THE DEVELOPMENT OF YAHOO INCORPORATED


 


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YAHOO: COMPANY BACKGROUND


 


            Yahoo was founded in 1994 by Masters candidates for Electrical Engineering     and     . It began as an idea, turned into a hobby and later evolved into a full-time passion (2006). The two founders of the company started with a guide in April 1994 as a way to keep track of their personal interests on the Internet. They later observed that their home-brewed lists were becoming too long and unwieldy and they have gradually invested more time on the task. During the same year    and     converted Yahoo! into a customized database designed to serve the needs of the thousands of users that began to use the service through the closely bound Internet community. They developed a customized software that helped them efficiently locate, identify and edit material stored on the Internet. The name Yahoo!  was supposed to stand for “Yet Another Hierarchical Officious Oracle” but      insisted they selected the name because they considered themselves “yahoos”. Yahoo! itself first resided on    ‘s student workstation, “” while the search engine was lodged on  ‘s computer, “.”


           


            Today, Yahoo! contains organized information on tens of thousands of computers linked to the Web and has evolved into a global brand that has changed the way people communicate with each other, conduct transactions and access, share, and create information. An executive team that includes Chairman and CEO      , Chief Operating Officer      , Chief Financial Officer     , Chief Technology Officer   , and Co-Founders/Chief Yahoos       lead the world’s largest global online network of integrated services. The company is headquartered in, California, with offices around the globe. The company offers a broad and deep array of products and services that provide users with the power to connect, communicate, create, access, and share information online (2006; 2000).


 


 


THE EXTERNAL FACTORS IN THE GROWTH OF YAHOO AS AN ORGANIZATION


 


            The success story of Yahoo began with         purpose to establish an efficient and elegant way to find things and information on an obscure part of the Internet, the World Wide Web, and therefore assist their fellow students at Stanford.  They decided to collect all the sites they have visited and categorize them.  Then, they took the dozens of categories and reorganized them into larger classifications.  Their customized database and software was made available through the service of the local Internet community (2003).  As the number of users accessing the database and the number of websites that it contained increased,        saw problems with Stanford’s limited hardware capacity. The university could not afford more servers so          were advised to find another host (2002, p. 13). In early 1995     , co-founder of in, California invited      to move their files over to larger computers housed at (2000).  After solving the server problem, the two Stanford geniuses were faced with financing issues regarding their creation. They teamed up with classmates, the founder of      computers, and      , a sophomore M.B.A student at Harvard, to come up with a business plan.  In March 1995,     , with the help of      , had their business plan, and they asked        , a Stanford M.B.A., to critique it. The business plan set forth Yahoo’s ambition to become the “TV Guide” of the Internet. The plan clearly called for an advertising-based model that, in some ways, was remarkably similar to Yahoo as it exists today. To attract advertisers and build market share, Yahoo would add content such as “news feeds” and create a sense of community through bulletin boards and chat groups. Personalization, as it would later appear in My Yahoo, was already part of the package, and one the company’s founders were considering a potential source of subscription revenue. The business plan further listed     as president and CEO while     appeared as chairman and chief financial officer (CFO). On March 5, Yahoo was incorporated, and in April, it landed million in venture funding from, in its first investment in a dot-com (2002, pp. 15-17).  realized that Yahoo! could be much more than a stopping point on the way to millions of other sites so he pursued meetings with media companies like Reuters and Ziff-Davis, and began referring to Yahoo as a full-fledged media brand, akin to any major magazine or TV network (2003).


 


            Yahoo is a leader in clever business practices, such as targeted advertising: as users searched for their personal interests, the company displays advertisements based on those interests. As a result, Yahoo is able to charge high advertisement rates and is one of the first Net companies to show a profit (2003).  The company aims to provide a comprehensive set of Internet marketing solutions for advertisers.  There is a continuous growth in the advertising market and an increasing shift in advertisers’ use of online media as consumers and audiences seek more convenience from the Internet than the traditional media.  Yahoo is committed to capitalizing on the online advertising trend through creation and execution of Internet marketing solutions that both engage users to interact with advertisers’ brands as well as provide valuable insights into the customer base (cited in 2005, pp.4-5). The company is also committed to empowering its users and employees through programs, products, and services that inspire people to make a positive impact on their communities. The mission of Yahoo! for Good, the company’s community relations program, is to connect people with causes through its products and services, as well as through partnerships with nonprofit organizations such as,  (2006).


