Research Paper on "Yahoo Leadership"

Research Paper 17 pages (4561 words) Sources: 10 Style: APA

[EXCERPT] . . . .

Yahoo! Leadership

An Analysis of the Positive and Negative Impact of Leadership at Yahoo! Inc.

Because the quality of a company's leadership has such a profound impact on its performance and profitability, this topic has been the focus of a growing body of research over the years. In this regard, the research will show that the management at Yahoo! Inc. has had a myriad of positive and negative influences on the performance of the company. To illustrate this assertion, this study provides a review of the relevant peer-reviewed, scholarly and organizational literature to identify the positives and negatives about the leadership at Yahoo!, followed by a discussion concerning the influence that both positive and negative leadership has had on the company's performance in recent years. A summary of the research and salient findings are presented in the conclusion.

Review and Discussion

Company Overview

In just 15 short years, Yahoo! Inc. has emerged from the dot.com bust of the late 1990s to become one of the leading providers of Internet services to users, advertisers, publishers, and developers around the world today. According to the company's corporate profile (coincidentally also provided by Yahoo! Finance), Yahoo! Inc. (hereinafter "Yahoo" or "the company") provides an array of online properties and services to users as well as marketing solutions and tools to advertisers and publishers alike (Yahoo, 2009). The company's products and services include the following: Yahoo! Front Page, My Yahoo!, and Yahoo! Toolbar; search products consisting of Yahoo! Search, Yahoo! Yellow Pages, Yahoo! Maps, Yahoo! Local, Yahoo! Shopping, Kelkoo, Yahoo! Travel, Yahoo! Personals, and Yahoo! Answers (Yahoo). These powerful and sophisticated features provide its customers with a wide range of business solutions and useful tools that enable seamless online browsing and intelligent searches and are even accessible using a variety of mobile peripherals (Yahoo).

The company's communications and communities product line, including Yahoo! Mail, Zimbra Mail, Yahoo! Messenger, Yahoo! Groups, Yahoo! 360 degrees, and Flickr (Yahoo). The company also offers various information products, including Yahoo! News, a service that consolidates news stories; as well as Yahoo! Finance, the very service that provides their own company profile, key statistics, Security and Exchange Commission (SEC) filing, and a vast array of other useful tools that allow for easy analysis of company performance (Yahoo).

The company also offers services such as Yahoo! Sports; Yahoo! Shine for women; and Rivals.com, which provide online college and high school sports and recruiting information. The company's entertainment products include Yahoo! Music, Yahoo! Movies and Yahoo! TV, Yahoo! Games, Yahoo! Video, and omg! (Yahoo). Beyond the foregoing offerings, Yahoo also provide services for consumers such as Yahoo! Autos that provide users with the ability to research, price, and compare vehicles online; Yahoo! Real Estate for real estate information; Yahoo! Food, an online food destination; Yahoo! Tech that offers information on consumer electronics; Yahoo! Kids, an entertainment and educational Internet guide; and Yahoo! Health, a healthcare destination (Yahoo).

Finally, the company also offers services such as Yahoo! Digital Home, Yahoo! Mobile, and Yahoo! Desktop that provide its growing number of users with the ability to access the company's robust content and various online communities using any type of Internet-enabled device; in addition, Yahoo also offers Yahoo! Broadband; Yahoo! HotJobs, an online recruitment solution; and Yahoo! Small Business online services (Yahoo).

The company enjoys strategic partnerships with at&T, Inc.; Verizon Communications, Inc.; BT Telecommunications PLC; Rogers Cable, Inc.; and Newspaper Consortium (Yahoo). As reported in the company's most recent Form10-Q filing (November 7, 2008), Yahoo is.".. A leading global Internet brand and one of the most trafficked Internet destinations worldwide. We are focused on powering our communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust" (Form 10-Q, 2008, p. 2). The company also reports that it currently provides Internet services that are essential and relevant to a growing number of user communities, as well as advertisers, publishers, and developers, and seeks to grow these business units in the future (Form 10-Q, 2008). To this end, Yahoo has entered into a series of strategic partnerships over the years with various major well-known publishers, including eBay Inc., WebMD, Cars.com, Forbes.com, and the Newspaper Consortium (a consortium of more than 20 leading United States newspaper publishing companies) (Form 10-Q, 2008). The company was established in 1994 and currently maintains its headquarters in Sunnyvale, California (Yahoo).

