A Case Study About Yahoo! by Chau Nguyen

CS4028 Case Assignment Nguyen Ngoc Minh Chau Matriculation number: N1301227A Nanyang Technological University October 2013

Change Management at Yahoo! Inc. I see everything as an experiment. We’ll try anything once. Then, if something goes wrong, know how to learn from it. – Marissa Mayer, CEO, Yahoo! Inc. On 16 July 2012, Yahoo! officially announced the appointment of its new President and Chief Executive Officer (CEO) Marissa Mayer, who used to work for its main competitor Google Inc. for 13 years and last served as Vice President of local, maps, and location services.1 Mayer is the fifth CEO appointed after the company underwent a constant change of leadership over a period of five years. Coming from Google, Mayer faced high expectations from everyone to revive the struggling company, since the last CEOs failed to bring it back to its glorious days in the nineties. Started out in 1994 as a hierarchical directory of other websites, Yahoo! grew rapidly throughout the 1990s as a search engine and Web information portal, attracting millions of users worldwide.2 Its stock price skyrocketed during the dot-com bubble, reaching an all-time high of $118.75 per share in 2000.3 However, with the rise of Google as the number one search engine and countless social networking platforms, Yahoo! has been struggling to compete in search, email, and data sharing for the past 10 years. Not being able to innovate its products and define a clear vision and identity, the brand began to lose its place in the consumers’ mind. Among the top 100 global brands in 2012 by Interbrand report, Yahoo! ranked at 97, losing to its competitor Google, who ranked at number four.4 Currently, according to 2013 report, Yahoo! is no longer in the top 100 brands whereas Google has climbed to number two.5 As the new CEO of Yahoo!, Marissa Mayer undertook a huge task: to lead the company in a new direction that would increase profit and resume its prominent place in the market. Mayer strongly believed in Yahoo!’s potential to come back on the road to success, as it has a strong brand recognition and a vast audience. Basing her strategy on four major 1

Yahoo! appoints marissa mayer chief executive officer. (2012, July 16). Yahoo! . (n.d.) 3 Ibid. 4 Interbrand. (2013). Best global brands 2012 5 Interbrand. (2013). Best global brands 2012 2

pillars: people, product, traffic and revenue, she explained this strategy as a chain reaction of attracting great people to build great products, which will in turn attract users, who can then generate advertising (and other) revenue. 6 The young female CEO has since made several bold decisions to recruit talents, improve the organizational culture, and revamp products for the company. One year after her official appointment, Mayer still had trouble convincing the public to believe in the future of the old time star company. In July 2013, the company reported that overall revenue in the second quarter had declined from a year earlier, although its stock price had nearly doubled under her reign. (See Exhibit 1 for Yahoo! Reports Second Quarter 2013 Results) Mayer, however, remained positive about the company’s stage of being in her statement: “Our business saw continued stability, and we launched products than ever before, introducing a significant new product almost every week,” “this quarter drove tremendous improvements in our product line and our users responded with increased usage and engagement.”7 She also noted that it would take Yahoo! “three or more years” to get the company where they want it.8 Regardless of any type of organizational change, it will come with expected resistance. Mayer has faced with criticism about her many changes within the organization, two of which are noteworthy: work-from-home ban and new Yahoo! aesthetic image, including a new logo and new user interface for majority of Yahoo!’s services.

Yahoo! In The Market Yahoo! Inc. Yahoo! was founded in 1994 by two Stanford PhD. candidates David Filo and Jerry Yang as a Web information portal. Until now, the company has become a giant Internet technology corporation with its headquarter in Sunnyvale, California and 11,700 employees in 25 countries, provinces and territories.9 Apart from its search engine Yahoo! Search, it provides many other services to its users, some of which are very popular namely Yahoo! Weather, Yahoo! Finance, Yahoo! Mail, Yahoo! Sports and Yahoo! News. In June 2013, current CEO Marissa Mayer made Yahoo!’s largest $1.1 billion acquisition of the popular microblogging and social networking site Tumblr, adding a “fresh air” to its range of services. Although Yahoo! is still ranked by research firm comScore as a top-five web 6

Gallagher, B. (2013). Yahoo monthly active users are up 20% to 800m, including 350m on mobile, says marissa mayer. Tech Crunch 7 Yahoo! reports second quarter 2013 results. (n.d.). 8 Gallagher, B. (2013). Yahoo monthly active users are up 20% to 800m, including 350m on mobile, says marissa mayer. Tech Crunch 9 Yahoo! . (n.d.)

