Yahoo is definitely facing difficult challenges in the near future. Consumption is probably going down, but that is not something that will only affect Yahoo! The competition will also be seriously shaken. Another aspect that the firm's managers should consider is the more personalized approach proposed by Google. The G-mail service will be tailored to fit the desires of each and every user. The needs of each person, as manifested in the search conducted with Google's search engine, shall be reflected in the way the email account of that particular person is handled.

For instance, should someone be interested in marketing techniques, Google will put on the email box web site of that individual a few links related to that subject. Critics say that this is an unforgivable intrusion in people's privacy, since these data may be used to make up psychological profiles of each and every person using Google, which would indeed be a major problem.

However, the idea of personalizing email boxes isn't a bad idea in itself. I'm sure that many people, including myself, will be curious to find out how this new service would improve their lives. Therefore, Yahoo! should think about including a similar service if it doesn't want to lose customers. Actually, the first thing they could do is increase the dimension of the email box from the present 100MB to 2 GB, as Google offers, or more.

As for Yahoo's ability to deal with these challenges, the company's managers are more than experienced, the people working there are mostly young and they will probably adapt with ease. However, the sheer size of the organization could pose serious problems. After all, Yahoo! isn't a small private company anymore. Underestimating such difficulties would be a very serious mistake.

The general economic environment is not very safe and serious risks are involved. Actually, investing in any consumption-oriented enterprise is quite risky during this period. Oil prices, the result of November elections and the situation in Iraq are factors that, no matter how unlikely, will affect the evolution of all major companies around the world including Yahoo! And its competitors
However, notwithstanding these macroeconomic factors, I would certainly suggest investing in Yahoo!. The company has proved lately that it can take all the pressure to which it might be subjected by the market and by the competition. Its management team is certainly very competent and I believe that these people, who have managed to get Yahoo! out of the crisis it faced in 1999-2000 are able to continue the process and bring further success to the firm. Should anyone be confident about macroeconomic evolution, an investment in Yahoo is highly recommended, and that also goes to for eventual employees or business partners.

Bibliography

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Ellen M. Heffes.

Financial Executive. Morristown:

May 2004.Vol.20, Iss. 3; pg. 32

2. Yahoo profit rise signals good news for Google

Bill Condie.

Knight Ridder Tribune Business News. Washington:

Oct 13, 2004. pg. 1

3. Yahoo! And MSN plan for pan-European ads growth

New Media Age. London:

Sep 16, 2004. pg. P.5

4. Yahoo's not just for consumers anymore

Elisabeth Goodridge.

InformationWeek. Manhasset:

Mar 18, 2002., Iss.…