Yahoo Despite its many challenges, Yahoo remains a profitable company, and one of the market leaders in its field. This means that the company must be doing something right. Taken in isolation, Yahoo continues to have strong revenues and profits. The company has made money for several years in a row. Furthermore, Yahoo has been able to adjust to its shrinking business. This shows strong management, in that even when revenues are declining, the company is still able to maintain profitability. The ability to adjust the business and continue to be profitable, even when there are numerous challenges in the external environment, is something that will hold Yahoo in good stead going forward.

It is important to also keep in perspective that Yahoo has a strong brand, and has always maintained a high level of traffic. Having a base of loyal customers, and a widely recognized brand to help drive traffic, are two critical success factors for any company, and Yahoo still has these.

Perhaps the biggest weakness for Yahoo is that its...

What this means, in essence, is that Yahoo does not have a source of competitive advantage. Competitors like Google, Microsoft and Facebook are all good at the same things that Yahoo is good at, and in many cases they are better. That Yahoo does not have any one element in which it is better than the competition is a major weakness that cannot be understated.
Further, Yahoo has a declining market share. This has resulted in four rounds of layoffs in the past six years. These layoffs have occurred because Yahoo has sought to maintain profitability despite the challenging environment. While its ability to remain profitable is laudable, the layoffs have made it more difficult for Yahoo to attract employees to the company. If it cannot attract the best people, Yahoo will continue to find itself at a competitive disadvantage in terms of technology, which is a key driver of the online advertising business. Without this technology, or the people needed to develop it, Yahoo is basically in a position where…