property in terms of visitor numbers10 (over 800 million monthly active users worldwide), for a long time, it has struggled to find its identity. Juggling between being a media company that creates content for users and a technology company that enhances users online experience, at the moment, Yahoo! is calling itself a “technology-powered media company” which create “deeply personal digital experiences” for its users. 11 Wharton management professor Lawrence G. Hrebiniak noted that with frequent turnover of leadership, “Yahoo has lacked focus for years, while Google and Facebook have been more focused” and that “Yahoo needs to come out with a new, compelling product that is not an effort to catch up with Google or Facebook or anyone else, but instead is revolutionary.”12

Yahoo!’s Competition Yahoo has still been losing ground to Google and Facebook in the Internet advertising market, which generates most of their revenue. According to Interactive Advertising Bureau, in terms of ad commissions, Facebook’s revenue grew 37 percent, followed by Google with 21 percent, while Yahoo!’s revenue increased just by 2 percent in the previous year.13 Now, it finds itself competing with Google for search as well as web mail, photo sharing and a number of other services. In the online search market, Google currently holds 67 percent market share, while Yahoo hits another new low of 11.3 percent.14 (See Exhibit 2 for comScore Explicit Core Search Share Report September 2013) Yahoo! is also struggling to hold its own against social networking sites, like Facebook, which have become the web’s meeting spots.

Yahoo! Changes Under Marissa Mayer’s Leadership As the new CEO of the flailing Internet giant, Marissa Mayer surely had a lot to do to get it back on track. As mentioned earlier, amongst her focuses in rejuvenating Yahoo! are people and product, which are demonstrated clearly in her recent installations of change within the company.

(2012). Under new leadership, will yahoo find its way? . Knowledge@Wharton Yahoo! appoints marissa mayer chief executive officer. (2012, July 16). 12 (2012). Under new leadership, will yahoo find its way? . Knowledge@Wharton 13 (2013). How ceo marissa mayer turned around yahoo . USA Today 14 Lee, J. (2013). Google's search market share shoots back to 67%. Search Engine Watch 11

Work-from-home Ban at Yahoo! Inc. In February 2013, Mayer enacted a policy that requires every employee of Yahoo! to work in the office and can no longer work remotely, starting in June 2013.15 The new policy was communicated to its employees through an internal memo sent by Yahoo!’s Head of Human Resources – Jackie Reses. (See Exhibit 3 for Yahoo! internal memo on the policy) In the memo, she emphasized the purpose of this policy as to foster “communication and collaboration” and to make Yahoo! “become the absolute best place to work”.16 The reason for instilling a fairly debatable policy was explained as “Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.”17 Finally, the Human Resources executive asked employees who she refer to as “who occasionally have to stay home for the cable guy,” to “use your best judgment in the spirit of collaboration.” when making arrangement to work from home.18 According to reporter Miller from The New York Times, the policy affected around 200 Yahoo!’s employees who were working remotely.19 Inside Yahoo, there has been mixed reaction to the policy change. The policy initially infuriated some employees at the company who had work-at-home arrangements and worried others who occasionally stayed home for personal reasons. Many carried the assumption that they could work flexibly when they were hired.20 One impacted employee described the policy as “outrageous and morale killer.”21 Employees who were in favor of telecommuting claimed to be more productive by working remotely, and that it helped them concentrate on work instead of the chaos inside Yahoo!.22 On the other hand, several former and current employees recognized that Mayer’s decision was to address particular problems at Yahoo!, as they reported empty parking lots and empty cubicles due to people were working as little as possible and leaving early.23 According to them, the work ethic at Yahoo! among some workers has deteriorated over time and some employees have abused the former policy to the point of founding start-ups while being on salary at Yahoo!24 A former manager at Yahoo! said “Morale was terrible because the 15