Table 1 below provides a recapitulation of the company's key leadership team today.

Table 1.

Yahoo's current key leadership team.

Executive

Pay

Exercised

Mr. Jerry Yang, 40

Co-Founder and Chief of Yahoo!

Mr. Blake Jorgensen, 49

Chief Financial Officer

Mr. Michael J. Callahan, 40

Executive Vice President, Secretary and General Counsel

Mr. Michael a. Murray, 53

Chief Accounting Officer and Senior Vice President of Finance

Dr. Carol a. Bartz Ph.D., 60

Chief Executive Officer

Notes: Dollar amounts are as of December 31, 2007 and compensation values are cited for the last fiscal year ending on that date. "Pay" is salary, bonuses, etc. "Exercised" is the value of options exercised during the fiscal year.

Source: Yahoo! Finance, 2009.

Financial Performance

As can be readily seen in Figure 1 below, Yahoo's stock performance has consistently outperformed the NASDAQ, but, like the rest of the global economy, the company experienced some rocky periods following the dot.com bust in which it experienced a drastic decline in advertising revenues combined with the terrorist attacks of September 11, 2001.

Figure 1. Yahoo! Inc. (YHOO) stock performance vs. NASDAQ (IXIC): 1998 to date.

Source: Yahoo! Finance, 2009.

According to the company's most recent SEC quarterly report (November 7, 2008), the company anticipates relatively flat revenues in the coming months, but also takes pains to emphasize that it is well situated to take advantage of continuing growth in online use through its strategic partnerships, especially Google and at&T (Form 10-Q, 2008). In this regard, the company's most recent Form 10-Q states: "We believe our growing number of users, advertisers, publishers, and inventory, both on and off our network, over recent years has driven the increases in our marketing services revenues. We also believe our expanding offerings, including our enhanced algorithmic search technology, contribute to our growing number of users" (2008, p. 3).

Taken together, it would be reasonable to posit that Yahoo is well poised to take advantage of the continued growth in Internet access and online advertising, and its historic performance indicates that the company's leadership has played an integral role in helping Yahoo achieve its position in the market today and these issues are discussed further below, followed by an assessment of some of the more significant failures - at least in good judgment - that have plagued Yahoo to date.

Positive Leadership Contributions

Given the enormous number of business failures that occurred during the dot.com bust of the 1990s, it is reasonable to suggest that the company's leadership must have been doing something right to survive at all, not to mention emerging from the fiasco as a global provider of Internet services. For example, according to one chronicler of the company's successful history, "Looking back on Internet mania, one company stands out: Yahoo. it's as potent a symbol as any of the late 1990s phenomenon that swept popular culture, the stock market, the entrepreneurial set, and the economy at large" (Angel, 2002, p. 3).

When the company's leadership made the decision in March 1996 to take the company public, investors could not buy enough of its stock and Yahoo's stock continued to increase in value throughout the late 1990s and 2000, reaching a split-adjusted high of $237.50 (Angel). In addition, Angel reports that, "Yahoo's stock had jumped 584% in 1998. At the beginning of 1999, its market cap was $23 billion; three months into the year, it had already ballooned to $35 billion" (p. 150). In March 2000, though, the impact of the dot.com bust adversely impacted the company's stock, which was followed by the aforementioned terrorist attacks of September 11, 2001. Taken together, this double whammy represented an enormous adverse impact on the company, particularly since almost half of Yahoo's advertisers at the time were dot.com businesses themselves (Angel).

The company's early leaders brought a variety of leadership styles and traits with them, but Angel emphasizes that despite their fundamental differences in style and philosophy, there was a definite synergy involved and they all tended to mesh well together. As this author points out, "The Yahoo team had a sophisticated, nuanced view of what it takes for a company to stay ahead and an appreciation of the importance of intangibles like image. The [original leadership team] understood that leadership can be both real and perceived. You can still be the perceptual leader of a category" (p. 54). During this early evolutionary period of the Internet and home computers, it is to the company's leadership's credit that they had a vision and took the steps necessary - including no small amounts of monetary investments - to bring their goals to fruition. In this regard, Angel adds that, "They were ahead in enough… READ MORE

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