Analysis of Challenges Facing Yahoo in Internet Business Portfolio and Provision of Potential Resolve to the Problems

Published: 2021-07-01
1651 words
7 pages
14 min to read
Vanderbilt University
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The purpose of the Memo:

The goal of this memo is to analyze three major issues facing the Yahoo Company that have restrained its focus to business excellence. The company has been experiencing robust technical and managerial challenges that have restrained its profit generation process. The biggest challenge facing Yahoo is the dwindling market performances. The area demanding rigorous interventions is the branding of the internet services. Although large number of the companys client base provides a flow approximately 700 million per month, the company's brand identity is suffering immensely.

Background// Context:

The current scenario facing the Yahoo Company is the enormous culture challenge. The analysis below uses the Henri Fayols principles of organization. The vibrancy and strength of Yahoo's culture begin with the customer suite. This aspect is the vitality and strength of the cultural side of the company that propels the worker's engagement and ultimate operational excellence. One of the challenges is that the business entity has not achieved real measures to capture its cultural aspects for a period. Yahoo has been perceived as a dwindling giant since its competitors such as Google has finally overtaken it in the field of search. The feeling of defeat has r infused among the company's workforce which is a measure of deteriorating standards of performance in the business (Sartain, 2005). In essence, the company's management has failed to note their ultimate responsibility of developing and sustaining a formidable and vibrant cultural framework. The company's management has failed to showcase their responsible managerial tasks and operations that promote a solid culture of excellence that would define the company's brand in the long-run (Afuah & Tucci, 2011).

As far as the company's products are concerned, it has large properties liked by many consumers. For instance, the financial attribute of the enterprise is one of the unique aspects that characterize the company's business portfolio. Despite the latter potential, the company suffers from a lack of innovative mechanisms for attracting the internet users into the company's portal as a start and end points. Another critical challenge for the company is the consistent decline in the revenues since 2010. In particular, the company's share price has also fallen over the same period to date. Recent Forbes analysis and reporting, however, showed that the company boasts of an implied valuation rated below zero (Swisher, 2013). The success of the Yahoo in the Internet business segment has been dwindling over time. In the current scenario, there has been increased demand for capturing visitors attention while there have been many approaches towards enhancing online clients. It has always been tough for the company to win by simple techniques of inducing money incentives and people engagement in the problem.

Yahoo has a soul challenge. In essence, no one understands what the company stands for. Subsequently, this aspect makes it quite challenging for the people within the company and outside to understand how to propel it to win. However, having the purpose does not guarantee success. When the corporate growth is very fast, and a company engages in rigorous marketing activities, it may be unnecessary to employ stronger core values such as commencing placement on the internet. However, when the economic situations grow tight, companies requires foundations to establish and fight to compete favorably. Leaders are large to blame (Dann & Haddow, 2008). As Mary Parker posits, workers must subscribe to the managerial authorities while leaders must govern organizations impartially.

Yahoo is a $1 billion international company specialized in the internet sectors under strong brand but minimal brand development. Yahoo is best known for their web portal, social media service sites, and search engines among other service portfolios. The company's revenue and income have stagnated from 2008 to date. The company has been engaging different CEOs in the last half decade. One of the company's CEO was compelled to resign due to a falsified resume. This scenario could have been associated with negative performance capacities of the company in the past. The companys intervention through hiring from within its senior executives and adopt highly obvious candidates from rival companies (Dann & Haddow, 2008). The obtaining of candidates from external sources is critical to redefining the position of the company in the web segments. In essence, the company must seek to enhance its corporate goals and focus as far as brand image is concerned.

Central Issues:

First, the company is facing a major challenge in its leadership where leaders have failed to shape up the companys fortunes as far as marketing is concerned. From the perspective of social-technical systems theory, technology limits the potential for redesigning of individual jobs. In this regard, the company's leadership is credited with the lack of stringent focus on brand image development that would spur growth in the long-run. Leaders are inherent sources of competitiveness of any company and must be ready to engage competitive capacities to perform effectively and efficiently (Wren, et al. 2002). Secondly, the company is suffering from weak brand positioning that limits its marketability about increased demand for the Yahoo services. The company has been conducting counter-productive advertisements. For instance, the extensive brand sensitization campaigns remained grossly ineffective.

