Mayer's Challenges at Yahoo! Inc. (Research Paper Sample)

Case Study: Mayer’s Challenges at Yahoo! Inc.
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Case Study: Mayer’s Challenges at Yahoo! Inc.
Synopsis
The case involves the newly appointed CEO, Marissa Mayer, at Yahoo! Inc. She has sent mails to her employees exhorting them to continue working hard and keeping up their spirits, despite the many challenges that the Company faces. As honest as she seems, the e-mail indicates to the company employees that despite the CEO being pregnant and expecting her first child soon, she was still working hard until the late hours. Prior to that, the CEO had been scheduled to meet her bosses in Sunnyvale, California to present her strategy, which could, hopefully, turn the Company around. Notably, too, in the recent months, the Yahoo Inc.’s Board had been reconstituted to admit three members who represented one of the most outspoken shareholders. His outspokenness in the press had led the company’s previous CEO to resign in very embarrassing circumstances. Moreover, the company has faced a lot of challenges to the point of facing out its investment in the Chinese internet company of Alibaba. It should also be noted that Mayer does not have any managerial experience of the CEO, and in fact, she has been the twentieth person among those hired in the Google Company.
Findings
By taking the SWOT factors, financial factors included for analysis, the study will be able to gain deeper understanding of the company’s managerial, human resources, financial, production and differentiation, marketing and technology aspects. The aspects are very important in determining if the company will not achieve its sales and marketing, customer service, human resource and therefore financial objectives.
Yahoo’s SWOT Analysis Summary
StrengthsWeaknesses 
Easy and simple interface to use
Fast and much relevant search engine for customers
Many products that are well integrated
Its brands are recognised by over 350 million users
The company claims that it attracts over a half a billion customers every monthIts products do not have self customisation features
It is losing market value to Google
Most of its products such as news, mail services, financial data, shopping and business directory are provided by many players like Facebook, MSN and Google.
Some of the services the company provides are unknown to most internet users.
OpportunitiesThreats
Emerging market spaces in emerging economies
Partnering with other firms has enabled it to widen its marketing space
It can make ads for businesses that do not have online presence.
It has a huge potential to combine its services with those of other companies like Flickr
The number of mobile phone users in developing world is constantly increasing.Increasing competitions in local markets
Google’s strong presence is making Yahoo’ search engine services to decline
Due to high innovations, new entrepreneurs are likely to outdo Yahoo
The advertising business that it has dominated is continuously being taken over by Social sites such as Facebook.

Financial Standings Summary
COMPANY OVERALL PERFORMANCES (Yahoo, 2014b)
OVERALL 2014
Beta1.01Market Cap (Mil)$ 43,265.27

FINANCIALS 2014
YahooIndustrySectorP/E (TTM):5.7235.7716.57EPS (TTM):7.61______ROI:19.6516.3316.89ROE31.3120.7317.49
Net Income from 2004-12 to 2013-12
2004 200520062007200820092010201120122013Net Income (US Mil Dollar)839.61,877.4731.6639.2418.95981,231.71,048.833,945.481,366.28

