B al anc ed Scorecard for Yahoo

Th e R e port Pr epa re d b y, 3 rd Ye ar Ma rke ti ng S tud en ts

Sub je ct : I nt ern et Ba se d Ma rke t ing (B MKT 32 542 ) Le ct ure r: Mrs. C. B . Wi je sund ar a

nd d Se me ste r: 3rd Ye a r 2n Se me ste r, 2 009

Department of Marketing Management University of Kelaniya

Group Me mbers

Thakshila S. A. G Rajapakshe R. L. A. G. S. Ranathunga H. H. S Dilanga E. A. J Wijerathna W. A. K. P. Kumara W. A. T. S.

CM/2005/224 CM/2005/180 CM/2005/183 CM/2005/041 CM/2005/247 CM/2005/120

Ac kno w ledge ment

This assignment was prepared for the purpose of developing the balanced scorecard for yahoo. We are really grateful to our Internet Based Marketing Lecture Mrs. C. B. Wijesundara for giving advice. As well as I thank to all those who helped in the preparation of this assignment. Thank you for all.

Co n tent

Introdu ction His tory Produ cts and s er vices of Yaho o Com petitive ana lysis o f Yahoo S WOT Analys is Ba lance Scoreca rd for Yaho o Cus tom er Persp ective Interna l Pers pective F ina ncial Pers pectiv e Innov ation an d Lea rning Persp ective

01 02 03 04 05

07 08 09 10

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Introd uction

This assignment is focusing on to develop the Balanced Scorecard for Yahoo. The balanced scorecard consists with four perspectives. They are customer perspective, financial perspective, internal perspective and innovation and learning perspective. This assignment consists with history of Yahoo, products of Yahoo, competition of Yahoo, SWOT analysis of Yahoo and the balanced scorecard for Yahoo in the form of goals and measurements. Firstly, this assignment is presented that the history of Yahoo incorporation. Yahoo incorporated is an internet service provider that serves both users and business globally. Yahoo Inc. has become the worlds largest global online network of integrated services. Then the report is presented the products and services of Yahoo. They offer products such as Yahoo Search, Yahoo Toolbar, and Yahoo Search on Mobile, Yahoo Local, Yahoo Yellow Pages, and Yahoo Maps that allow user to navigate the internet. Then after competitive analysis of Yahoo; there are many search engine on internet but main parties of search engine is Yahoo, Google and MSN. So Yahoo mainly competes with Google and MSN and the market leader of that is Google, they have 81.09% market share. Then the report presents SWOT analysis of Yahoo. This SWOT analysis helps to develop the Balance Scorecard for Yahoo. It helps to develop goals and measurements for balance scorecard of Yahoo. Then the report develops a Balance Scorecard for Yahoo. By using this Balance Scorecard, anyone can get better idea about the performance of Yahoo web site.

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History

Yahoo incorporated is an internet service provider that serves both users and business globally. Yahoo Inc. has become the worlds largest global online network of integrated services. Yahoo currently has 500 million users worldwide that visit the site each month. Yahoo is provided to users in more than twenty different languages. The company was founded in 1994 by David Filo and Jerry Yang who were attending Stanford Universitys PhD program. In April 1994, "Jerry's Guide to the World Wide Web" was renamed "Yahoo". Yahoo began as a hobby for Filo and Yang and has now evolved into a multifaceted brand that serves internet users worldwide. The Yahoo domain was created on January 18, 1995. Yang and Filo realized their website had massive business potential, and on 1 March 1995, Yahoo was incorporated. On April 5, 1995, Sequoia Capital provided Yahoo with two rounds of venture capital. On 12 April 1996, Yahoo had its initial public offering, raising $33.8 million dollars, by selling 2.6 million shares at $13 each. Yahoo was incorporated in California in March of 1995. Yahoo first went public on NASDAQ in April of 1996. At this time Yahoos stock opened for $13.00 per share. At the close of its first day of the IPO, Yahoo stock had reached a closing price of $33.00 per share. At this time the company only had 49 employees. The company was then reincorporated in Delaware in May of 1999. In December of 1999 Yahoo stock was added to the S&P 500. In 1996, Yahoo began entering into joint ventures with SOFTBANK. Through this initial joint venture, Yahoo was able to create Yahoo Japan. Yahoo has teamed with SOFTBANK to create markets in Germany, United Kingdom, France, and Korea. Yahoo has also teamed in a joint venture with VISA to establish Yahoo Marketplace. This joint venture occurred in August of 1996 and has since then created a navigational service focused on information and resources for the purchase of consumer products and services over the internet. Most recently, in January 2006, Yahoo and Seven Network Limited, also known as SEVEN, have teamed in a joint venture. In this agreement, Yahoo contributed its Australian internet business, Yahoo Australia and New Zealand, and SEVEN contributed its online assets, television and magazine content. Yahoo has a fifty percent equity ownership in the joint venture which will operate under the name Yahoo7. Yahoo also operates Flickr, a photo sharing and storing website.