 


THE SIGNIFICANCE OF THE DEVELOPMENT OF THE VIRTUAL ENVIRONMENT, VIRTUAL ORGANIZATIONS AND VIRTUAL TEAMS IN THE OVERALL SUCCESS OF YAHOO


 


 


            The Internet was more or less virgin territory in 1994 when hatched an idea for a directory service to help people navigate the Web (2000, p.1). As years passed, the Internet has undergone complete metamorphosis. The first wave was the standard HTML browser. Now, blogs are burning with speculation, many connecting the dots to the concept of the web as a computing platform. All that guesswork underlines another fundamental shift in the web: the move away from static web pages to a more interactive; real-time environment.  The second wave was mobile devices like phones and PDAs that can access online content.  The Third Wave will be literally thousands of different devices and designs that show information people care about in forms that are embedded in things like watches or umbrella handles, increasing the utility of everyday objects. Another sign of the changing web environment is AJAX- Asynchronous JavaScript and XML, a web development technique for building interactive web applications so they behave more like regular software that resides on the user’s personal computer. Some examples of AJAX in use include Google Maps and photo-sharing site    (2006, p.1). Today, the Internet has dramatically changed the way in which individuals exchange information and the amount and types of information that are readily available. To most, the Internet provides a relatively seamless conduit across computer platforms, remote locations, and time zones. The best Internet minds and organizations continue to tackle the challenges of enhancing this Internet seamlessness, making the Internet faster, more robust, more versatile, more effective and more convenient for sharing research efforts with and among students and professionals across the globe (2006).


 


            (2006) reported that there is a need for an enormous and extensive amount of innovation to try to keep up with the increasing popularity of the Internet. Right now, most entrepreneurs are spending their intellect and efforts on keeping their websites updated, improving search engine rankings and investigating online marketing opportunities.        vice president and general manager of Yahoo! Small Business, is keeping an eye on the future of growing businesses and the web. He also sees more businesses adopting blogs as a way to communicate frequently with customers (p. 2).  Presently, Yahoo not only evolved into an all-important interactive portal and gateway for advertisers to reach potential consumers and investors; it also became an actual destination and a strong Web community. The Yahoo founders indeed made a big contribution to the evolution of the web. With its many electronic commerce initiatives, Yahoo! is now perfectly positioned to take home the billion online consumer sales projected this year by     . Yahoo rules the Net and has filled the need for an effective surfing tool to drill through the Web’s seemingly complex environment. Yahoo is conceived by        as a destination where Web surfers could get whatever they wanted from the site’s personalized content, electronic commerce offerings, special promotions and other interactive data (2000, p.1).


 


YAHOO UNDER DAVID FILO AND JERRY YANG


 


           


, a Taiwanese native raised in San Jose, California, co-created the Yahoo! Internet navigational guide in April 1994 with      and co-founded Yahoo! Inc. in April 1995.   , a leading force in the media industry, has been instrumental in building Yahoo into the world’s most highly trafficked Web site and one of the Internet’s most recognized brands. A member of Yahoo’s board of directors, works closely with the company’s chief executive officer and executive team to develop corporate business strategies and guide the future direction of the company (2006).  