Yahoo adverts are less efficient in the sense that they do not subscribe to significant benefits. The company lacks a competitive mechanism in which it conducts customer relationship management. In 2009, the company launched an extensive campaign on branding that was aimed at re-invigorating the company's brand and enhances the brand image in the long-run. This campaign did not and could not guarantee improved brand positioning (Afuah & Tucci, 2011). Any effective brand must provide the visitors with ample reasons to visit it and make purchases. The brand must also give uniqueness about other brands that can adopt a similar messaging. The company made recurrent changes in its leadership but failed to re-define its operations prospects and long-term focus. Besides, Yahoo failed to determine its strengths and competitive advantages and match them with the large market opportunities (Swisher, 2013). The company suffered from the poor brand image that derailed its competitive advantage towards the target audience. The identified campaigns hardly identified any specific audience failed to establish any distinct image rather than the renowned Yahoo's primary selling competitiveness.

In particular, the company does not have an effective listening platform for its clients and the market. This aspect results in a disproportionate understanding of the market and the customers' demand. The company's advertisements have failed to consider benefit-focused headlines but adopted criticism on the It's you,' campaign. Thirdly, change of leadership and flawed hiring process has been a major setback to the success of the company. None of the leaderships have been focused on enhancing corporate and brand image of the enterprise. Yahoo has been a consumer brand (Mahadevan, 2000). It provides for individuals to achieve what they need from internet segment. The start and end points are critical to achievements of the core business portfolio of Yahoo.

The process of fixing the Yahoo product line was the pioneer of all interventions of any prospective CEO hired in the company. However, this aspect was never realized. For instance, this product fixing perspective was adopted through realignment change that could manifest new opportunities for the company to partake in progressive growth. The search market share, however, has been down today compared to its first time opening (Swisher, 2013). However, despite the low rating as far as search field is concerned, Yahoo search engine does not rank any point near top best performing search engines such as Google.

Way Forward:

Based on the above incidences, various deductions can be adopted in the contemporary internet market segment where Yahoo locates its business. The analysis shows that the company is also highly undervalued while there remain several opportunities in the market that remains underutilized in the management controls and Board of Director to deduce essential values that benefit the entire group of stakeholders. The groups of the managerial task force that the company has been integrating into service have compromised its focus to revamped company's performance in the long-run. The dismal financial performances of the Yahoo coupled with poor management and absolute lack of accountability is a major element that has led to the perpetration of disregard for enhanced brand and preference in the market space of internet use. The company must establish unique by-laws that govern its operations. These regulations must accord leaders strict demand for accountability through serious penalties levied on individuals corrupting the resources of the company.

The company should also establish a long-term strategic plan that would manipulate its market performance and capacities in the market by endorsing new board members chosen competitively from the external sources and the global market segment. The company must provide a turnaround plan, asset sales, and separation which will manifest long-term growth capacity amidst low returns on capital investments. The current board of Yahoo encompasses among others, the company's co-founder, David Filo and Marissa Mayer who have been associated with abject failure in the company's corporate goals. Enhanced accountability and focus on long-term business excellence are critical areas of interventions that the firm engages in and a possible source of declining business placement in the international market. Furthermore, the position and delivery capacities of Marissa Mayer have been in doubt for long. Subsequently, the company must adopt competitive hiring processes that promote new entry of professional managers with potential delivery capacities.



Afuah, A., & Tucci, C. L. (2011). Internet business models and strategies. New York:McGraw-Hill.

Dann, G. E., & Haddow, N. (2008). Just doing business or doing just business: Google,Microsoft, Yahoo! and the business of censoring Chinas Internet. Journal of BusinessEthics, 79(3).

Mahadevan, B. (2000). Business models for Internet-based e-commerce: An anatomy. Californiamanagement review, 42(4).

Sartain, L. (2005). Branding from the inside out at Yahoo!: HR's role as brand builder. HumanResource Management, 44(1).

Swisher, K. (2013). Physically Together: Heres the Internal Yahoo No-Work-From-HomeMemo for Remote Workers and Maybe More. AllThingsD, February, 22.

Wren, D. A., Bedeian, A. G., & Breeze, J. D. (2002). The foundations of Henri Fayolsadministrative theory. Management Decision, 40(9).


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