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External Factors Affecting Yahoo Performance For Period [2004 To 2007] Fayez Alsoufyani

916 words - 4 pages

Environmental scanning is critical in building organizational strategy . In this report, three external factors , that were affecting Yahoo performance during the period January 2004 to December 2007, will be domenistored.

Historical Overview
During the period 2004 to 2007, Yahoo was considered a global Internet business provider and its site was one of most daily visited site. Yahoo site was acting as gateway for multifarious services for users. As per annual report for 2006, Yahoo was offering services including search , Email , recruiting ,dating ,auction , travel research and booking , shopping, local , web hosting , community , communication and information. Advertisement was the major source of revenue for Yahoo in addition to revenue of premium services provided to small business and consumer. Yahoo search technologies was main driver to increase site users and subsequently generate revenue from advertisements. Till June 2007 , Terry Semel was acting as chairman of the board and Chief Executive Officer for. The number of employee was 14,300 as in December 2007.

External factors impacting Yahoo During the period 2004 to 2007
In order for Yahoo to retain their users and attract new users, Yahoo was under pressure to develop and enhance their product and respond to new changes. Yahoo was unable to thrive and it was impacted negatively by external factors. From 2004 to 2007 , the net income of Yahoo has been dropped by more than 20% while net Income for Google in same period multiplied 12 times. In these report, three major external factors are identified that were impacting Yahoo performance during the period . These external factors are listed below.
Competition
Technology
Government and special-Interest group

Competition
During the period , Yahoo was operating in very competitive environment. Major competitors including Google , Microsoft , AOL were providing similar products that Yahoo was offering to the users. For example Google was competing with Yahoo in providing services such as internet search services , instant messaging , email and map. Yahoo also faced competition with traditional media company for the advertisement as advertisement in internet was accounting small portion for overall advertising industries . In addition to companies specialized in certain products like Amazon and eBay, there were also other competitors operating locally and having advantages over Yahoo in term of integrating their local communication with their services and direct billing relation with users.

Yahoo was underperforming its competitor especially Google . Yahoo failed in dealing with the competition. Although Google was a major competitor , Yahoo used as its search engine provider before replacing it with search engine acquired by of Inktomi acquisition. The acquisition was done in late 2002 and Yahoo was late in launching the Inktomi search engine in 2004. This action led to publicizing Google search...

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