           


            A Stanford professor named      said that one of     ‘s strengths is his ability to apply what he learns in daily life. He can channel his everyday experiences well (2002, p. 15).       disclosed that on the outside, Yahoo is a fun and irreverent place, but on the inside they are extremely competitive. Yahoo is a pretty recognizable brand name. He said that Yahoo is continuously concentrating on what it has always done, which is to create the best possible online directory, adding content and other features along the way when it makes sense (2006). Yahoo has grown powerful, in part, due to     ‘s insistence, prescience and determination on cutting deals with hundreds of partners rather than making exclusive agreements with just a few. As a result, the company’s market power has attracted some of the world’s top marketers, including Pepsi-Cola Co., Procter & Gamble Co. and Ford Motor Co.       has also put Yahoo in the forefront of broadband content delivery. With the acquisitions of      , he is clearly ready to play in a multi-channel universe with multiple content delivery systems. Yahoo! Everywhere, the company’s wireless initiative, enables users with wireless data phones to access Yahoo! from wherever they are. Yang is committed to continue to make Yahoo a bigger part of its users’ lives and to work for the ultimate goal of building the Yahoo brand to be something that makes users feel empowered on the Internet and, ultimately, form a long-lasting relationship that the users trust (200, p.1).


 


            , a native of, Louisiana, is      ’s partner in conceptualizing the search engine in 1994 and co-founder of Yahoo! Inc.     serves as a key technologist, directing the technical operations behind the company’s global network of Web properties (2006).  He believes that the basic function of Yahoo corporation is to take all the new websites and online information that thousands of people are producing everyday and organize them to make them useful.  He sees their effort since the beginning as a work of passion and not geared towards fast money. Yahoo is regarded by      as working to be a significant part of the Internet industry. declares that
generally, the Internet is not that reliable, so the company’s blips in service do not cause major problems. However, they are certainly working on improving the company’s own reliability as well as those sites that it depends on (2006).


THE CHALLENGES AHEAD AND RECOMMENDATIONS


           


             (2004) stated that ten years ago, he and     were concerned on a simple yet vast problem: finding better ways to aggregate and organize information so people can find it. Today, the challenge for the two founders of Yahoo is different. There is a lot more information to aggregate and it is not just more in terms of quantity; there is a larger variety of content as well — from products and images to news and business information. In addition, Yahoo is pulling content from more sources than ever before. Meanwhile, the users’ expectations have also changed.  Provision of simple structures for users to find what they want and need on the Web no longer suffice. Today, people expect to find precisely what they are looking for exactly as it relates to them. People want to define what is relevant to them in their own personal way. They also want to tap into the source of their information at will and they want to manage it all to personally suit their needs.


            The challenges that will keep Yahoo busy for at least another ten years are the issues on what else can it do to take online search to the next level.  It has to address the growing need to make search even more useful and accessible to the users.  Yahoo’s job is to stay ahead of consumer needs and expectations and, based on the responses of the users, it is doing a good job so far.  But the road is still a long way off and the company is young. The challenges that lay ahead are the reasons for the excitement and drive of the Yahoo employees, especially the two Founders. They are anticipating the possible future real solutions to people’s problems and thus, make a difference. The Yahoo people firmly believe that the technology they are building today makes the future of the Web even more useful, informative, and entertaining. As long as there is a way to help people find more precise and more relevant information on the Web, Yahoo will be in the midst of things searching for it (2004).


 


            Another powerful weapon for the company it its spirit since the start which has to be maintained. The Web site is still one of the most powerful forces in the Internet revolution that is transforming the global media. The big shift is that Yahoo is no longer trying to create the revolution in opposition to the establishment. It is fomenting revolution from within.     , the company’s chief sales officer, has a mission to promote the Web as the future of advertising. Yahoo’s front page draws about 25 million visitors a day, and it has become a powerful tool for launching new product lines, such as Coke’s C2 and Ford’s F-150.  Buying all the advertisement space on the front page for 24 hours now costs an estimated 0,000 to million, and the advertisment will be seen by more consumers than the typical daily audience of the Today show. Yahoo has to make a good impression to advertisers as they are less impressed than the audience and the public (2005). 


            Moreover, the company has to rethink its centralized management
structure to accommodate a changed competitive landscape. Yahoo had accumulated 44 operating units, each headed
by a general manager, few of whom had budget responsibilities
and the authority to make sweeping changes. Major deals and
shifts in strategy were still dictated by upper management,
slowing the pace of progress and leaving the real power concentrated
at the top. Yahoo’s continuous need is a seasoned executive to run a business with 3,000 employees and about 200 million monthly users that had
no real prototype (2002, p. 231).


 


 


 


 


 


 


 


 


 


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