Yahoo!’s Long-Term Strategy: Diversify
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Yahoo sees itself very differently from the way Google sees itself. That leads to some clear differences in the two companies' strategies. The ten-year-old Internet portal applies a lesson that Google would be wise to learn: diversification is a good thing.
If you have been following Yahoo!’s various moves for the past several months, you may be wondering what the company is up to. Certainly some of it can be chalked up to competing with rival search engine Google, such as the expansion of storage space for its free email accounts. But that doesn’t cover all of it; indeed, Yahoo seems to be getting into areas that Google has hardly touched yet, and it is going about it in a carefully-thought-out, methodical manner.
In some ways, this shouldn’t be too surprising. At ten years old, Yahoo is an established Internet company. It weathered the storm when the bubble burst on the highly inflated values placed on Internet- and technology-rated stocks, coming out intact at the other end of a harrowing stretch that saw many companies go bankrupt. While its current stock price is less than a tenth of what it was at the peak of the Internet boom, a company that came close in 2004 to doubling the profit it made in 2003 – and more than doubled its revenue in that timeframe -- is nothing to be sneezed at. Also, while Yahoo hasn’t been very vocal about it, many of the services which Google is starting to make its name in are ones that Yahoo came out with earlier (Web-based email is the most obvious, but there are others).
Perhaps the biggest evidence of the difference between Yahoo and Google is apparent in the way they see themselves. Google is chiefly a search engine. In its U.S. Securities and Exchange Commission filings, it describes itself as “a global technology leader focused on improving the ways people connect with information.” Yahoo, when it started out, didn’t even have its own search technology. It states in its U.S. Securities and Exchange Commission filings that Yahoo is “a leading global Internet brand and one of the most trafficked Internet destinations worldwide.” The differences may seem subtle, but they are important, because they affect each company’s entire strategy.
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