January 28, 2008 4:00 AM PST

At Yahoo, a need to hit refresh

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That compartmentalization causes Yahoo particular grief because tech innovation demands speed and teamwork.

Most of Yahoo's products and divisions are dependent on one another in some way, and any new product requires cooperation from multiple groups. Everyone from those various groups must be willing to say "yes" for something to happen. When compared with innovative upstarts, that innovation by consensus is a time waster, and sometimes an idea killer.

"Instead of looking for reasons to say 'yes,' team leaders look for reasons for 'no' if they can't control it," said one source inside the company.

"If you're going to keep an organization young, you must continue to work on getting everyone on the same page with knowledge flowing up and down and across."
--Raymond Miles, professor emeritus, UC Berkeley Haas School of Business

In November, Yang and Decker announced a plan to address these troubles. It started with a company-wide effort called "One Yahoo" to establish new behaviors toward teamwork and de-compartmentalize the company, according to sources. The idea was to emphasize that the needs of the corporation come before needs of individual business units.

Yang and Decker talked to executive vice presidents, who were told to talk to their next in command. Still, that effort has yet to lead to tangible results, according to people familiar with the company.

Sources interviewed by News.com also said that key managers, including Yang and Decker, want cultural change, but the commitment to "One Yahoo" dissipates below the vice president level, where everyday decisions need to be made. Yahoo representatives declined to comment for this article.

How has this culture affected Yahoo? Think of it from the viewpoint of an average Yahoo user. A woman might one day search for health information about the common cold, then visit Yahoo's health site, and then check her e-mail. For Yahoo to sell a comprehensive advertising package to a retailer like Target--which might like to reach shoppers with a message about cold medicine--the company's sales team ideally would sell Target a package of search ads, graphical ads on Yahoo Mail, and a sponsorship deal on the health page.

To pull that off, the deal might involve leaders from search and performance ad sales; graphical ad sales and sponsorships; Yahoo Mail; and the health editorial page. If any of those leaders' interests are misaligned, the deal could fall through or not meet its full potential. Sources familiar with the company said egos among team leaders can often get in the way of pushing through such deals.

Corporate patterns evolve over time, and they're hard to change once set, according to Adam Galinsky, a professor of ethics and decision in management at Northwestern University's Kellogg School of Management. Southwest Airlines, for example, started out in the airline business with restrictions that prevented its fleet from flying anywhere directly from its Texas hub, except for the four surrounding states. So Southwest had to develop quick turnaround times at those points in order to service the rest of the country, a pattern that made it faster than rivals, he said.

For any company to re-engineer a culture, it must overhaul all elements, Galinsky said. A company must have clear vision (or a compelling reason why change is necessary), define a strategy for the organization, set up a reward system that supports that vision, and hire people who fit into the vision. For example, if you want people to work in teams, but you reward them individually, the reward system doesn't work.

"Where most companies fail is when they change one part, but they leave all the other elements intact," Galinsky said.

Can Yang inspire change?
Yahoo has changed some parts of its culture, like overhauling management. And while company watchers say Yang has the personal capital with employees to run the company, he may not be the charismatic leader it needs to walk the halls and achieve change one person at a time. What's more, insiders say, is that Yahoo employs a few senior executives who are unwilling to change.

There's no doubt Yahoo growth has stagnated.

In the United States, the number of monthly visitors to Yahoo was 137 million in December 2007, up 5 percent from the same month in 2006, according to ComScore Media Metrix. But the company's total monthly page views declined 9 percent year over year from 33 billion in December 2006. In contrast, Google's total U.S. monthly page views rose by 76 percent to about 24 billion. Google's total monthly visitors also grew to 133 million in December, up 18 percent from the previous year.

Search was a similar story. Yahoo's share of the U.S. search market dropped to 23 percent in December, down about 5 percent year over year. Google's share of the search market was about 58 percent, up from about 52 percent last year.

Globally, Yahoo is second to Google, too. In December, Yahoo had 485 million monthly visitors worldwide, versus Google's 588 million, according to ComScore.

