Internal Branding at Yahoo!, Crafting the Employee Value Proposition

By Aneesha Capur, Charles O'Reilly III, Tim Perlstein
2006 | Case No. HR25B
In 2001, Libby Sartain, Chief People Officer, arrived at Yahoo! to find a demoralized Internet company without a well-defined culture, a coordinated method to communicate with employees, or developed processes, policies and procedures. In Sartain’s first year at Yahoo!, the company was sent reeling by the collapse of the “dot-com bubble.” For the first time in its history as a public company, Yahoo! was forced to lay off a substantial part of its workforce. Predictably, morale at Yahoo! was shaken. Employees who had signed on to a culture based on the “3Fs” – Fast, Fun, and Focused – now had to contend with staff reductions, a suddenly bleak labor market, underwater stock options, and an uncertain corporate future. The final contributing factor to the company’s trouble was uncertainty at the senior executive level. Many of the company’s top officers departed during the turmoil, leaving the newly installed Chairman and CEO, Terry Semel, with an incomplete executive team. Moreover, Semel had yet to articulate his vision and strategy for the company, and the economic landscape was deteriorating. Almost three years had passed since Sartain’s arrival, and the company was definitely not the same. Since 2001 the organization had faced – and overcome – some crucial challenges and, for the moment at least, it seemed the worst was over. Daily page views were up to 2.4 billion (versus 65 million in 1997). Yahoo! websites reached over 274 million unique users in over 25 countries and in 13 languages. And with six major acquisitions since Semel’s arrival as CEO (including high-profile deals with HotJobs, Inktomi, and Overture), the company now employed more than 4,000 people at its Sunnyvale, California headquarters, and 2,000 more overseas. During this period, Sartain had been working hard at launching an internal branding campaign at Yahoo! and transforming the company from its start-up culture to a more traditional organization. This case explores Sartain’s approach to rationalizing a complex and confusing organizational structure and to creating a meaningful value proposition for Yahoo! employees through identifying the company’s unique cultural attributes and developing a cohesive internal brand.
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