Reorganizing Yahoo Essay

1061 words - 4 pages

Almost twenty years ago in 1994, talk show hosts of the Today show were filmed stumbling over their words attempting to define a new technology called “the internet” (Pegoraro, 2011). At the same time, Jerry Yang and David Filo, two Stanford University graduates who had embraced this new technology, were working to develop a framework to organize the plethora of websites they had discovered on the internet (“The history,” 2005). This exceptionally organized list of websites formed the concept behind Yahoo, which soon became one of the most highly visited sites on the internet (Indu & Gupta, 2007). Yahoo did very well in the first four years, but before long it was clear that the company was in desperate need of a focused strategy. The decline in Yahoo’s performance was attributed to many factors including the company’s inability to produce sufficient revenues from “search-related advertising,” failure to fully integrate new acquisitions, and a complicated organizational structure (Indu & Gupta, 2007, p. 1). The company took these factors into serious consideration to resume the evolution of the company. Today, Yahoo’s financial outlook is promising.
In order for improvements to be made it was imperative for Yahoo to identify the main factors that were causing the company financial turmoil. Yahoo had success in their ability to drive internet users to the website. In fact, they had surpassed their competitor, Google, in 2006 when Yahoo brought in 120 million more monthly visitors (Indu & Gupta, 2007). Though Yahoo attracted more visitors, Google brought in significantly more money ($5.4 million) per million visitors (Indu & Gupta, 2007). It was apparent that Yahoo needed to develop a more effective advertising method to boost their revenue. Additionally, thought Yahoo’s was quite capable of finding promising new businesses to acquire they had not been successful in integrating these companies (or the new technology that came with the companies) into their existing structure. Therefore, the customer experience was not seamless with the new services that the acquisitions brought to the table. For example, Yahoo customers had to separately log into each service (Indu & Gupta, 2007). Furthermore, Yahoo’s complex organizational structure added confusion to their operating procedures and delayed the company’s ability to make vital business decisions. Yahoo lost out on lucrative opportunities, such as the purchase of YouTube, because they could not make timely decisions (Indu & Gupta, 2007). Employees felt that the management style of the organization stifled their creative talents (Indu & Gupta, 2007). These factors severely affected Yahoo’s performance.
Reorganization was crucial for Yahoo to prepare the company to face fierce competitors like Google. The company took action to address the factors that were detracting from their performance. To enhance their revenues Yahoo developed new relationships, took advantage of existing website features,...

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