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The Importance of Leadership: Yahoo and the Virtual Environment

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The Importance of Leadership: Yahoo and the Virtual Environment

External factors that have enabled the growth of Yahoo

Without a doubt, Yahoo was one of the first companies to take advantage of the new phenomenon of the 1990s - the Internet. The company started as did many other tech companies of those days, with friends working on a hobby. David Filo and Jerry Yang developed Yahoo from something they did to keep track of their favorites into a major company that provides access to hundreds of millions of users every day. Interestingly, what made the technology appealing to Filo and Yang is still what draws people to it today; the fact that it is a directory that catalogues various websites, making them much easier for people to locate when they are needed.

In the early days of the Internet, there was very limited access, not to mention the fact that most people had no idea what was even available there. What Yahoo built upon was the growing desire for individuals to have access to this new technology, as well as the belief that the Internet would continue to experience extraordinary growth as a source for information, news and entertainment. Therefore, the external environment during this time period was one of great expectations in regards to the Internet, which made Yahoo a company that was looked to as a major media force in the future.

Other technology was also being developed during this time that contributed to Yahoo's success, including the first true web browser, Mosaic. That browser, which would lead to the creation of Netscape, was developed by a team directed by Marc Andreessen at the University of Illinois National Center for Supercomputing Applications in the early 1990s (Filo and Yang, 1995). Without a browser, there would be little interest in the Internet, since its information would be relatively inaccessible to the average person. In the early 1990s, the only websites that existed were basically operated by the government or colleges. After the development of a usable browser (Mosaic), this number began to increase rapidly, with the potential being literally limitless. So, what Filo and Yang had been doing in their spare time would soon be able "to provide a contextual framework for this jumbled mass of content" (Filo and Yang, 1995, p.7). In very short time, the world went from not having any need for indexing the Internet, to not only needing one but seeing the development of multiple indexes.

According to Angel (2002), the number of people that were using Yahoo grew dramatically in just a matter of months. While the Internet consisted of a mere dozen or so sites prior to the creation of Mosaic, the numbers rapidly grew to the thousands by September of 1994, and those sites were receiving 50,000 hits per day. By January of the following year, that number had reached one million. The growth of Yahoo was insured when Netscape launched its own browser and included a link to the Yahoo directory on its website. "We simply wanted to make the browser easy for people to use, and Yahoo was the best directory available at the time," explains Mike Homer, then Netscape's vice president of marketing (Angel, 2002, p.27).

Importance of the development of virtual environment, organization and teams to Yahoo

According to one source, virtual teams are "groups of geographically, organizationally and/or time dispersed workers brought together by information and telecommunication technologies to accomplish one or more organisational tasks" (Powell, Piccoli and Blake, 2004, p.7), or groups that effectively work together apart (Grundy, 2004). Organizations that successfully utilize virtual working environments, such as Yahoo, are more effective in competing globally, while providing flexibility to their workforce.

Caulat (2006) reported that one of the most critical factors that defines success in virtual environments "is the development of virtual leaders who are able to develop and lead virtual teams" (2006, p.7). This has certainly been the case at Yahoo, as that company has learned that there is a greater need for leadership, especially in virtual teams, than mere management. With the proper leader in place, the distances between teams or team members can actually become an enabler to success instead of a distraction that could lead to failure. The corporate leadership at Yahoo, especially the Chief Information Officer (CIO) Lars Rabbe, has ensured that the right leadership has been put in place, in addition to possessing the proper skills to accomplish the necessary tasks (Caulat, 2006).

Interestingly, Caulat (2006) also learned that "while most of the literature seems to suggest that for a virtual team to become high performing it is important to have met face-to-face beforehand, we found out that prior face-to-face meeting is actually not necessary" (2006, p.8). In fact, it has been determined that such anonymity could actually prove to be productive, since only the work would be focused on and not any outside distractions or previous perceptions of the individuals on the team. This process has worked well for Yahoo in many of their virtual teams that are located around the globe, since actual meetings are not always practical in the first place. An important feature of virtual teams is that they need to develop their own methods of how to deal with each other; a set of standards and rules of conduct that everyone can agree on (Caulat, 2006).

In a recent interview (Farber, 2006), Lars Rabbe stated that innovation is based upon the ability to allow people to do great things. In particular, he believes that it is vital to provide an environment that enables the creative teams at Yahoo to work in ways that are not typical of what is usually considered day to day work. Much of this process is the result of Yahoo's infrastructure, such as its data centers, organizational structure and social networking. Rabbe insists that the success of Yahoo's virtual teams is based a great deal on their use of many of the same Yahoo products that users around the world have come to know and love, which allows them to remain connected even over vast distances.

Rabbe also included in that interview that the technology that allows the virtual teams to work together "almost instantaneously makes it possible for us to try things, experiment with different ways of doing things and really know very, very fast what works and what doesn't work" (Farber, 2006, p.28). The fact that Yahoo has the ability to work from so many different locations simultaneously has actually increased their ability to innovate, as a lot of ideas that have come out of other markets have proven successful and later applied elsewhere.



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