Swisher, K. (2013). “physically together”: Here’s the internal yahoo no-work-from-home memo for remote workers and maybe more. All Things D 16 Ibid. 17 Ibid. 18 Ibid. 19 Miller , C. (2013). Yahoo says new policy is meant to raise morale. The New York Times 20 Swisher, K. (2013). “physically together”: Here’s the internal yahoo no-work-from-home memo for remote workers and maybe more. All Things D 21 Ibid. 22 Miller , C. (2013). Yahoo says new policy is meant to raise morale. The New York Times 23 Ibid. 24 Miller , C. (2013). Yahoo issues a statement on work-at-home ban. Bits

company was thought to be dying. When you have those root issues, an employee work force that is not terribly motivated, it built bad habits over years.”25 In Mayer’s rationale, requiring people to show up to work was necessary to foster a more connected Yahoo!’s culture and to motivate the troops. “People are more productive when they’re alone, but they’re more collaborative and innovative when they’re together. Some of the best ideas come from pulling two different ideas together.” said Mayer in the Great Place to Work conference, citing Yahoo!’s weather app as the latest innovation to come out of the work-from-home ban.26 In addition, Mayer’s abolishment of telecommuting policy fueled some public debates over workplace flexibility, as this discouraged working parents who have family responsibilities outside work. Some industry professionals found Mayer’s method as “a step backwards” since they believed flexible work arrangements are “the way of the future”.27 Mayer was criticized more when she was reported to have built a nursery for her young son next to her office, which seemed contradicting to her rationale of releasing a ban for workfrom-home. The company consequently responded to the controversy with a statement: “This isn’t a broad industry view on working from home – this is about what’s right for Yahoo, right now.”28 In April 2013, Mayer changed Yahoo!’s maternity leave policy, lengthening its time allowance and providing a cash bonus to parents.29 Employees’ concerns over losing work flexibility have also been eased by managers who assured them that the real targets of Yahoo!’s memo were the approximately 200 employees who work from home full time.30 One manager said he told his employees, “Be here when you can. Use your best judgment. But if you have to stay home for the cable guy or because your kid is sick, do it.”31 Beside prohibiting telecommuting to the office, Mayer’s efforts to revitalize Yahoo!’s corporate culture include introducing free food in the cafeterias, providing employees with smart phones, and starting a Friday where executives take questions and speak candidly.32 Yahoo!’s employees said that unlike previous chief executives, who focused outside Yahoo!, Mayer has prioritized fixing the company internally and motivating employees.33 24

Greenfield, R. (2013). Greenfield, r. (2013). the atlantic wire. marissa mayer's work-from-home ban is working for yahoo, and that's that, . The Atlantic Wire 26 Tkaczyk, C. (2013). Marissa mayer breaks her silence on yahoo's telecommuting policy. CNN Money 27 Goudreau, S. (2013). Back to the stone age? new yahoo ceo marissa mayer bans working from home. Forbes 28 Miller , C. (2013). Yahoo issues a statement on work-at-home ban. Bits 29 Marissa Mayer . (n.d.) 30 Miller , C. (2013). Yahoo says new policy is meant to raise morale. The New York Times 31 Ibid. 32 Ibid. 33 Miller , C. (2013). Yahoo says new policy is meant to raise morale. The New York Times

A New Look for Yahoo! On 7 August 2013, Yahoo! announced on its official blog that it would introduce a new logo in a month time, after having the old logo for 18 consecutive years.34 This sudden change actually came natural according to Chief Marketing Officer – Kathy Savitt: “Over the past year, there’s been a renewed sense of purpose and progress at Yahoo!. and we want everything we do to reflect this spirit of innovation. While the company is rapidly evolving, our logo – the essence of our brand – should too.”35 Moreover, CEO Mayer explained on her blog that the logo change also happened as a result of an internal poll among Yahoo!’s employees, 87 percent of which “wanted some type of change in the logo (either iterative or radical).”36 She said that the new Yahoo! logo has met a lot of employees’ requests, who she referred to as “people who know us best.”37 Simultaneously, in an effort to create more interest in the logo changeover, Yahoo! launched the ’30 Days of Change’ campaign to introduce 30 logo designs on its home page each and everyday preceding the reveal of the official logo on 5 September 2013 at 12:00 a.m. EST.38 Yahoo! claimed the new logo as “a modern redesign that’s more reflective of our reimagined design and new experiences,” however, it would keep the colour purple and the exclamation point to “preserve the character that is unique to Yahoo! – fun, vibrant, and welcoming.”39 (See Exhibit 4 for Yahoo!’s old vs. new logo) As part of its rebranding package, Yahoo! also rolled out a redesign of some of its platforms, such as Yahoo! Sports, Yahoo! Screen, Yahoo! Mail, Yahoo! Flickr, Yahoo! News, and Yahoo! Weather. The new look was planned to be given to all of Yahoo!’s properties – aiming to make the experience for users more personal, consistent and engaging, as stated on Yahoo!’s official blog: “At Yahoo, we realize that it’s not just the quality of the content that keeps you coming back, it’s the experience. That’s why we’ve made changes to almost every view of the app to make it cleaner, faster and more engaging.”40 The new Yahoo! logo certainly sparked a lot of controversy from the public, where a majority of people stated unfavorably of it. According to reporter MacMillan from Bloomberg Television’s “Bloomberg West”, the Internet audience did not like the change and it was hard to persuade them to like the new logo with a brand they have known and liked for 34

