Comparison of Two Different Business Models: Yahoo and Google

John Smulo in his work Search Engine Marketing (2016) stated that in recent years, Google and Yahoo have played a central role in the digital world. Not only are they the top, most used search engines, with the highest market penetration rate, but they also play a major role in the software industry. Arguably we can say that Google has a strong brand name, but Yahoo is not far behind. In some ways, Yahoo wins over Google. The rivalry between these two search engines continued to evolve at a rapid pace. Users always prefer one search engine to another, but what makes it better or worse is often not understood or taken into account by them.

The design of a business is the means for delivering value to customers and earning a profit from that activity, both Google and Yahoo have different way of delivering value to their customers. To illustrate this difference we use the elements of a business model as shown below:

• Customer Selection
• Value Proposition
• Differentiation and Control
• Scope of Product and Activities
• Organization Design
• Value capture for Profit
• Value for talent.

Using elements adopted from Nelson et al we can compare the Business model of these two search engines.

Customer Selection: in terms of customer selection, Google and Yahoo both target online users interested in portal services. Yahoo started as a manual search engine on the Internet and has become one of the most powerful Internet destination portals. Originally, Google was primarily a search engine and continued to add new features and software to force end users to think more about Google. Google continues to view search as the primary engine for customer selection. Yahoo considers the Internet portal and related services as the key customer selector.

Value Proposition: in terms of value proposition Google provides superior search results. Yahoo provides a broad set of content from their portal. Ø Differentiation and Control: In terms of Differentiation and Control, Google aim is organize the world’s information. To date, Google has not aggressively invested in creating new content. For its part, Yahoo has invested in the creation of new content (local search journals and content).

Scope of Product and Activities: In terms of products and activities, they both play in the majority of the same areas: search, search advertising, instant messaging, email, Internet portals, and mobile app investments.

Organization Design: In terms of organization design, Google is proud of its relatively flat organizational structure, focused on small high-performance teams to focus on new and innovative market opportunities. Yahoo has evolved into a traditional hierarchical organizational structure, with initial financial pressure forcing Yahoo to reorganize.

Value capture for Profit: in terms of Value capture for Profit Google generates the majority of their revenue from search advertising. Google continues to invest in a large number of areas to find the next revenue stream. Yahoo's revenues come from a broader set of services, but branded advertising and sponsored research continue to account for the majority of revenues and profits. Yahoo is investing in destination content to help grow brand advertising revenue. Yahoo continues to invest in service areas such as Yahoo Personals that help Yahoo increase revenue.

Value for talent: in terms of value for talent they both have hired the best engineers and are regarded as a strong engineering culture, looking for the next revenue generator.

These companies have different business models. However, this does not mean that one is better than the other. Today, most young people prefer Google, but people over 45 still seem to stick to Yahoo. Everyone must choose according to the search engine that suits them best.