Yahoo Loosing Market (Essay Sample)

Yahoo steadily losing market: Case Analysis
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12/03/2013
Executive Summary
Yahoo has developed from an ordinary search service into a global Internet communications, business and media company that offers a wide range of branded services and information to a large number of individuals globally. It is one of the most renowned brands on the Internet and one of the leading companies in terms of traffic, advertisements and household and business reach. Yahoo offers a range of supporting services that add value ranging from e-mail services, stock quotes among others in a single location. The company’s primary competitors in the “internet information providers” industry are Google, AOL, and MSN. All these competitors define themselves differently despite being in line with the same sector in terms of investment and target market.
The company is facing a number of key problems, which include stiff competition from competitors such as Google Inc. Google has experienced a spectacular rise in search within its advertisement platform. In comparison to yahoo, Google search advertisements make about 99% of their total revenue; something that yahoo could have done but were unable to accomplish (Gabbert, 2012). Yahoo is the leading website in terms of internet traffic. In fact, the company accounts for most page viewers, who rely on yahoo in comparison to other companies. The company has established an all inclusive yahoo intended to capitalize on the traffic by adverting deals and partnerships. Identifying the various needs of the various market segments is key to the company’s marketing strategy. The company also creates a good image for itself by utilizing indigenous personnel for their staffing in their international offices. Besides, it has developed a world-class marketing, which utilizes at least 20 different languages to develop a competitive edge over their competitors.
In order to overcome its troubles, the Company should focus on new product development and brand image and develop new pricing incentives to attract advertisers. Besides, the company should customize its products to each part of the globe while putting in consideration the demographics of the audience. They should also adopt an effective promotion strategy to ensure they have an impact.
Problem statement
Yahoo has grown to the level of the leading search engines on the world web. Among the problems common in the company include the search results (Google generates twice as much revenues as yahoo search results), decreasing advertisements due to competitors Google and the increase in the strength of competitors. The company’s troubles began through the economic recession as people found it inevitable to minimize their spending.
By mid 2000’s, the faltering economy due to the dot com crash, landed the company in a bad position. In fact, its stock prices fell by 80% during that year (Yahoo! Inc Profile. (2007)). Also driving 80% of its revenues from online advertising sales, the company felt significant impact, which affected its revenues significantly. This paper analyzes Yahoo Company and gives recommendations on the steps the company should take to overcome its challenges and enhance its sustainability and competitiveness going into the future.
The problems of this case are the problems faced by the yahoo company. This includes steep competition from its competitors like Google, low income turnout due to decrease in the advertisement level. The advertisement decrease is caused by competition from other companies that offer better services or akin to yahoo. Therefore, this case study will try to explore this problems their base cause and solutions to them.
Target market
Yahoo as a search engine employs vast variety of method which is highly targeting customers who enter the site. This due to the assumption that many people enter the search engine and become interested in different kinds of revises they offer like free emails and data storage space. Therefore, yahoo’s target market is created business advertisers for they have a well designed searchable data base the favors large business and thus attracting all modes of media promotions both paid and free (Bertrand, 2013). In essence, Yahoo’s targets include those surfers searching for content through their search engines as well as the advertisers that seek to reach out to the large number of traffic on these sites (Albanesius, 2009). This expansion made Yahoo become an internet giant by 2000. According to the case, the company derives 80% of its revenues from online advertising sales.
Segmentation
While most internet companies focused their promotions on existing internet users, Yahoo adopted traditional offline media. This move was vital in yahoo brand building strategy. It aimed at influencing those people who were not frequent Internet users but were most likely to use Internet in the near future (Andrew, 2008). This target group represented a large growing number. For the sake of reaching this target group, Yahoo focused on promotions by use of public relations, TV and radio commercials. For it, survival in the market yahoo has segmented itself into several segments. Communication segments provide internet communication like yahoo mail and yahoo messenger. It email service offers large volume of storage space a situation which has seen an influx of different people in its website looking for space to store their electronic stuff. Yahoo communication department also provides a social network services like blogs among others. Yahoo provides content through partnerships with different content partners. This is also in cooperated with personalized services, which feed users with vast kind of information. The mobile segment offered by yahoo provided instant messaging together with information service, alerts and searches. Other segments of yahoo include yahoo commerce, small business, and advertising and yahoo search engines.
Branding items and Competition
According to the case study, the company had the potential to reinvent and reinvigorate its advertising. It had a unique ability to measure and track who clicked on an ad and how they interacted with it. However, an accusation had emerged that the company had neglected the needs of corporate marketers. Yahoo faces great competition from Google Inc. In one, occasion, Yahoo received a takeover bid from Microsoft Corporation, which is the world's largest software company. Google has established their name as synonymous with Internet search. They also have marketing strategies that focus on the consumer in a more unique manner than Yahoo.
The company’s business model comprises its content, search, market community and personalization. This is different from that of competitors such as Google whose business model is totally different since it focuses on advertising for profits. Karen (2002) notes that Google offers better features than Yahoo for it include the translation pool, maps and Gmail among others. These features differ from Yahoo’s.To remain competitive, the company should be distinct; there should be an extra incentive about their business that makes the customers thinks again before going to the other competitors. This includes everything that they would miss if they chose another company in Yahoo’s place (McWilliam, 2000).
From the case study, it is evident that the company had a unique ability to measure and tracks the visitors who clicked on an advertisement and how they interacted with it. With over 18 million active registered users, Yahoo could boast of knowing the habits of consumers more than any other portal. This allowed yahoo an upper hand in attracting brand advertising (Case Study).
As one among the most successful brands on the internet and the first online navigational web guide, Yahoo reaps the benefits of a fast mover. This has been possible through their persistent investment in new services and partnerships with other leading brands. These alliances have afforded the end-user with added value while also associating the company with well known brands (Hagel & Armstrong, 1997). The company’s consistency in addressing customer needs and a high quality online experience has been vital in building a reputation of excellence for the company.
Promotion analysis
The company’s main marketing approach is evident in the continuous product development and market management. It ensures each market segment gets the best services. Yahoo has received credit for its brand-building ability and promotion strategies to create awareness. According to the intelligent survey, 82% of internet users and 23% of individuals intending to go online are aware of the existence of Yahoo (Hoffman & Novak, 2000). The company has also recently merged the management of their marketing services with their search services to avail services to customers
According to the case, Yahoo made tremendous lead in attracting brand advertising by taking advantage of the shift in media consumption and using it to benefit from its over 181 million active registered users. For instance, it teamed up with the radio giant Clear Channel in a distribution and promotional deal that aims at expanding the company’s strategy of acquiring content and sharing deals with traditional media brands.
Shamise (2005) acknowledges that, Yahoo’s response to customers queries through emails and fax is a significant boost for their business to fulfill the customers' satisfaction. This strengthens the brand-customer relationship while positively making an impact on their reputation as quality service providers. This, together with their encouragement to their customers to email ideas and feedback, maintains close contact with them.
Pricing Strategy
The company off...