Management and the Technology Professional – B302

Case study answer 3

As the Yahoo software engineer I have used a decision tree and net present value to decide on whether to advertise a small business on the yahoo website, below are the available options which incorporate the costs as should Yahoo be purchased by Microsoft this will incur an extra £20,000 costs.

• Microsoft acquire yahoo and project goes ahead successfully
• Yahoo stay independent and the project goes ahead successfully
• The project goes ahead and fails.
• Microsoft acquire Yahoo but the project fails
• Yahoo stay independent and the project gets cancelled.

This decision has been made in light of the proposed merge/buyout of Yahoo by Microsoft to carry out this advertising campaign. It is also believed that this acquisition of Yahoo by Microsoft will go through as planned as it is anticipated that approval will be given from the Competition Commission.
So it has been decided that we will take the decision tree route off Microsoft to acquire Yahoo and for the project to be successful. This means that the initial costs of the project are 25,000 and it will also cost 20,000 for administration costs but the benefit will be 90,000. This means that using a competitive market rate of 6% the Net Present Value can be calculated and from this, it appears the benefits far outweigh the risks as the value is over 66,000.