STRATEGY ASSIGNMENT

SUBMITTED BY : JUHI BHATTACHARJEE

ROOL NO. : 18PGDM074
SECTION : B

Question : What did Google do to kill Yahoo?

Answer : The downfall of Yahoo took place after the company suffered two
big data breaches that shook it and has also tainted its image majorly. The
company had alienated its users and was going through losses. Yahoo was seen
as one of the pioneers of the early internet era during 1990s. There was a time
when it was the most popular website in United states but the company started
bleeding since the late 2000s. The company’s mindless decisions that it had
taken in the past can be held responsible for its ruination. Some of the major
mistakes that Yahoo had made are :
1. Refusing to buy Google for just $1 million: Yahoo failed to gauge its
biggest competitors and turned down the $1 million deal. It could have easily
turned the tables if it had agreed to buy Google. Today Google is the one of the
most valuable companies worth over $500 billion.
2. Failing to buy Facebook: Yahoo initially offered $1 billion to Facebook but
later lowered it to $850 million. This made Facebook decline the offer.
3. Hiring wrong CEOs: Yahoo has repeatedly hired wrong CEOs. None of the
CEOs at Yahoo had a "strategic vision" that could match Google.
4. Called itself a media company: Though Yahoo worked as a tech company,
it failed to acknowledge itself and stubbornly addressed itself as the media
company. It got swayed away by the profit which it earned initially through
advertisements and overlooked the tech involved in it.
5. Declining Microsoft's acquisition: This was the final nail in the coffin. In
2008, Microsoft had showed its interest to buy Yahoo for $44.6 billion. The
company refused.
Reasons of Google’s success and Yahoo’s failure :
Google and Yahoo, the two tech giants were competing vigorously to dominate
the rapidly growing territory of World Wide Web. So many factors influenced
the ultimate outcome, but one in particular was the way Google and Yahoo
differed in their approach to core infrastructure
Google’s sharp contrast with Yahoo on infrastructure offers powerful lessons
about building a sustainable business, especially in the rapidly transforming
technology landscape.
Building fast and building to last
At the beginning of the new millennium, Google and Yahoo started down very
different paths to attain the enormous scale that the growing size and demands
of the Internet economy required. For Yahoo, the solution came in the form of 
NetApp filers, which allowed the company to add server space at a dizzying
rate. Almost every service that Yahoo offered ultimately ran on NetApp’s
purpose-built storage appliances, which were quick to set up and easy to use,
giving Yahoo a fast track to meet market demand.
Google began work on engineering its own software-defined infrastructure,
ultimately known as the Google File System, which would function as a
platform that could serve a diverse range of use cases for all the services Google
would offer as part of its future ecosystem. Instead of using the latest storage
appliances as a foundation, the Google File System used commodity servers to
support a flexible and resilient architecture that could solve scalability and
resiliency issues once and for all, simplifying and accelerating the future rollout
of a wide range of web-scale applications, from maps to cloud storage.
Scaling complexity
It took four years of ongoing development, and enormous amounts of
engineering resources, before the Google File System reached the point where
the company used it for mission-critical operations. Meanwhile, Yahoo had
been able to add NetApp filers almost immediately to keep up with growing
demands for its services. In the race to dominate the Internet landscape, it
appeared Yahoo had pulled far ahead.
However, Yahoo’s rapid go-to-market approach also began to show some
cracks. As demand continued to expand and diversify, downsides to the
appliance-based infrastructure emerged in the form of redundant engineering
work, increasingly complex and inefficient environments and finally, mounting
vendor costs. When Yahoo added a new service, it needed to re-engineer the
NetApp platform for that specific use case.
As a result, identical challenges for separate services, such as Yahoo Search and
Yahoo Mail, had to be solved multiple times on different infrastructures. The
fragmented infrastructure also exposed greater resource inefficiencies, as each
use case required separate server space and compute power that could not be
shared across the platform. The cost to run NetApp appliances grew as fast as
Yahoo did, taking a significant bite out of the company’s revenue.

Completely understand the problem before even considering the solution

On the other hand, Google built its file system in anticipation of these
challenges, so that adding new use cases or fixing underlying architecture
challenges could be done efficiently. Engineers could make upgrades to the
underlying architecture once, and the solution would apply across all of
Google’s services.
Finally, the flexible platform allowed resources and compute power to be shared
across different use cases, so that when servers were not busy on searching and
instead could be used to process email.
As the cost and complexity of Yahoo’s underlying infrastructure mounted, the
company simply could not afford to match Google’s pace in developing and
deploying major new applications.
The importance of a fresh start
It is important to have an insight into what it takes to build a sustainable
business and to completely understand the problem before even considering the
solution.
Of course, there are times when the “start from scratch” approach means
sacrificing immediate growth for long-term sustainability. But quick fixes bring
greater risk in the form of growing complexity and inefficiency. Google built a
broad platform that extends across the entire web by focusing on simplicity and
flexibility, while the complexity of Yahoo’s infrastructure might have been the
reason it ended up as a small part of another business.