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P rodu cts an d Se rvic es of Y ah oo

Yahoo Inc. provides internet services to users and businesses worldwide. It offers online properties and services to users; and various tools and marketing solutions to businesses. The companys search products include Yahoo Search, Yahoo Toolbar, and Yahoo Search on Mobile, Yahoo Local, Yahoo Yellow Pages, and Yahoo Maps that allow user to navigate the internet and search for information from their computer or mobile device. It also offers marketplace products that comprise Yahoo Shopping, Kelkoo, and Yahoo Auctions for shopping; Yahoo Real Estate for real estate information; Yahoo Travel, an online travel research and booking site and Yahoo Fare Chase, a travel search engine; Yahoo Autos to price and compare cars online; and Yahoo Personals and Yahoo Personals Premier for online dating. Yahoo provides information products, such as Yahoo News that aggregates news stories; Yahoo Finance that offers financial resources; Yahoo Food, an online food destination; Yahoo Tech that offers information on consumer electronics; and Yahoo Health, a healthcare destination. Its entertainment offerings comprise Yahoo Sports, Yahoo Music, Yahoo Movies and Yahoo TV, Yahoo Games, and Yahoo Kids. Communication products include Yahoo Mail and Yahoo Messenger with Voice; communities offerings include Yahoo Communities and Yahoo Photos; and front door products comprise Yahoo Front Page and My Yahoo. In addition, it offers Yahoo Broadband, Yahoo Digital Home, Yahoo Mobile, and Yahoo PC Desktop to access its content and communities across internet-enabled devices. Further, it provides Yahoo Hot Jobs, an online recruitment solution; Yahoo small business to purchase products on the internet; and Yahoo Local that offer businesses a service to post company information. It has strategic partnerships with Seven Network Limited; eBay; AT&T, Inc.; and Verizon Communications, Inc.

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Compe titiv e An aly sis o f Yahoo

There are three main search engines on internet such as Yahoo, Google and MSN. Therefore, the major competitors of Yahoo is Google and MSN in addition to that there are some another search engines on internet like AltaVista, Fast, HotBot, Lycos and DogPile etc. The following table can be expressed that the market share of world wide search engines, Search Engine Google Yahoo MSN Others % 81.09% 10.45% 3.03% 4.70%

The following table shows that the comparison between Yahoo and Google under some criteria, Google 121.67B 20,164 6.20% 22.12B 61.06% 4.34B Yahoo Industry 19.56B 44.26M 13,600 184 -13.10% 15.40% 6.97B 71.16M 57.41% 63.73% 5.02M N/A

Market Cap: Employees: Qtrly Rev Growth (yoy): Revenue (ttm): Gross Margin (ttm): Net Income (ttm):

According to above information, in all the aspects, the search engine named Google is the most popular search engine among the worldwide internet users and it is well established and well performed search engine compare to yahoo. Yahoo and MSN Search serve up millions of searches every day and will deliver significant traffic. Since most sites concentrate on Google, an opportunity exists to get targeted traffic from their competitors. The major search engines are in a dog fight to increase market share and improve their search results for the consumer. This means that they often make changes to how they rank sites.

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SWOT Analysis of Yaho o

Strengths
Yahoo has beaten Google in the mobile market. Yahoo has many more auxiliary products compared to the competition. Yahoo has strong brand recognition. Yahoo has a strong and talented employee base Access is available to anyone with internet access. It has partnerships with MLB, VISA and NFL. Yahoo focuses on affiliate advertising for large advertising accounts. This is an important income stream for Yahoo It has strategic partnerships with Seven Network Limited; eBay; AT&T, Inc.; and Verizon Communications, Inc. It has a original source of structured information directory which has built over the last decade.

Weaknes se s
Google search results generate twice as much revenue as Yahoo Advertising revenues are falling due to Google and other competitors in the market Differentiation is difficult for Yahoo because almost all of its packaged services are available from other sources
As technology develops and new unforeseen advertising media emerge,

the future is uncertain for these income streams online advertising

The income stream that is derived from partnerships would be affected if

ever this channel is changed or removed. Yahoo is ranked 5 in visitors among video sites. YouTube which is owned by Google is ranked 1 Yahoo image search has been declining 3% per year.

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Opportunities
Internet video advertising spending expected to increase by 82% to $410 million by 2006. Yahoo has purchased Flickr. Broadband expansion Yahoo has penetrated markets that are still untouched by competitors. Mobile technologies offer another opportunity for Yahoo. The Development of the Yahoo Directory has potential for new business and income streams.

