Google, but it might not
  be enough to recapture the customer-base that
  Google has earned. I personally use Google as my
  main search engine because it gets me what I want
  quickly and accurately.
• Even with so many formidable competitors I
  believe that overall Yahoo! is still unique due
  to the fact that it seems to have everything that
  most people use on a day to day basis such as
  search, auctions, sports coverage, news,
  directories, music, movie reviews, and email.

21
References

• Yahoo! http//www.yahoo.com
• Yahoo! Search http//search.yahoo.com/
• Yahoo! Auctions http//auctions.shopping.yahoo.co
  m/
• Company Overview http//docs.yahoo.com/info/misc/
  overview.html
• Making the Case for PHP at Yahoo!http//public.y
  ahoo.com/radwin/talks/yahoo-phpcon2002.htm
• FAQ http//docs.yahoo.com/info/pr/faq.html

22
References Contd

• The History of Yahoo! - How It All Started...
  http//docs.yahoo.com/info/misc/history.html
• Supplementary Financial Information
  http//docs.yahoo.com/info/investor/metrics.html
• Yahoo! Facts Figures http//solutions.yahoo.com
  /advertiser_center/research/factsandfigures.html
• Yahoo! Investor Information http//yhoo.client.sh
  areholder.com/
• TechWeb Yahoo Turns Reputation Into
  Acquisitions http//www.techweb.com/wire/story/TW
  B19990401S0016

23
References Contd

• Yahoo! Introduces New Yahoo! Search
  http//yhoo.client.shareholder.com/ReleaseDetail.c
  fm?ReleaseID105839
• Yahoo! Auctions Introduces Offline Seller's
  Management Tool http//docs.yahoo.com/docs/pr/rel
  ease709.html
• Press Release Yahoo! No. 1 Online Music
  Destination in the U.S. According to
  Nielsen/Netratings' Marketview Report
  http//docs.yahoo.com/docs/pr/release990.html
• Press Release Yahoo! No. 1 Search Destination in
  the U.S. According to Nielsen/Netratings' March
  Marketview Report http//docs.yahoo.com/docs/pr/
  release983.html
• Press Release New Yahoo! Shopping Network Ranked
  the No. 2 Online Shopping Destination by
  Nielsen/Netratings http//docs.yahoo.com/docs/pr
  /release904.html