America's No. 1 financial conglomerate

Chapter 299 Individual Decisions

When Google Mail arrived with its formidable capabilities, causing a huge upheaval in the email market, Yahoo was undoubtedly the one that suffered the most damage.

Unlike Microsoft, which is a large and diversified company, email is just a small branch of its vast business empire. Even if it is affected by some setbacks, it can still withstand them steadily thanks to its other businesses.

Yahoo is different. Yahoo has invested a lot of resources in its email business. If Yahoo Mail fails, it will have a huge impact on Yahoo's stock price.

Now that Google is coming on strong, Yahoo has been forced into a dilemma. Moving forward might lead to its own destruction, while retreating might cause it to fall off a cliff.

The atmosphere in the conference room at Yahoo's headquarters in California was so heavy it was almost palpable. Everyone's usual relaxed demeanor was gone; some had furrowed brows, while others remained silent with their heads bowed, and even their breathing was unconsciously much lighter.

CFO Jimmy broke the silence first, his face as somber as the sky before a storm: "I said it before, Yahoo's hasty entry into the email industry was a huge mistake."

"Google has long dominated half of the email market, and now Microsoft has jumped in. This industry is rife with brutal competition. What are we, Yahoo? Compared to these two giants, Google and Microsoft, we're just a small zebra at best. Our meager capital isn't even enough to fill their teeth, so how could we possibly be qualified to get involved in this war?"

At the height of his emotion, Jimmy slammed his hand on the table, his face full of mockery for the others who hadn't heeded his advice. "Look at us now! As soon as Nasdaq opened, our stock price started to plummet. And what are we doing? We can't even come up with a solution. Moving forward is certain death, retreating is also certain death—a complete dead end."

The market's optimism towards Gmail is almost unanimous.

Although Google is not yet publicly listed and its stock price doesn't directly reflect its popularity, industry analyst reports,

The confidence that Google Mail has in a unified market is evident in the discussions among investors.

In contrast, both Microsoft and Yahoo saw their stock prices decline to varying degrees today.

However, Microsoft's situation is still acceptable. After all, email is not its core business, and this decline is within its tolerance range. It's like being bitten by a mosquito; it hurts, but it won't cause serious damage.

Yahoo, however, presented a completely different picture. Its stock price plummeted by 4.77% at the opening bell, and the decline continued to widen. The downward-sloping red line on the chart must have chilled the hearts of Yahoo's management.

What's worse is that Yahoo has now put itself in a very precarious position and is somewhat at a loss as to how to deal with it.

If Yahoo Mail continues to develop its email business, it will have to keep investing money. However, facing strong competition from Google and Microsoft, Yahoo Mail has no chance of winning and will only face a slow death.

However, if Yahoo were to stop its email service now, it would be tantamount to admitting defeat to the market. The stock price would certainly plummet even further, and it could even trigger a chain reaction, plunging Yahoo into an even greater crisis.

Although Google, Microsoft, and Yahoo have all invested heavily in the email field and are fiercely competing with each other, there is one thing that all three parties are willing to see: an increase in the market value of their companies.

On the surface, this email competition appears to be a three-way battle for users, but in reality, they are vying for users of other email providers besides these three.

There are also many small email companies in the market, which hold a portion of user resources, making them highly sought-after by all three parties.

As early as before the Lunar New Year, some media outlets published articles stating that the era of fragmented competition in the email market had come to an end.

In the first half of 1997, the email business in the United States was quite lively, with more than 30 email companies of all sizes.

But by the end of the year, that number had plummeted to less than seven.

Apart from Google, Microsoft, and Yahoo, other email companies have either been eliminated from the market due to insufficient funds and outdated technology, or have been acquired, leaving them in a precarious situation.

It was precisely in this three-way battle for supremacy, with Yahoo's email user base growing significantly and attracting many new users that its market value soared.

But the situation is different now. Gmail's powerful update has directly disrupted this balance.

If Yahoo continues to invest in its email business, it will definitely be a losing proposition. Google Mail has already shown its dominance in the market, while Microsoft, with its deep pockets, can only put up a fight.

But what about Yahoo?

It couldn't compete with the other two companies in terms of either funding or technology, and nobody believed it could win this competition.

However, if Yahoo were to shut down or sell its email business, it would be tantamount to publicly admitting its failure, a drop in market value would be inevitable, and internal turmoil might occur within the company.

The meeting room fell silent again, the air seemed to freeze, and then it turned into a heated debate between the two factions.

Those who initially supported launching the email service felt they should go all in, continue to increase investment, and fight Google and Microsoft to the bitter end.

Jimmy couldn't hold back any longer. His eyes widened, and his tone was full of sarcasm. "You want Yahoo to develop office software and increase investment to compete with Google and Microsoft? I think you have ulterior motives. This is practically digging up Yahoo's ancestral graves."

"Do you know how much it costs to develop office software? With Microsoft and Google already having a first-mover advantage, how much more money do we need to spend to seize market share? Our current financial situation simply cannot support such a large investment. In that case, not only will the email business be ruined, but the entire company will be dragged down."

The other party was not convinced and retorted with a flushed face, "I admit that we really have little chance of winning against Google and Microsoft in the email business, but I don't think Yahoo Mail is a failure."

It still has a certain user base; if we find the right approach, we might be able to revitalize it.

