Yahoo’s Strategy

Knowledge@Wharton writes:

From its inception, Yahoo has considered itself a media player, or — as Yahoo co-founder Jerry Yang has said numerous times in the company’s early years — a media platform. The company has held true to its roots as it has expanded by, for example, hiring journalists such as Kevin Sites, who reports from the ground in Iraq, finance columnists, including Wharton finance professor Jeremy Siegel, and writers covering everything from retirement to fantasy football.

Wharton marketing professor Xavier Dreze suggests that Yahoo’s approach has allowed it to fly under the radar and still compete with multiple players across many Internet markets. As a result, Microsoft competes with Yahoo, but also partners with it. “Microsoft is just more comfortable with Yahoo,” says Dreze, noting that Microsoft and Yahoo teamed up on October 12 to make their instant messaging software compatible.

Over time, Yahoo could become as big a thorn in Microsoft’s side as Google, says Wharton legal studies and business ethics professor Kevin Werbach. “Google is more threatening to Microsoft today because of the breadth of its ambition, but ultimately Yahoo represents a similar challenge in moving the center of gravity away from the desktop to the web.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.