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Internet Retailing and Services: Who’s Big? Who’s Great?

Posted September 20th, 2010 by Andrew Goodman

In the midst of the onslaught of breathless news coverage of the tech sector, with new devices, features, squabbles, and posturing being the order of the day/hour/minute, it’s sometimes helpful to step back and be reminded of who the actual players are, economically.

One (albeit imperfect) way of doing that is to look at where companies rank in the Fortune 500, and in their respective designated categories within the Fortune 500.

So who ranks up there in this subcategory, Internet Retailing and Services? Google, of course, takes #1 spot, but it still sits only around 100 in the Fortune 500 as a whole. What, did I say #1? No. Google is #2! Amazon is #1, owing more to its low profit margins than its superiority to Google as a company. That Zappos acquisition can’t have hurt.

Liberty Media, a holding company that counts Expedia and shopping networks among its holdings, is #3. Ebay is #4.

All by way of pointing out that Yahoo, longtime doormat of the tech media (including, at times, yours truly), rounds out the list at #5. Yahoo has stayed strong within the Fortune 500, currently at 343. In fact, it’s higher on the list now than it has been throughout most of its history. Yahoo, despite paling by comparison with Google, has grown over the years. And it’s only 240 spots back of Google on the big list.

Yahoo, it seems, has remained relatively immune to screwups by top management, wasteful practices, botched acquisitions and failed experiments. It can get away with this because, like many companies that get on the right side of scalable business models in software, media, and digital service delivery, they have pockets of shockingly high profit margins and scale. They also continue to have a recognized and generally benign brand.

Far from being out for the count, Yahoo may indeed be poised to resume its growth into one of the most successful companies in history – period. It will never be Google, but it can be something in its own right.

I’ll explore more in an in-depth feature (forthcoming).

P.S. In the “Computer Software” category, Microsoft still dwarfs all contenders. There is, of course, significant overlap in Microsoft’s digital lines of business, but by strict categorization it’s not in the “Internet Retailing and Services” Mix. Nor are the Apples and other device makers of the world, though they undoubtedly factor heavily into the competition.

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2 Responses to “Internet Retailing and Services: Who’s Big? Who’s Great?”

  1. rich johnson says:

    yahoo will never be google BUT yahoo with Bing could be. Bing ie MSN could had the #1 spot in the search engine world but blew it in my opion.

  2. Ah, but as I’ll try to point out in my upcoming feature, that misses the point. Yes, for Yahoo in particular, search is lost. They may be sticking around as #2 or #3, but there is little hope there.

    But that isn’t the kind of company they aim to be. They’re a broad-based content and connection company of some kind. That may sound pretty lame, but the opportunity beyond search is large. They do well in general… despite a lack of focus… and winning the search race is simply not their primary quest.

    Trying to be Google is a misguided strategy for any company.

    Unfortunately, if Yahoo had done a better job of being Yahoo, they might have had the resources to be the kingpin that acquired YouTube… instead of, say, Broadcast.com, Geocities, eGroups…


 


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