Essay on Industry Analysis of Yahoo Inc

Published: 2022/01/11
Number of words: 1681


Yahoo Inc. is undoubtedly one of the leading global internet services providing company. This multinational corporation offers various internet service products for its world wide market. However, recent technological and other aspects have made the company lose its profitability index. The purpose of this paper is to analyze the industrial situation of Yahoo Inc. It analyses the company’s market position, its competitors, buyers and market influence in relation to barriers of entry. The treatise will also give a future perspective of the industry in which Yahoo Inc. operates.


Yahoo Inc. is an American multinational internet providing corporation with its headquarters in California. The company has reputation for its search engine, web portal and search services. Other service offered to consumers by the firm includes Yahoo directory, advertising, video sharing, and Yahoo financing. The corporation is perhaps one of the most popular web portal providers in the United States of America (Koogle, 2000). Of all time, the company has a reputation of being the most successful startup corporation in the country. The corporation has successful rating in terms of its cultural impact, growth, market capitalization and revenue. It is an estimated that 700 million people visit the website on a monthly basis.

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On a global scale, the company projects that over half a billion people of diverse nations, visit the website on a monthly basis. The competitor base for Yahoo Inc. has increased over years. These competitors have made Yahoo transform itself in order to meet consumer needs as well as attract more customers. The company management team has undertaken various strategic moves to counter advances from rivals and competitors. The company has resulted into re-branding, advertising and other measures to lure customers. The company has resulted in providing better storage and tracking of personal data (Datta, Joshi, & Wang, 2008). It now offers better communication services. In respect to such measures, the company rolled out an email service in the year 2007 that would see customers benefit from unlimited storage of personal information. The corporation has further improved on its content provision, co-branded with other companies and now offers mobile services (Koogle, 2000). The company therefore, has various strategic goals regarding their competitors and various aspects.

Rivalry among Competitors

There are various companies, which rival Yahoo .Inc products. With the growth of market share and need for different services, various internet companies have been set up. Some of the company’s rival competitors include Google. Inc, Facebook Inc, Yutube,, Ebay, Microsoft Corporation. These competitors have had an influence on revenue of the company as well as its market share. In terms of market share Yahoo, Inc holds a 4.12% of the market share; Facebook holds 11.16% of the market share on the advertising segment. AOL Inc on the market segment holds a percentage of 1.84. Google Inc on the advertising segment holds a 67.02% stake (Kriegel & Schubert, 2002). There have been continuous campaigns by rivals of yahoo to increase their market share and other competitive aspects. This has made yahoo lose considerable ground on its market share.

According to data from market research firms, yahoo market share has dropped by 12.8%. The corporation has struggled to maintain its market share, but despite various innovations it continues to lose ground. Current changes in the internet provision market have been low in the recent past. There has been various policy changes and innovation that has led to low cost for switching brands. This has made it possible for Yahoo to maintain a customer base. Yahoo has a loyal buyer base who benefit from its acquisition of new technology, the company strategy of advertising and its application in over 30 languages make it remain profitable (Chapelle & Chang, 2011).

However on the negative side Yahoo Inc faces challenges from movement of its competitors. Some of the previous Yahoo partners are now its rivals; this has made the switching cost of the buyer to be higher. There is also a high demand for internet services, which promotes growth of other corporations.

Barriers to Entry

In the internet market service provision segment, there is a large pool of corporations. The presence of such large number of companies in the industry is due to the attractive profit available. The industry is also competitive therefore, making it a free market. Moreover, there has been an increase in competition in this market with the low capital investment requirement as compared to previous years. Laws and regulations additionally are not prohibitive for new entrance. The laws in force on the industry are favorable for all players despite their area of operation or country of origin. These laws relate to privacy and buyers rights (Goeldi, 2011). Such laws cover an international platform with provision for changes based on international standards. Start up cost for this industry is considerably high for new entrants but fair compared to previous requirements.

