Antitrust Group: Business Plan and WebsiteYohoo! Joint Internet Advertising

Justin ChiumentiAmanda Mirabito Alex Stockdale

Hypothetical: “Coopetition”

• Yohoo! has 15% of search engine traffic. Biggest competitor, Likeus has 10%.• At a meeting, the CEOs agree to:• Provide links to each others websites.• Give reduced rates to advertisers who place ads on

both search engines.

Hypothetical: “Coopetition”

• Soon, 10 search engines agree to this deal, making up 70% of search engine traffic.• Business plan is from Yohoo’s perspective, trying to

attract further search engines to the deal (“Yohoo! Joint Internet Advertising”)• We used actual Yahoo! financial results for Yohoo! where

available, made up everything else

Business Plan: Mission Statement• “To organize and present the worlds data to our users --

how they want it, when they want it”• Yohoo makes money by displaying ads across properties:

Yohoo! Mail, Yohoo! Messenger, Yohoo! Groups, Yohoo! Answers…• 4th most visited website on internet

Business Opportunity• Why log into 10 different platforms to bid on search

keywords?• Centralized account to bid on keywords across all partner

websites• Save time for employees• Reduce headcount in your internet

advertising department – save money

Benefits of Joining

Customer/Partner Pain Points Benefits

Search Engine: Difficultly writing advertising algorithms Fully outsourced to Yohoo! platform

Search Engine: Bad ROI for advertiser search terms

Yohoo! leading-class algorithms increase ROI and profitability

Visitors: no useful paid search ads on results pages

Yohoo! optionally collects data points from search engine partners to increase relevance of matches

Benefits to all parties

Major Industry Players

• Mid-single digit profit margin in general• We estimate we can raise this 30-50%, and get

Webwiggler in the black• Market share may increase at expense of

companies that don’t sign up – visitors like relevant ads

Yohoo! LikeUs Altervisitor Webwiggler

Sales (m) 5,034 4,223 3,005 2,440

Net Profit (Loss) (m) 800 560 400 (100)

Employees 11,500 9,000 5,000 6,400

Market Share 15% 10% 7% 5%

Business Opportunity• Economies of scale – by using a single system, we can offer

reduced rates on all websites• We already have 70% of search traffic represented – NOT

partnering with us is getting expensive

Financial Projections• Yohoo! And Likeus are the first two to agree• As more sites sign on, market share accelerates• So does gross margin – economies of scale

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Financial Projections• Expect Yohoo! to be break-even on platform in 2 years• Most major costs are upfront – programming• Variable costs are scalable – more advertisers, more servers• More sites add more market share, more revenue as costs

drop• Expect to find additional synergies into the future

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Break Even Analysis

Revenues (m)

Costs (m)

Financial Projection

• Actual data from a marketing agency• Display and paid search ads are the two fastest growing –

20% and 14% in 2014• Classified internet ads stagnating• Paid search about half of all internet advertising

Website• http://www.yohoonet.com

Website• We used webs.com to build it• Built in templates, drag-and-drop modules

Website• Drag and drop components: audio

Website• Drag and drop: maps• Useful for contact info

Website• Pre-functioning contact form

Business Plan / Website• Questions?