Savitt, K. (2013). Kicking off 30 days of change. Ibid. 36 Mayer, M. (2013). Geeking out on the new logo. 37 Ibid. 38 Savitt, K. (2013). Kicking off 30 days of change. 39 Ibid. 40 Delgado, F. (2013). Yahoo app for ios 7: Now with breaking news, “my saves,” and cinemagraphs 35

years.41 Many industry professionals gave their inputs that a new logo should convey a brand’s identity, which Yahoo! has struggled with for a long time, and that a new logo should not be the focus of Yahoo at the moment.42 Furthermore, the ‘30 Days of Change’ campaign was criticized for being “gimmicky” and not innovative enough to reflect on Yahoo!’s progression.43 In response to the on-going argument about the new logo, CEO Mayer defended her choice: “I like the way the logo turned out, and I like the way we did it.”44 She explained that Yahoo! was staying true to its root by creating the logo in-house, since they pride themselves as “being the world’s largest startup”.45 Mayer continued to reaffirm her vision for the brand: “For us, what the brand is really about is the products. We’re happy with the logo, but for us the focus is really on the product.”46

Initial Turnarounds at Yahoo! Inc. When Marissa Mayer became CEO of Yahoo!, the company was not in a good place: it had cycled through four different CEOs and lost many of its top executives, while failing to boost its display advertising business or develop new revenue streams. Employees repeatedly faced with undelivered promises of change and innovation from the management team. After one year of countless changes and initiatives, Mayer has brought some exciting results to the ailing Internet giant. Currently, Yahoo!’s monthly active users are up 20 percent to 800 million around the world, including 350 million monthly active users on mobile, in comparison to July 2012 (these statistics exclude Tumblr’s users). 47 Under her reign, Yahoo!’s revenue is slightly increasing after three years of decline, and the company’s stock was reported to rise by 71 percent, most likely due to from its part ownership of the Chinese giant e-commerce firm, Alibaba Group.48 Investors have been please with Mayer’s monetized move to reduce the amount of outstanding stock, with a decrease of 9 percent in outstanding shares from July 2012.49 Driving talents and reviving company culture were at the core of Mayer’s strategy during her first year at Yahoo!. Mayer believed that in order to attract talents, the workplace 41

Don’t like the new yahoo logo… blame the employees. (n.d.). Peterson, T. (2013, August 9). Yahoo’s tweaks to 18-year old brand are underwhelming, industry execs say. AdAge 43 Ibid. 44 Stenovec, T. (2013). Marissa mayer defends yahoo logo. The Huffington Post 45 Ibid. 46 Ibid. 47 Lilly, P. (2013). Yahoo soars to 800 million active users under marissa mayer's leadership. 48 Yarow, J. (2013). Marissa mayer's video show is a smashing success: Yahoo stock is flying this morning read more. Business Insider 49 (2013). How ceo marissa mayer turned around yahoo . USA Today 42

had to be great at first; therefore resetting the culture at Yahoo! was her top priority. “My goal is not to change the culture, but to amplify its greatness”50 shared Mayer. After offering exciting employee benefits (such as free food, smartphones, laptop, etc.) and attractive compensation packages, together with Mayer’s controversial ban of work-from-home, Yahoo! has seen better employee satisfaction and a surge in employee applications.51 Mayer's pedigree also helped persuade more talents and startups to join Yahoo!, bringing along their expertise and innovations.52 “As I’ve said before, companies with the best talent win, and it’s clear we’re not back in the game,” Mayer confidently declared during a Yahoo!’s earnings conference call in April 2013.53 Furthermore, her makeover of Yahoo!’s homepage and related sites has gained people’s attention. In May 2013, reported by the research firm comScore, the total amount of time spent on Yahoo.com in the U.S. rose by 36 percent from the same time of previous year.54 The increased usage gave Yahoo! more opportunities to display ads. Mayer, however, remained cautious when discussing the company’s future: “Getting the company growing at the rate we would like will take several years. Our long-term success will be defined by a series of sprints – we are reaching the end of the first sprint. The first phase was all about getting people to believe in Yahoo, making Yahoo a really terrific place to work and contribute, and getting the organization fit.”55 The female CEO set concrete vision for her next step, “Now our focus will shift to the next sprint, which is all about building beautiful products and executing well against our business strategy. This will lead to greater user engagement.”56

