Wendy Yu discussed Yahoo!‘s decision to exit from the Japanese market in a recent blog post. Wendy identified Google‘s market dominance as the main reason for Yahoo!’s exit. Here is how Google was able to edge out its major competitors in the search engine market:

source: http://www.netmarketshare.com/search-engine-market-share.aspx?qprid=4&qpcustomd=0

In its initial stages, Google focussed its operations on developing the best search engine. It was able to do so, and over time, Google became the synonym for “search” and developed a large loyal user base around the world. As a result, everything Google offered became what each and every one of us expects from any search engine, and if the competitor fails to meet these expectations, they will lose their place in the consumer’s mind.  Google’s rapid improvements made it extremely difficult for competitors to be on par with its service, not mention outcompete what Google offers. Once Google was able to set up these barriers within the industry, it eventually expanded its brand to provide a variety of services common to its competitors, making it a one-stop channel for internet users to get access to everything the “cloud” has to offer. Thus, Google was able to dominate the internet market. Yahoo! on the other hand, does not dedicate the majority of its resources toward a particular service, therefore, it does not have a unique brand association to stand out from its competitors.

Wendy’s Blogpost: https://blogs.ubc.ca/wendyyu/2011/10/10/15/