Caso Harvard Yahoo

Harvard Business School

9-700-013
Rev. January 6, 2000

Yahoo!: Business on Internet Time
The word “portal”…is now the second-most-meaningless word in Netspeak. (The
most meaningless word is “strategy,” which appears to mean something along the lines of
1
“blind, headlong, mindless pursuit of the latest analyst-endorsed Internet fad.”)
Tim Koogle, CEO of Yahoo!, leaned back in hisbright yellow chair. Huddled around the
purple table with him were Jerry Yang, co-founder of the company and Chief Yahoo, and President
Jeff Mallett. The trio debated the recent flurry of competitive moves and puzzled over their options.
Several days earlier, on January 19, 1999, @Home had announced its plan to acquire Excite,
Yahoo!’s arch rival. Like Yahoo!, Excite sought to provide consumers apoint of entry into the World
Wide Web. @Home offered high-speed access to the Internet via networks owned by cable television
companies. The Excite / @Home deal came only two months after America Online, the online service
provider with the largest number of subscribers, acquired Netscape.
Netscape not only
manufactured the browser software that many people used to navigate the web, but itsNetcenter
web site was one of the most popular portals on the web. Months earlier, Disney had taken a large
stake in the portal Infoseek, and NBC had allied with Snap. Rumors swirled that Lycos, a portal with
an array of online “channels,” was also in the midst of merger talks.
Koogle, Yang, and Mallett had grown used to rapid change and adjustment in their three
years together at Yahoo!.Even by Internet standards, however, January of 1999 was an unusually
hectic month. Soon, Yahoo! might be the only portal without a major partner. Independence and a
simple vision had served Yahoo! well so far. The company aimed to be “the one place in the world
2
that anyone would need to go to find anything, locate anybody, or buy anything.” Through its web
pages, Yahoo! sought to tailor thevast information available on the Internet to suit individual web
users. It then “delivered” those users to companies that hoped to sell products to the users.
Payments from the companies, not from the individual users, made up Yahoo!’s revenue. Though its
service had evolved over the years (Exhibit 1), its basic approach had remained the same.
Investors had bet heavily that Yahoo! would makethis approach profitable. The company’s
market value stood at $30 billion, up 2,600% since its IPO in April, 1996. Yahoo! booked revenue of
$203 million in 1998, and analysts projected growth to as much as $362 million in 1999 (Exhibits 2
and 3). While most of its direct rivals were losing money, Yahoo! had recorded over a year and a half
of increasing profits.
Jay Girotto, MBA 1999, andProfessor Jan W. Rivkin prepared this case as the basis for class discussion rather than to
illustrate either effective or ineffective handling of an administrative situation.
Copyright © 1999 by the President and Fellows of Harvard College. To order copies or request permission to
reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go tohttp://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system,
used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying,
recording, or otherwise—without the permission of Harvard Business School.
1
This document is authorized for use only in Proceso y Teor?a Administrativa (Iouri Gorbanev) 2013 by Ana
CarmenzaNeira from January 2013 to July 2013.

700-013

Yahoo!: Business on Internet Time

Koogle and his team now debated whether, and how, the company should adjust its
approach in light of recent events. Publicly, the team had been silent on its options. Rumors
circulated, however, that major media companies, telecom providers, banks, online retailers, and
other portals were interested in...