Challenges Going Forward Under Marissa Mayer’s leadership, Yahoo! has been making progress in regaining its early success back in the old days. The insightful CEO, bringing her expertise and experience from 13 years of working for the powerhouse Google, set a plan for Yahoo!’s turnaround under three sprints: first is to recruit “great people”, then to use those people to build “great products”, and ultimately those better products will lead to “bigger and better audience 50

Tkaczyk, C. (2013). Marissa mayer breaks her silence on yahoo's telecommuting policy. CNN Money Indvik, L. (2013). Marissa mayer is turning yahoo around. Mashable 52 (2013). How ceo marissa mayer turned around yahoo . USA Today 53 Ibid. 54 (2013). How ceo marissa mayer turned around yahoo . USA Today 55 Ellis, J. (2013). Mayer's grand entrance. Success 56 Ibid. 51

engagement”, which will reverse the decline in Yahoo!’s core advertising business. 57 However, many of Yahoo!’s products, especially advertising products, are still falling behind those of Google or Facebook, which are more sophisticated and well targeted. According to Marla Kaplowitz, the chief of media agency MEC North American, “Yahoo still needs to be a lot more nimble,” in terms of its products.58 Although Yahoo!’s stock has increased since Mayer’s appointment, the company has yet to make any solid gains in revenue or profit. Moreover, Yahoo! is also facing branding challenges: while Yahoo! has been perceived quite positively under Mayer’s reign, it is still unclear whether the brand has improved in the eyes of the general public or even those loyal Yahoo!’s users, who may only be partially aware of Yahoo!’s improvements thus far.59 CEO Mayer acknowledged the challenges of the Internet giant, “I’m not confused; I know we have a lot of work to do. Up until now, things have gone really well…I was optimistic, but a lot of the progress we have made has surpassed even my expectations.”60 Will Yahoo! find its way back to be the leading Internet company that wins over million of users worldwide again?

Indvik, L. (2013). Marissa mayer is turning yahoo around. Mashable Stone, B. (2013). Can marissa mayer save yahoo?. BloombergBusinessweek 59 Indvik, L. (2013). Marissa mayer is turning yahoo around. Mashable 60 Stone, B. (2013). Can marissa mayer save yahoo?. BloombergBusinessweek 58

Exhibit 1

Yahoo! Reports Second Quarter 2013 Results

Source: Yahoo! Reports Second Quarter 2013 Results, via http://www.yahoo.com, accessed October 2013.

Exhibit 2

comScore Explicit Core Search Share Report, September 2013

Source: comScore Explicit Core Search Share Report, via http://www.comscore.com, accessed October 2013.

Exhibit 3

Yahoo!’s Internal Memo on Work-from-home Ban, February 2013

Source: “Physically Together”: Here’s the Internal Yahoo No-Work-From-Home Memo for Remote Workers and Maybe More, via http://www.allthingsd.com, accessed October 2013.

Exhibit 4

Yahoo!’s New Logo vs. Old Logo

Source: student’s creation.