Source: Yahoo! Inc. (2014a)
Strengths
One of the best positive attributes that the new CEO has is relevant package of experience that the company desires. She has been the head of innovation in search at Google for many years, and therefore she is much presumed knowledgeable in what internet users want to do while online; it will be easy for her to make it possible for them (Carlson, 2012). In this regard, analysts note that she is likely to borrow the experience from Google having been one of its top executives. At her points too, having been from a bigger company with such screening capabilities, she may have known the vantage points of Facebook, Amazon, Google and Apple (Carlson, 2012).
The new CEO has led to the improved performance of the company as it can be witnessed above in the financials. The volume of the publicly traded shares has been increasing steadily. This has been one of her reversals at the company. Its share price is now closing averagely at $27.34, from $15.65 when she took over. Otherwise, the general performance suggests that the company’s Beta is slightly above 1, an indication that it can slightly do better in the long run, despite the market/ sector volatility (Myatt, 2013; Sterling, 2014). Despite being already a widely known company, as the users are increasing, it is likely to be perceived as one of the most powerful on the market. Moreover, if it continues offering various services such as such as yahoo finance, search engine, web portal, yahoo mail, yahoo answers, yahoo directory among others, there is no doubt that the company could increase revenues. Its product portfolio now include yahoo mail, yahoo messenger, yahoo personal, Delicious, yahoo 360, yahoo Buzz, yahoo shopping, yahoo Mobile, yahoo real estate, yahoo boss, yahoo next, Y! Connect yahoo meme and so forth, which the CEO can easily benefit. Nonetheless, as the CEO has revamped the new interfaces of the web pages, it is expected that customers could double, which will obviously increase the revenue of the company, especially from mail.
Weaknesses
Its market share in search services has deteriorated as they only accounting for 6% of the whole share. Google has taken up about 83% of the total market share, while Baidu and Bing account for 6% and 4% respectively. Moreover, the company faces a reduced market share in the sense that competitors such as MSN, CNN, Money Control and E-bay offer similar products such as shopping, news, services, data and business directory services, mail services among others. In overall the company’s history of financial performance shows that it is still not performing well Nonetheless, its services are still not known well (Sterling, 2014).
The first challenge the new CEO faces is working to provide exactly the right direction according to what shareholders think Yahoo should go but she lacks any experience of a CEO. People are also asking themselves about whether she has what it takes to represent a publicly traded company in the eyes of the public or not. Nonetheless, some analysts are also questioning her on the marketing experience that the company executives seriously need (Tsukayama, 2012). The other problem is that the Yahoo Board is now filled with very outspoken people who do not fear to air grievances about the Company in the media/ public. Daniel Loeb, an activist investor, is now a board member, and as it is expected, together with others like Michael J. Wolf and Harry J. Wilson, he will never let any wind of discrepancy to go (Tsukayama, 2012). The Media has been depicting Yahoo in the public, as the Company that lacks good reputation in the eyes of consumers. Some security companies have been complaining about their data bases with the Company being hacked (Tsukayama, 2012; Myatt, 2013). Currently, although the CEO has given birth, she is facing the test to balance between her job and home life (Tsukayama, 2012). The other problem is unstable Partnerships. As some of the Company’s revenue streams are derived from partnerships with telecommunication companies such as AOL, Yahoo can be in jeopardy if they decide to change the channel or if they collapse (Tsukayama, 2012).
Opportunities
The company can enjoys from the increasing market space in developing countries due to increasing affordability of mobile phones. In this regard, it is now well known with over 700 million users worldwide who can be more effective in connecting to each other through smart phones and other mobile devices (Carlson, 2012). The CEO has also orchestrated the purchase of Internet blogging services such as Tumblr and Flickr photo services, and redesigned and upgraded some of the photo services in a bid to increase the revenue of the company. Accompanied with this in the same direction has been the company’s general increase in net revenues as it can be seen above. Mayer is now focused on redesigning the Company’s home page, and it is appearing to win over many Web surfers. With its social media, it will be essential to tap advertising services of many firms that are making their ways on the internet. The company has a huge potential of combining its service offerings with those of other companies such as Flickr and AON. It can also focus on diversification of its space on the internet space.
Threats
There are increasing competitions in most local markets especially in China where companies such as Baidu are holding feet. If it has ambitions of expanding in foreign markets, the CEO is challenged to make sure that it does not fail the test of foreign cultures. Nonetheless, emerging internet-based entrepreneurs are coming up with superior innovation that may outshine the company’s quality of products. Since social marketing is attracting many companies, the CEO should be prepared to produce services that are superior to those Myspace and Facebook.
Options
Option 1: Maintaining the Status-quoDescriptionCostsThis will require continuing with the existing management systems and processes.Current costs are likely to increase and therefore revenues are likely to growRisksBarriersFinancial results could ...