Just as the two were arguing, Yang Zhiyuan, who had been silent all along, finally raised his head.

As the founder of Yahoo, he looked exhausted, but his eyes remained sharp.

He glanced at the executive who had proposed increasing investment and slowly began, "Alan, tell me your specific ideas."

Alan didn't rush to speak. Instead, he picked up the notebook in front of him, tore off the top page, folded the paper a few times, and gently tossed it towards Yang Zhiyuan.

The crumpled paper flew through the air in an arc and landed precisely in front of Yang Zhiyuan. Yang Zhiyuan reached out, picked up the paper, unfolded it, and saw several strings of numbers written on it.

He frowned, somewhat puzzled, and asked, "What does that mean?"

Alan explained earnestly, "The first number is 3500 million. That's the number of Gmail users right now, and it's still growing."

"The second number is 980 million, which is the number of Hotmail users. Although it is less than Google's, the user stickiness is quite good."

"And the third number, 583 million, is the number of our Yahoo Mail users."

Before Jerry Yang could ask further questions, Alan said, "But how many internet users are there in the world? I'm sure that number is definitely over two hundred million."

According to the latest institutional survey, data from the Federal Reserve Bank of St. Louis shows that the number of internet users worldwide accounts for 3.14% of the total population, which is approximately 1.86 million people out of a global population of about 59 billion.

Data from Purdue University's Department of Computer Science indicates that the number of internet users worldwide should be 1 million.

Data from InternetLiveStats, a real-time internet statistics website, shows that the number of internet users worldwide has exceeded 1.885 million, the highest among all forecasting agencies.

But for these internet professionals, the number of internet users worldwide is certainly more than that, and may have already exceeded 200 million.

"The Internet is still developing rapidly, and the number of Internet users worldwide is growing rapidly every day. The three of us have been competing fiercely in the email business recently, with each of us investing a lot of money, but everyone has overlooked a key issue."

Seeing that he had attracted everyone's attention, Alan revealed a smug look. "That's the scope of this email war, which has always been limited to the battlefield on the American mainland."

"You mean we can turn our attention to overseas markets?" Even Jimmy, who had always opposed increasing investment, realized what was going on and his tone softened considerably.

Alan nodded emphatically. "That's right. Microsoft will definitely not give up easily. In the North American market, they will continue to fight with Gmail until they can no longer hold on."

"Since Google and Microsoft are focusing all their attention on North America, why don't we change our approach and invest our funds in overseas markets? Once the fighting in North America subsides a little, or even before it does, they might expand their battlefield overseas."

"As long as Yahoo Mail can establish a foothold in overseas markets, we will be able to take control whether we continue to develop or sell the business to Google or Microsoft. Most importantly, this way, Yahoo's email business will not end up losing money, and we can give our shareholders an explanation."

Alan's words were like a ray of light, illuminating the somber atmosphere in the meeting room.

Many executives were immediately impressed and nodded in approval.

Someone excitedly said, "This is a great idea! On the one hand, we can temporarily avoid the onslaught of Google and Microsoft in North America and let them fight to the death. We can sit back and watch them fight, without worrying about the third one suffering when the top two fight."

"On the other hand, in terms of technology development, we don't need to be like Google and Microsoft, which have to delve into office software. We can just focus our energy on opening up overseas markets and attracting users."

Another person added, "Google and Microsoft are currently focused on the European and American markets, but there are still many potential users in Asia, Africa, and Latin America that have not been developed. These are our opportunities."

As long as Yahoo can acquire a large number of users, features and auxiliary software will not be that important.

Anyway, they'll most likely sell the email business eventually. What they're buying is the number of users; they already have the software and everything else.

Yang Zhiyuan glanced at Jimmy beside him and saw that although Jimmy didn't say anything, he didn't seem to object either, so he prepared to nod in agreement with Alan's suggestion.

Then he thought of Ernst, of PayPal, and of PayPal's practice of exchanging money for users.

He couldn't help but ask, "Do you think we could learn from PayPay's model and use subsidies to acquire users?"

Everyone's eyes lit up, and they looked at each other, their faces filled with excitement.

Yes, Yahoo's current goal is to accumulate users, since it will most likely sell the business in the end anyway, so daily active users are not that important.

In that case, instead of spending money on playing GG, it would be better to directly subsidize users and encourage them to register for Yahoo Mail.

Not only is playing games with GG expensive, but the results are also not guaranteed. You might spend a lot of money but still not attract many users.

However, if you directly subsidize users, such as giving them cash bonuses or coupons upon registration, users will definitely be willing to register. This way, you can accumulate a large number of users in a short period of time, and then sell them at a good price.

This means that Yahoo Mail is no longer doing email business, but has become a ground sales business.

I will pay a certain amount to purchase each user, and then sell Yahoo's email business based on that same price per user.

Yahoo has found a new approach, while Bill Gates at Microsoft isn't as worried.

"How's the integration going? Is it all done?"

The technical lead nodded hurriedly, "The integration is complete, but it hasn't undergone full testing yet. Are we really going to release it now? If any problems arise and affect the user experience, our losses will be huge."

Bill Gates sighed helplessly, a bitter smile on his face. "I originally wanted to wait until it was more perfect before giving that Ernst guy a big gift, but now the situation is different. Google has already shown its hand. If we wait any longer, we will only be able to passively take a beating. Time does not allow us to hesitate any longer."

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