References (2012). Under new leadership, will yahoo find its way? . Knowledge@Wharton, Retrieved from http://knowledge.wharton.upenn.edu/article/under-new-leadership-willyahoo-find-its-way/ (2013). How ceo marissa mayer turned around yahoo . USA Today, Retrieved from http://www.usatoday.com/story/tech/2013/07/16/yahoo-mayer-oneyear/2520355/ Delgado, F. (2013). Yahoo app for ios 7: Now with breaking news, “my saves,” and cinemagraphs. Retrieved from http://yahoo.tumblr.com/post/61586908883/yahoo-app-for-ios-7-now-withbreaking-news-my Don’t like the new yahoo logo… blame the employees. (n.d.). Retrieved from http://www.bloomberg.com/video/don-t-like-the-new-yahoo-logo-blame-theemployees-z4X_vkPLQbWKCFCt1XTkJg.html Ellis, J. (2013). Mayer's grand entrance. Success, Retrieved from http://www.success.com/article/mayers-grand-entrance Gallagher, B. (2013). Yahoo monthly active users are up 20% to 800m, including 350m on mobile, says marissa mayer. Tech Crunch, Retrieved from http://techcrunch.com/2013/09/11/marissa-mayer-yahoo-monthly-active-users-areup-20-to-800m-including-350m-on-mobile/ Goudreau, S. (2013). Back to the stone age? new yahoo ceo marissa mayer bans working from home. Forbes, Retrieved from http://www.forbes.com/sites/jennagoudreau/2013/02/25/back-to-the-stone- age-newyahoo-ceo-marissa-mayer-bans-working-from-home/ Greenfield, R. (2013). Greenfield, r. (2013). the atlantic wire. marissa mayer's workfrom-home ban is working for yahoo, and that's that, . The Atlantic Wire, Retrieved from http://www.theatlanticwire.com/technology/2013/03/marissa- mayer-workhome-ban-working/62810/ Indvik, L. (2013). Marissa mayer is turning yahoo around. Mashable, Retrieved from http://mashable.com/2013/07/16/yahoo-marissa-mayer-first-year/ Interbrand. (2013). Best global brands 2012. Source retrieved from http://www.interbrand.com/en/best-global-brands/previous-years/2012/BestGlobal-Brands-2012.aspx Interbrand. (2013). Best global brands 2013. Source retrieved from http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands2013.aspx

Lee, J. (2013). Google's search market share shoots back to 67%. Search Engine Watch, Retrieved from http://searchenginewatch.com/article/2289560/Googles-SearchMarket-Share- Shoots-Back-to-67 Lilly, P. (2013). Yahoo soars to 800 million active users under marissa mayer's leadership. Retrieved from http://hothardware.com/News/Yahoo-Soars-to-800-MillionActive-Users-Under-Marissa-Mayers-Leadership/ Marissa Mayer . (n.d.) Retrieved from http://en.wikipedia.org/wiki/Marissa_Mayer Mayer, M. (2013). Geeking out on the new logo. Retrieved from http://marissamayr.tumblr.com/post/60336044815/geeking-out-on-the-logo Miller , C. (2013). Yahoo says new policy is meant to raise morale. The New York Times, Retrieved from http://www.nytimes.com/2013/03/06/technology/yahoos-in-office-policy- aims-tobolster-morale.html?pagewanted=1&_r=1& Miller , C. (2013). Yahoo issues a statement on work-at-home ban. Bits, Retrieved from http://bits.blogs.nytimes.com/2013/02/26/yahoo-issues-a-statement-onwork-at-home-ban/ Peterson, T. (2013, August 9). Yahoo’s tweaks to 18-year old brand are underwhelming, industry execs say. AdAge. Source retrieved from http://adage.com/article/digital/yahoo-s-tweaks- 18-year-brandunderwhelming/243629/ Savitt, K. (2013). Kicking off 30 days of change. Retrieved from http://yahoo.tumblr.com/post/57582020969/kicking-off-30-days-of-change Stenovec, T. (2013). Marissa mayer defends yahoo logo. The Huffington Post, Retrieved from http://www.huffingtonpost.com/2013/09/11/marissa-mayer- yahoologo_n_3909836.html Stone, B. (2013). Can marissa mayer save yahoo?. BloombergBusinessweek, Retrieved from http://www.businessweek.com/articles/2013-08-01/can-marissa-mayersave-yahoo Swisher, K. (2013). “physically together”: Here’s the internal yahoo no-work-fromhome memo for remote workers and maybe more. All Things D, Retrieved f rom http://allthingsd.com/20130222/physically-together-heres-the-internalyahoo-no-work-from-home-memo-which-extends-beyond-remote-workers/ Tkaczyk, C. (2013). Marissa mayer breaks her silence on yahoo's telecommuting policy. CNN Money, Retrieved from http://tech.fortune.cnn.com/2013/04/19/marissa-mayertelecommuting/ Yahoo! appoints marissa mayer chief executive officer. (2012, July 16). Yahoo Pressroom. Retrieved from http://pressroom.yahoo.net/pr/ycorp/236553.aspx

Yahoo! . (n.d.). Retrieved from http://en.wikipedia.org/wiki/Yahoo! Yahoo! reports second quarter 2013 results. (n.d.). Retrieved from http://investor.yahoo.net/releasedetail.cfm?ReleaseID=777694 Yarow, J. (2013). Marissa mayer's video show is a smashing success: Yahoo stock is flying this morning read more. Business Insider, Retrieved from http://www.businessinsider.com/yahoo-stock-earnings-2013-7

