Yahoo Case Analysis

Group 12
Omar Alahmady, Gina Brannon, Thanh-Thu Nguyen, & Talon Shukri

Company Profile

Founded by David Filo and Jerry Yang in 1994

The worlds largest global online network of integrated
services
Went Public in April 1996

Vision & Mission

Vision:
To deliver your world, your way.

Mission:
To connect people to their passions, communities, and
the worlds knowledge.

Value Chain Analysis

Financial Analysis Pt. 1

INCOME
STATEMENT
Net Sales ($mil)

EBITDA ($mil)

FY15

1225.67

133.81

FY14

1148.14

198.49

EBIT ($mil)

-18.6

49.34

Net Income ($mil)

76.26

6774.1

BALANCE
SHEET

FY15

FY14

Cash & Equiv.

($mil)

5882.05

11193.8
4

Total Assets
($mil)

41135.0

57297.6

Total Debt ($mil)

1217.41

1155.17

Equity ($mil)

28245.9
5

36713.5
7

Financial Analysis Pt. 2

Period
Ending:

Tr 12/3 12/3 12/3 12/3

e
n

1/20 1/20 1/20 1/20

14

13

12

11

d
Liquidity Ratios

214

375

438

286

Ratio

Quick

214

375

438

286

Ratio

Cash

177

254

324

170

Ratio

Current

Profitability Ratios
Gross

72% 71% 68% 68%

Margin

3%

13% 11%

16%

Pre-Tax

230

15% 105

17%

Margin

Operati
ng
Margin

Profit

163

%
29% 79% 21%

External Analysis (Porters Five Forces)

Threat of Substitution:
High

Supplier Power:
High

Competitive Rivalry:
High

Threat of new
entrants:
Low

Buyer Power:
Low

External Analysis (Life Cycle)

Yahoo Life Cycle Analysis:
Growth stage
Annual growth of 8.2%
Expected that the annual growth will drop the an
average of 7.7% between now until 2018

External Analysis (Macro Environments)

Political: regulation in countries such as China that alter its
policy to ensure the confidentiality of user information.
Economic: Yahoos outcome is reducing because the
amount of funds are willing to spend on advertising is
decreased.
Technological: the growth in technology has lead to a rapid
growth in mobile data traffic.
Sociocultural: with the new trend of sharing information
through video led to decline Yahoos fortunes.

Internal Analysis
VRIO Analysis:

Is the resource or capability...

Com
pete
ncy:

V
al
u
T
aa
nbl
g
i e?
b
l
e

R
e
s
o
u
r
c
e
s

I
n
t
a
n
g
i
b
l
e

R
a
r
e
?

Di
ffi
cu
lt
to
i
m
ita
te
?

Wi
th
ou
t
su
bs
tit
ut
es
?

Implicatio
ns for
competitiv
eness?

Internal Analysis
SWOT Analysis:
Stren Weak Oppo Threa
gths nesse rtunit ts
s
ies
S
tr
o
n
g
b
r
a
n
d
r
e
c
o
g
n
it
i
o

3
r
d
m
o
s
t
p
o
p
u
l
a
r
s
e
a
r
c

E
x
c
e
p
ti
o
n
a
l
e
m
p
l
o
y
e
e
s

I
n
f
e
ri
o
r
s
e
a
r
c
h
c
o
u
n
t
c

BCG Matrix

High market
growth
Low market
share
Potential for
more users
Increase in
market
development

Firm and Competitors Strategy

Differentiation
Market penetration
Product development
Concentric diversification
Key rivals include:

Strategic Recommendations
Question mark

High market growth

Low market share
Unsure of what to do with opportunities
Decide to increase investment or not

Acquisitions: 1997-July
Divestiture: Currently

2015

Questions?