There have been various attractive products in this market that has seen Yahoo lose its market share (Goeldi, 2011). Competitors use technology to develop more attractive products; buyers’ growths have surpassed yahoo’s ability to provide services and the uncertainty of the industry makes competitors more aggressive. From recent research information, it is evident that Yahoo has been in recent time struggling to make profits (Datta, Joshi, & Wang, 2008). This therefore, shows that the market is uncertain while the pool of competitors is growing by the day.

Influence of Substitutes

There has been an increase in the number of corporation offering same products to the buyer as that of There has been an increase in the market share of AOL Inc and a slight drop in the market share of Yahoo. This relates to the low prices of products AOL is offering in comparison to Yahoo Inc. In previous years Yahoo was on the top of internet service provision. But recent data indicate that Google Inc as the leading provider for such services. This trend relates to the low switching cost of buyers from Yahoo and other industry players. It is also evident that service quality is another factor that makes buyers switch. Moreover, the market for internet service provision is very competitive, and this means that buyers prefer corporations with low switching costs. Therefore in this industry, switching costs for buyers is dependent of other factors such as quality, features, advertisements and other aspects.

Bargaining Power of Suppliers suppliers supply products on the Advertising, professional, computer, internet and communication segment. The advertising segment represents a 2.43%, professional services 4.7%, communication segment 0.31%, and internet and computer segments 13%. Recent information about Yahoo suppliers indicates that there has been a considerable drop in their sale volume. It is indicated that there has been a drop in supplier sales by 2.51% by the year 2013. In relation to yahoo suppliers, they have a good reputation.

Therefore, it has been expensive for the company to switch such suppliers (Kriegel & Schubert, 2002). The company’s expenditure on suppliers is -39.89% of its revenue. The companies include Cisco Systems, Motorola Solutions. Inc. these corporations have a capacity to supply products cheaply, large quantities compared to other competitors.

Bargaining Force of Buyers

Buyers for Yahoo products have been on the decline in recent years. This phenomenon relates to the availability of substitute products. This has made buyers purchase products in small quantities from different industry players. Buyers now have the freedom of choice from various products in the market. With the full information access in the internet services sector, buyers may switch to consuming low cost products. Buyers have a stake in Yahoo Inc strategy since products in the market are standardized. The firm has to come up with new products that might attract the declining numbers of buyers. Such strategies may include a change in technology, reduction of product prices and improvement of product information (Koogle, 2000).

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The market for industries offering internet related products is attractive for new entrance. There is full access to market information; costs of entrance are not prohibitive, and buyers market is growing. In recent years, many companies have entered this industry segments. This therefore, means that there is a strong market rivalry. This would mean that, substitutes for such products in the market are strong. When a market has a strong substitute base, buyer in turn has a strong bargaining power. The bargaining power of buyers in these markets makes it necessary for firms to develop attractive products. Firms therefore, for future prosperity have to develop products that are buyer friendly. Because there is sufficient evidence of Buyers’ growth in the industry project a brighter future for the industry.

Entrance of many industry players has made internet service provision a competitive venture. The industry has many sellers as well as buyers. These conditions relate to a global technological advancement, change in the economic conditions of people, social-cultural changes and different political and legal policies. For this industry, profit and loses is pegged on the number of buyers purchasing products. For a firm to succeed in this industry, consideration has to boarder on suppliers, buyers, substitutes and competitors.


Datta, R., Joshi, D., Li, J., & Wang, J. Z. (2008). Image retrieval: Ideas, influences, and trends of the new age. ACM Computing Surveys (CSUR), 40(2), 5-7.

Chapelle, O., & Chang, Y. (2011). Yahoo! Learning to Rank Challenge Overview. Journal of Machine Learning Research-Proceedings Track, 14, 1-24.

Ester, M., Kriegel, H. P., & Schubert, M. (2002). Web site mining: a new way to spot competitors, customers and suppliers in the world wide web. In Proceedings of the eighth ACM SIGKDD international conference on Knowledge discovery and data mining. Retrieved from

Goeldi, A. (2011). U.S. Patent No. 7,974,983. Washington, DC: U.S. Patent and Trademark Office.

Koogle, T. (2000). Building Yahoo! Business Strategy Review, 11(4), 15-20.

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