Yahoo's to rise fame Essay Example | Topics and Well Written Essays - 500 words

Yahoo's to rise fame - Essay Example The development of other Yahoo portals outside the U.S. which replicated its business model helped the company to develop. The portals could be accessed by users in twelve different languages. They were also customized to the desire of local users. This increased Yahoo’s number of users greatly, a very important factor as it was user traffic that generated revenues (Jones, 453). The vision by Yahoo to become a global communication, media and retail company led them to go into e-commerce. This strategy was necessary so as to diversify their sources of revenue. The idea was to conduct e-commerce and take a small percentage of revenue as fees. In 1998, Yahoo store was established in line with this strategy. Heavy advertising through radio and television made Yahoo popular. These strategies worked greatly as the number of registered users rose from 26 million to 50 million by the end of 1998. Its share price also rose from $5 to $244 in early 1999 during the dot-com boom (Jones,456). A new strategy to lock in users was developed to reduce the movement of users to other portals. Yahoo allowed users to customize their pages. High degree of customization caused high switching costs and thus making it difficult for users to change. Attractive web content, which was free, also increased traffic to its portal and provided more advert revenues. However, during the dot-com bubble burst, advert revenues fell. This resulted in a fall in the stock price. Competition from new entrants such as MySpace, Monster.com and YouTube further worsened the situation. Google, a new search engine, was also becoming popular. Customized portals such as Amazon .com and social networking portals which entered the market were a further upset to Yahoo. Its content driven strategy came into question as other companies offered for free what Yahoo offered at a fee (Jones, 459). Many analysts believed that it was the over reliance on