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17 comments

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Good Article
Thanks Stefanie. Nice to read an article on he importance of culture in an organization. It's often the most underestimated factor inhibiting corporate performance.
Posted by cparente (8 comments )
Reply Link Flag
Agreed, n/t ...belongs HERE! :8}
:8} Sorry
Posted by btljooz (401 comments )
Link Flag
Like ALL Large Coporations
that get too big too fast, mo$tly for the wrong reasons, Yahoo needs to remember the K.I.S.S. method.

What mostly helped Yahoo grow into what it is now is Simplicity.

Hey, Yahoo! As a user of many years, I give this advice: [b]K[/b]eep [b]I[/b]t [b]S[/b]hort & Sweet!!!

Knock off all the complication, go back and look at your roots, LEARN from your early Simplicity. ;)
Posted by btljooz (401 comments )
Reply Link Flag
Hire Koogle back
Hindsight is 20/20; it's clear that TK was responsible for the Yahoo magic. Yang and Filo may have founded the company, but Koogle came around early and his mark was (obviously) substantive. If he'll take the job the Board should hire back TK. Firing people -- unless they're in the executive suite that caused this mess -- seems like exactly the wrong thing to do. All they'll do is drive up the street, take jobs at Google, and implement all the things they would've had they been allowed to at Yahoo, one or two which will make Google gobs of money and allow it to pound Yahoo further into the ground.
Posted by michaelo1966 (159 comments )
Reply Link Flag
Yahoo's new direction
Millions of people now want to get on the web, to do videos, mashups, businesses, trades, look for jobs, make websites, blogs, this and that. And they don't have the patience to learn two dozen different interfaces or type the same stuff into two dozen different sites. Yahoo needs to become a do-it-all portal with a simple interface. You should even be able to connect your video camera to Yahoo, upload and edit the result, then put it in a templated site or blog or store or whatever, and auto-connect with friends and interested parties to notif or sell, using neural-net-like tags. But again, the tech must be hidden. The tags would be auto-generated by an artificial intelligence program, although techies could override. We also need more picture and video recognition, not just text. This is the next phase, and Yahoo could catch on to it, since they have such resources, although not quite organized and simplified.
Posted by cybervigilante (529 comments )
Reply Link Flag
Yahoo VERY UNSECURED
When you sign up for a yahoo account, it asks you what city you were born in, and your date of birth. ANYONE who knows that information can use it to hack your account and reset your password. Anyone. Even better, yahoo does not allow you to change that information once you enter it. So if someone finds a way to hack your account this way, there is NOTHING you can do to stop them. You can't go back and create a fake birth city or date. I believe this flaw is big enough to receive national attention. I've sent Yahoo several emails and reported it to their security division, and they have done NOTHING.
Posted by nmcphers (261 comments )
Reply Link Flag
YHOO used to crash
when it had 80000 simultaneous users...anybody remember that "ap"? that told you how many people were using yahoo at the same time?
for a long time its operating profits came from bank interest on its war chest. now, it's a dinosaur.
the brand itself is aging, and lacks any means to refresh, without purging some of its dust, like yahoo personals, which is a serious money maker for it, but just another reason to use MySpace's less meat-rack formulas for opening a dating circle; find real ways build community that has site -stickiness (a 90s term) and get organisedly back into the vision of what a portal is.
the recent "web 2" makeover is jarring, and, by my tests, a ram hog.
overall, imho what yhoo reallly needs is to find out what people actuallly want, and then see if it can deliver it.
Posted by bridge solution (42 comments )
Reply Link Flag
Remove the bloat
I use Yahoo mail since it comes with my DSL account at AT&T. To use their web mail when away from home, I login from a login screen that takes me to the crowded Yahoo home page. I then have to click on a mail link there. This directs me to a page with more news links, where I have to again click another mail link to actually get to my inbox. Maybe the other web mail services would run me through the same gauntlet to generate them more page views, but it's a waste of my time. Fortunately I can use a mail client at home to read Yahoo mail for free as part of AT&T's package, otherwise I would be looking for another mail service.
Posted by jshale (37 comments )
Reply Link Flag
You can go to Yahoo email directly
Why are you logging in through the home page to check email?

