Yahoo! Inc.
Internet users around the world are cheering for this company. Yahoo! is the leading online information portal, drawing more than 400 million people to its network of Web sites with a mix of news, entertainment, and online shopping, as well as its search engine and Internet directory. The company also offers registered users personalized Web pages, e-mail, and message boards. Yahoo! publishes content in more than 20 languages. It generates most of its revenue through advertising sales, but it also charges subscriptions for premium services. In addition, Yahoo! provides online marketing and other commercial services and it offers Internet access through partnerships with telecommunications companies.
A pioneer in Internet search and navigation, the company's ever-growing collection of content and services has made it one of the best-known online brands and one of the most popular Internet destinations; however, it is facing increasing competition as the Internet has increasingly become a major channel for people to communicate and receive news, information, and entertainment. Google is capitalizing on its position as the most popular search engine to rapidly expand its range of content and services, while Microsoft's MSN portal has launched its own search engine technology and search-targeted ad capabilities.
In response to the increased competition, in 2006 Yahoo! launched a redesigned home page with a simpler, cleaner layout, similar to those of Google and MSN. In addition it launched a new search marketing system. The new search system includes a new ranking model and personalization services designed to provide Yahoo! users with more relevant search results and Yahoo! advertisers with more valuable customer leads.
Also that year the company launched a new business unit called Marketplace, which regroups existing Yahoo! activities in areas such as online shopping, real estate, travel, autos, and personals. Marketplace joins the company's other categories of online offerings, which include Search; Information and Entertainment; Communications, Communities and Front Doors (e-mail, instant messenger, message boards, and photo management); and Connected Life (mobile, co-branded broadband, digital home and PC desktop services). The company's branded Internet access is offered in the US in partnership with AT&T and Verizon; it works with BT Group in the UK and Rogers Communications in Canada.
These changes were followed by a restructuring of the company's business operations and key management roles at the end of 2006. Yahoo! reorganized itself into three operating units, focused on Audience; Advertisers and Publishers; and Technology, respectively. Daniel Rosensweig, COO since 2003, and Lloyd Braun, the former ABC executive who ran Yahoo's media group, left the company at this time.
Yahoo!'s international business, which accounts for almost a third of its revenue, includes European comparison shopping service Kelkoo, as well asYahoo! Europe. In 2006 Yahoo! formed a strategic partnership with Seven Network Limited, an Australian media company, to form Yahoo! 7, the result of a combination of Yahoo! Australia, and Seven's online, TV, and magazine operations. Also in 2006 Yahoo! combined its Spanish-language US Web site with Telemundo's site in order to target the growing Hispanic audience on the Web.
Founders and "chief Yahoo!s" David Filo and Jerry Yang own 6% and 4%, respectively, of the company.
Google Inc.
If you've never Googled, you probably aren't finding what you want online. Google operates the leading Internet search engine, offering targeted search results from more than 8 billion Web pages. The site, which ranks results based on a proprietary algorithm, offers search results in more than 35 languages and attracts an audience of more than 380 million people worldwide. The company generates revenue through ads that are targeted by keywords. Google also sells ads across a network of more than 200,000 affiliated Web sites. Founders Sergey Brin and Larry Page each have nearly 30% voting control of the company.
While Google's core business includes search engine services and advertising, the company also provides Web portal services such as Webmail, blogging, photo sharing, and instant messaging. Other tools Google offers to help its users make the most of their digital life include comparison shopping services (Froogle), an online image library (Google Images), general news stories (Google News), financial news (Google Finance), interactive maps (Google Maps), and Internet discussion groups (Google Groups).
The heart of Google's business, however, is its advertising system, comprised of its AdWords and AdSense products. Customers of Google AdWords consist of advertisers who seek to drive qualified traffic from Google to their sites and generate leads. Advertisers bid on keywords and have their ads appear as links on right hand column of Google's search results page under the sponsored links heading. Google powers the search capabilities of other publishers' Web sites and search engines through its AdSense for Search product.
With Google's Ad Sense for Content, Google automatically delivers ads to a publisher's Web site that are precisely targeted to the content on the publisher's site, and the publisher shares in the revenue generated when readers click on the ads. Customers of Google AdSense include publishers of third-party Web sites that comprise the Google AdSense Network. The AdSense Network includes many small Web sites but has also attracted several big players in online publishing and e-commerce, including AOL, IAC Search & Media (Ask.com), and NYTimes.com.
In 2007 Google made changes to the look of its search results page, which it now calls "universal search". The change reflects results that are made up of images, video clips, book information, news headlines, and local business data.
The company opened up its well-stuffed wallet with the purchase of YouTube for more than $1.6 billion in order to complement its online video offering (Google Video). In addition, Google has announced plans to acquire digital ad firm DoubleClick for $3.1 billion. The deal will solidify Google's dominance in the online ad industry.
In addition to these deals, in 2006 the company made high-profile agreements with News Corp.'s Fox Interactive Media (FIM) and Viacom's MTV Networks. FIM selected Google as the $900 million high bidder for providing search on MySpace.com and other Fox properties in a multiyear search agreement, and Google will distribute MTV video (shows such as Laguna Beach and Sponge Bob Square Pants) to a variety of sites. Google separately announced agreements with Warner Music Group and Sony BMG to make music videos and other content available for free through its video service and on partner sites.
With rivals (and former technology licensees) Yahoo! and MSN launching their own search engines and targeted advertising systems, Google is locked in a race to develop new search tools to attract users and to expand its advertising networks. In 2005 it agreed to invest $1 billion for a 5% stake in AOL, gaining ad distribution throughout the content portal's network of sites. Under the deal, AOL continues to use Google's search technology and the two companies work together to make their instant messaging software compatible with one another. AOL also gets about $300 million in promotional advertising for its online properties through Google's AdSense Network.
Google is facing its international rivals head on. The company is focusing on China, where Baidu.com is the market leader. Google has announced a Chinese-language brand name and is expanding a Beijing research center to develop new products.
Google takes its name from "googol," the mathematical term for the value represented by a one followed by 100 zeros. (In keeping with that theme, the company's headquarters is referred to as "the Googleplex," a play on googolplex - a one followed by a googol zeros.)
Chairman and CEO Eric Schmidt has about 10% voting control through his 5% equity stake.
Rianala Randrianarison