Yahoo!


Everyone would like to be rich (I presume). Everyone would like to be sucessful (I presume again). Everyone would like to have an ingenious idea to make a lot money quickly. Those two guys at Google did it.

How things work in the physical world One month ago, an interesting article from ReadWriteWeb talked about the Google model to make money.

You will see two charts describing how it works in the “physical” world compared to the “online” world depending on the demand on the market.

ReadWriteWeb tells us that Starbucks Coffee is the equivalent of Google in the physical world. It means that they’re making good money but it’s funny when you look at the differences:

  • Starbucks spends money on expansion, but Google ads spread themselves
  • Starbucks spends a lot of money on maintenance, Google spends little
  • Starbucks spends money on marketing, but businesses flock to Google because it just works
  • Starbucks relies on people, Google relies on software

Those four points are so relevant.

I take advantages of this article to give you the financial results for the Q1 2007 of the Internet Giants:

  • Google with a net income of $1.0 billion
  • Microsoft with a et income of $3.48 billion
  • Yahoo with a et income of $142 million
  • Apple with a et income of $1.0 billion

For Apple, it’s a record when for Yahoo is a clear decrease. Is Microsoft gonna merge with Yahoo ? Steve Ballmer doesn’t rule out the idea… We will talk about it !

Stay tuned

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American Giants Google, Yahoo! and Microsoft have made China one of their priorities for growth and are considerably expanding their research and development centers in China. Thus Google has recently announced (source: IHT) its plan to hire thousands of people for its Beijing development center; Yahoo! is launching Flickr.com, its photo-sharing site, in China and Microsoft is developing its partners network. This expansion has also raised several polemics one of whom was the rumor of complicity of Yahoo! in the arrest of a journalist in China.

The Chinese Market

Almost unknown outside China, Baidu.com is very similar to Google, has almost the same simple home page and the same Business Model. Launched in 2001, Baidu went public in 2005 and was the biggest opening on Nasdaq since the dot-com peak in 2000. According to the Search Engine Market Survey 2006 from the China Internet Network Information Center (CNNIC), “Baidu’s market share is increasing constantly to 62.1%. This means more than 60% internet users are going to choose Baidu as the first option when searching online. Google’s market share in this segment is 25.3%, decreased 8 percent points when compared with the performance at same period last year.“. Thus Yahoo! and Google are challengers on this Market which is presented below (source: NYT):

Baidu

Yahoo! and Google’s Chinese Challenges

The Chinese Internet Market is very different from the Western one. Indeed in China there is a really developed entertainment culture, which appears on the Internet and which Internet companies follow. However Google and Yahoo! do not take enough this culture difference into account and therefore are loosing ground (cf. evolution of the pay-per-click market on the graphs above). However, beyond this necessary cultural adaptation, the American Giants have some advantages: a big capitalization and an important technical task force.

So, the Battle begins and is off to a good start!