Yahoo 2001 Annual Report Download - page 4

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Strategy & Priorities
Our strategy is to: Build a diversified global business by focusing our efforts and leveraging our core strengths
to provide deeper, more valuable solutions for our consumers and business partners.
What this means is that our focus is shifting towards capturing more of the enormous value created from
our global user base, so that we can drive increased revenue per user for the Company over the next few years.
To achieve this, we are committed not only to growing our marketing services revenue, but also to broadening
and growing diversified revenue streams such as listings and fees and transactions. We will be much more
focused on executing on the things we do well rather than trying to be all things to all people. We will use our
core strengths to our advantage. We will extend the depth of our services to encourage our consumers to
spend more time on our network and ultimately more money. And we will focus on providing solutions that offer
additional value to our consumers and clients.
The key to any strategy lies in the strength of its execution. Before the year ended we had already demon-
strated some early momentum, and as we move into 2002 we are focused on putting even more points on the
board. What follows are the key priorities that support this business strategy and a review of some of the
progress we made in 2001:
> Build a high performance organization: It was critical to reorganize the business in order to prioritize and
focus our resources. In addition to our international and regional businesses, we established six key verti-
cal businesses — Listings; Media, Finance and Information; Commerce; Communications; Enterprise
Solutions; and Access and Distribution. These are supported by key functions such as technology, mar-
keting, sales and product development. I’m also delighted with the progress we have made in building a
stronger, more complete senior management team, by bringing in numerous seasoned executives from
broad-ranging industries with fresh ideas, new contacts and diversified experience.
> Develop deeper consumer relationships: Our goal is to convert more of our 219 million unique consumers
into active registered users (currently 86 million) and/or paying subscribers. We’ve seen strong success
with services such as Yahoo! Personals, which we launched as a paid service in October. Our base of pay-
ing subscribers grew rapidly, and we now have one of the industry’s leading personals websites based on
audience size. Additionally, we’ll continue to build deeper consumer relationships through the introduction
of bundled for-pay services and the roll out of our access and distribution services later in 2002.
> Enhance client solutions: We made excellent progress both within our advertising/marketing services sales
team and enterprise solutions business. On the advertising side, we are very proud of the accolades we
received from Advertising Age in their December 2001 issue that rated Yahoo! as the portal best serving the
advertising community. This was confirmation for us that the changes we were making in the sales organi-
zation to enhance client solutions, such as hiring strong new leadership and experienced salespeople,
implementing specialized, vertical sales teams and building relationships with agencies, were working.
We finished the year with a very pleasing 3,795 marketing services clients. While these clients span
all types and sizes, one of our major priorities is to pursue larger, multi-year strategic marketing alliances.
The initiatives we undertook in 2001 with companies such as Sony, Pepsi-Cola and Compaq illustrate the
enormous potential to create brand building and awareness, research and direct marketing programs that
span multiple areas of the Yahoo! network.
In our Enterprise Solutions business we developed a new sales and project management infrastruture
to better manage client relationships. We also launched a strategy services department to develop portal
and broadcast solutions in partnership with our clients and ensure we are more focused on meeting spe-
cific company, departmental or communications needs. We have developed strong relationships with com-
panies such as CIGNA Corp., Honeywell and Cisco Systems, who are using our enterprise solutions for a
variety of needs, including aggregating important corporate and human resources information, marketing,
employee communications and online training.
> Bundle products and services: Bundling is, in effect, reaching across the Yahoo! network and pulling togeth-
er products and services that we can sell in a package, in order to increase sales and grow usage across
the network. It’s also a great way for Yahoo! to provide increased value to our paying customers, both
businesses and consumers. In 2001, we started to provide bundled portal and broadcast services to our
Enterprise Solutions customers. Yahoo! plans to roll out packages for consumers and small businesses
during 2002, some of which will be bundled with our access and distribution offerings.
> Move from agent to principal: Yahoo! has primarily been an aggregator of content, but moving forward we
will look to be a principal or owner in certain areas, where it makes financial and strategic sense and the
return is greater than sharing the customer or user with a partner. As part of our goal to become a princi-
pal in the careers space, we successfully launched a bid for HotJobs in December 2001 (which closed on
February 12, 2002). By owning our own channel in the online segment of the recruitment marketplace,
Yahoo! will obtain additional revenues through listing and subscription fees from recruiters and employers.
In some cases we may build our own offering rather than acquire, which is the approach we took with
Yahoo! Personals.
> Selectively pursue acquisitions and partnerships: In addition to launching our acquisition of HotJobs in 2001,
Yahoo! acquired Launch Media, Inc., in order to create a competitive online music service, building off the
world’s largest collection of on-demand music videos, exclusive artist features and music news.
The biggest news in 2001 in terms of partnerships was our relationship with SBC to jointly deliver high-
speed Internet access in SBC’s 13-state region and provide dial-up service nationwide in the U.S. The rela-
tionship draws upon each other’s strengths in order to meet common business objectives. We will continue to
pursue more access partnerships both in the U.S. and international markets, as well as partnerships for other
areas of our business where it doesn’t make strategic or financial sense for Yahoo! to own certain assets.
Yahoo! Around the World
During the past year Yahoo! has worked diligently to maintain and grow our leadership position around the
world and we continue to reach the world’s largest global audience. Our presence in 24 world properties and