You can access Yahoo email by going to <a class="jive-link-external" href="http://mail.yahoo.com" target="_newWindow">http://mail.yahoo.com</a>
directly.
Posted by iBuzz (330 comments )
Link Flag
Finance and Sports rock - don't touch those!
I guess everyone wants Yahoo to be Google. Whatever. I love
finance.yahoo.com and sports.yahoo.com just the way they are. I
use those everyday. Except for occasionally checking
news.yahoo.com, I don't usually use much more from them. But
those are great sites -- the best in their class in my opinion. I
hope their cuts don't affect anybody in those divisions.
Posted by iBuzz (330 comments )
Reply Link Flag
Their advertising shows their desparation
They use questionable animated advertising from time to time, things that animate across the page you're reading.... Things that make you run your spyware detectors, because you can't beleive a company of Yahoo's (former) prominence would do them... But no, it's not Spyware... It's Yahoo running Desparationware
Posted by johnxtampa (22 comments )
Reply Link Flag
Yahoo<---Obsolete, A brand still without a product
Maybe some Chinese company will come along and buy the name
and start selling stereos and steam irons or something with the
Yahoo brand. Yang and company need to just pull the plug and go
away. Yahoo just doesn't have anything unique to offer. After
being horribly mismanaged by the incompetent Terry "I make the
most money for doing nothing" Semel, Yahoo needs to die a quick
death and go away!
Posted by aaydogan (123 comments )
Reply Link Flag
Yahoo Can Change
I have been using Yahoo messenger for a long time, I think now atleast 5 years, and I like it enough never to have to move to use anything else.

Sure there is the MSN messenger, but so what, I like Yahoo better and got used to it.

YAhoo can still come around, nothing is too late, if they stop counting beans and start to concentrate on inovation (what got them started), stop hiring managers, lawyers and function bean counters and start hiring young fresh mind with ideas, pay them the Big bucks, cuz no laywer or business manager can come up with anything other than a report comparing this quarter to the prior.

There is only two types of people in this world: Leaders and Followers. Yahoo used to be a leader, now it's just catching up and following.

Get rid of all the fat pork that made you to follow, and start leading again, or you will be R.I.P. and I will have to switch messenger clients.
Posted by RompStar_420 (772 comments )
Reply Link Flag
Yahoo merge with EBAY!!!!
A merger with Ebay (first proposed back in 1999) could save Yahoo. Ebay gets millions of page hits daily that Yahoo could translate into more joint website visits. (e.g. imagine seeing a small box showing Ebay auctions closing soon on Yahoo.) It would make up for the marked failure of Yahoo Auctions. And would bolster Yahoo's marketplace against Google's Checkout Service...

Also Yahoo-Ebay-Skype-Paypal-Craigslist would be better under the same roof, and it would be a force to recon- with...

It would happen if Yahoo and Ebay would announce a merger.... I think that would be a better company.... It would certainly add some "umpph" for Yahoo's failed Yahoo Auctions and slightly lack luster performance of "Yahoo MarketPlace".... A Paypal/Yahoo Market Place could soooooo totally compete against Google's upstart "Google Checkout" online store service....
Posted by JCPayne (820 comments )
Reply Link Flag
maybe they could move
maybe yahoo would run better in china. didn't they help the communist gov't there hunt down some dissidents or something one time? they should all be on good terms.
Posted by galacticgufus (44 comments )
Reply Link Flag
I just found a flaw in the yahoo mail system where I can see other peoples inbox. I can't read their mail, but I do appear to be able to delete it. I have an account in yahoo mail classic with over 70,000 unread emails in it, and when I sort by date, the view changes and I am looking at what is obviously someone else's email. I can refresh to see a new account.
Posted by all106 (1 comment )
Reply Link Flag
In regard to your Yahoo writing,let my tell you ,that for about a week,I can not acces my inbox at Yahoo
I`been using for years,Idid everything that I was supouse to be able to regain the acces with no luck.
Is there a way to communicate directly to a costumer helper,by phone?. I d`nnt want to lose the addresses of so many friends.
Tia:antonio384@Gmail.com
Posted by avpg (1 comment )
Reply Link Flag
 

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