Threats
Google search engine has 81.09% market share and yahoo search engines has 10.45% market share. Consumer attitudes towards online advertising may become more negative. Increasing the strength of competitors. Social websites such as My Space and Face book are now breaking into the online advertising market. Google is surpassing Yahoo in revenues (22.12B Google and Yahoo 6.97B) International, culture specific competitors could affect Yahoo in the future, unless strategic alliances are forged.

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Bal ance Scorecard fo r Yahoo

Cu s to me r Pe rs p ec ti ve
Goals Increase the awareness about the Yahoo Mobile photo sharing service Increase the brand loyalty of Yahoo Measurements Conducting a awareness survey Number of users of Flickr Conducting a survey Increment of the sales Increase the image search on Yahoo Number of downloaded of image Number of users of image searched Encouraging advertising on the Yahoo site Increase the customer satisfaction with Yahoo video sites Number of advertising on Yahoo Number of online purchases Conducting a survey Number of complains Increase the searches on Yahoo as a search engine Improve the consumer attitudes towards online advertising Increase the private advertising with Yahoo Growth of sales on online advertising ads Recurring revenue on private advertising Number of banner advertisement Growth of broad brand customers Number of users of Yahoo Number of hour spending using the internet Increase the utilize of all form advertising media to convey their products to the geographical audiences Build strong relationship with partners (MyBlogLog Flickr, MLB, ViSA and NFL) Number of advertisements on online print, television, radio and outdoor. Conducting products awareness survey Growth of income generated by partners Number of searchers on Yahoo

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Int ern a l Pe rsp ec ti ve

Goals Improve the talent and skills of Yahoos employees Measurements Time of the services delivering Skill set ratio Return on employee Increase the Flickrs capabilities Growth of image search on Yahoo Increase the effectiveness of Yahoo search Number of visitors to search with engine Yahoo Increase the quality and relevance of the search results Comments on search results

Improve the personalization of the online Number of offered personalized online services that Yahoo offer services Improve the creativity of the marketing Number of attracted advertisers solutions Increase the research and developments Number of new products Growth of R&D expenditure Improve the cost effectiveness of Yahoo Costs to income ratio Improve the effectiveness and quality of Number of geographical market providing for the unique cultural segments idiosyncrasies of each geographic market Conducting a survey segment Times scale of delivering service Provide quality services customized marketing Customer loyalty survey

Improve the effectiveness and quality of the Number of selling of marketing direct sales team services and solutions to large advertisers Improve the effectiveness and quality of the Time of delivering services direct sales team Appropriateness of the services Attract services Increase the effectiveness of pay per click Time saving of PPC marketing launch service Relevance of the expected rasult the advertisers to marketing Number of advertisers with Yahoo

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Fin an c ia l P ersp e ct ive

Goals Increase revenue on private advertising Decrease the cost of goods sold of Yahoo. Measurements Growth of private advertising Costs of goods sold Gross profit Annual trend line Increase the research and developments Increase the net income for online products Growth of sales Market share growth Utilization of assets Maximize the returns Become the Industry leadership Profitability Increase at least a 15% net profit in two years of new products Increase individual customer profit Average over value Profit contribution overtime less customer acquisition cost Double-digit sales growth Dollars volume of sales from one time period to the next Reducing servers cost Have economies of scales to reduce servers cost Increase conversion rates at web site Number of orders divided by number of visitors to site Achieve 8% ROI within one year for each new products Minimize the customer acquisition costs in online channel Customer acquisition cost (Costs for advertizing divided by number of customers) Return on investment capital Number of new products Growth of R&D expenditure Net profit ratio Annual growth rate of sales Market share percentage Return on total/fixed assets Return on equity Market share percentage Return on equity/ Earnings per share Net profit as percentage of sales

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Inn ov at io n a nd Le ar ni ng P er spe c tiv e

Goals Build social web site through Yahoo Measurements Number of social web sites on Yahoo Number of visitors of social web sites through Yahoo Collaborate with Flickr to develop a better Number of visitors to video site with video site. Continuance of product development Development in CRM system using Flickr tool. Number of new products Number of employee suggestions Number/type of improvements over time Innovation of online services Number of new service products to market in a year Percentage of sales from new services Number of new service features not offered by competitive offerings Increase number of new products Penetration of new markets Number of product lines Percentage of sales attribute to each new market Technology leadership Increase research and development Product performance benchmarking Number of new products of competency

Develop competencies critical to overall Percentage gaps that must be filled

development filled on tracking matrix

Increased value in knowledge management Number of accesses by employees system Number of knowledge contributions by employees