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Change Management at Yahoo! Inc. TEACHING NOTE Case Synopsis Yahoo! used to be the leading Internet pioneer in the nineties. It was widely known for defining the Internet and how people searched for information and connected virtually. However, with the rise of Google as the number one search engine worldwide and countless social media platforms, Yahoo! has been on the decline for the past 10 years. Although the web portal pioneer is the fourth-largest site on the Internet and has an audience of millions, it has been struggling to compete in search, email, and data sharing. Not being able to innovate its products and services, the brand began to lose its place in the consumers’ mind. Since Marissa Mayer was appointed as Yahoo!’s CEO in July 2012, the company has been revolving with many changes that she implemented. She believed the company has the potential to make a comeback: it has strong brand recognition, a vast audience, and despite challenges, revenues are going up. Basing her strategy around building a company of “great talents” and “great products”, Mayer has made some bold decisions, most remarkable are the work-from-home ban and change of Yahoo!’s aesthetic image, including a new logo. These changes have received both support and criticism from within Yahoo! to the public, however, have brought some initial turnarounds at the company. Yahoo! started to see a better structured workplace and an increase in its website and mobile usage. Going forward, Yahoo! still faces challenges from competition and establishing a clear identity for the brand. It remains unclear whether the brand has improved in the eyes of the public or even among its loyal user base, who may only be partially aware of Yahoo!’s improvements thus far. Will Yahoo! find its way back to be the leading Internet company again?

Use of the Case Change is inevitable in a big company if it wants to progress; moreover, change always comes with expected resistance. Understanding how to communicate change to different stakeholders can help company gain trust and support from them, thus foster its

growth. This case addresses the importance of change management within a big corporation that is on the decline.

Learning Objectives

To help students understand why changes came about in Yahoo!, as well as how

the management board communicated the changes to their stakeholders (employees, investors, public) of the company.

Applying the Page Principles 1. Prove it with action: Taking over a flailing Yahoo! after the consecutive failure of previous CEOs, Marissa Mayer knew she had to deliver more than she said. The former Google executive brought her expertise and insightfulness to turn Yahoo! around by a series of changes and initiatives. Mayer did cope with criticism about her highly controversial decisions of banning telecommuting and releasing a new Yahoo! logo. However, after one year, she had revitalized Yahoo!’s corporate culture with employees constantly be present at work and thrilled by the pool of talents she brought in through acquisitions and aggressive hiring. Mayer also had revamped many of Yahoo!’s products to make it more appealing and engaging for users. The overall reaction from the public has turned positive, with a 20 percent increase in number of monthly active users and a 70 percent increase in stock. Mayer has got people attention about what she was doing, and she was on her way to deliver her promise. 2. Realize a company’s true character is expressed by its people: Before Mayer’s takeover, the culture of Yahoo! was on the verge of deterioration as the company was filled with unmotivated employees, who did not believe in the future of the company. Realizing the company cannot move forward without its great employees, Mayer set her priority to reconnect and motivate her employees by making Yahoo! a great place to work. She offered great employee benefits such as free meals, smartphones and laptops. Together with that, she also expanded maternity leave and provided cash bonus to encourage working parents. As a result, Yahoo! has seen better employee satisfaction and a surge in employee application, where the company reported to receive roughly 12,000 resumes every week. In Mayer’s rationale, more motivated employees at work will help build greater products, thus drive bigger and better audience engagement, along with more revenues for the company.

Discussion Questions 1. What appears to be the business problem of Yahoo! when Marissa Mayer was appointed as new CEO? 2. Do you agree or disagree with Marissa Mayer’s decision to ban telecommuting? Why/Why not? a. Do you think it was necessary for Yahoo! at that moment? Why/Why not? b. Do you agree or disagree with how the policy was communicated in the memo note? Why/Why not? c. If you were Marissa Mayer, would you communicate the policy differently? 3. Do you agree or disagree with Marissa Mayer’s decision to change Yahoo!’s logo? Why/Why not? a. What do you think the new logo strategically says about the company? b. If you were Marissa Mayer, would you introduce the new logo in a different way than how she did? 4. What challenges that Yahoo! is facing at the moment? 5. What is the best way to communicate those challenges to Yahoo!’s stakeholders?