Banning Flexible Work Options: Yahoo's New Controversial HR Policy
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Case Details:
Case Code: HROB162
Case Length: 14 Pages
Period: 2012-2013
Organization: Yahoo!, Inc.
Pub Date: 2013
Teaching Note: Not Available
Countries: Global
Industry: Information Technology
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Background Note
Yahoo was founded by two PhD. students of Stanford University, Jerry Yang (Yang) and David Filo (Filo), in 1994 in Sunnyvale, California, USA. It was initially started as 'Jerry and David's Guide to the World Wide Web (JDG),' a website which acted as a directory of several other websites. Yang and Filo started the website to cater to the needs of people who wanted to go to a single place and find websites related to diverse areas. Over time, JDG became very popular and became the first choice of people browsing the web to find sites intelligently. It helped people to discover useful, interesting, and entertaining content on the Internet.
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JDG was later renamed Yahoo in 1994 and was positioned as a customized database intended to serve different users. Yang and Filo developed customized software to help users locate, identify, and edit information available on the internet. Yahoo quickly became very popular among internet users and attracted a lot of media attention.
Yahoo was formally incorporated in March 1995 and started implementing a business plan modeled on traditional media companies. Sequoia Capital , a well-known venture capital firm, agreed to fund Yahoo in April 1995, with an initial investment of US$ 2 million. Yahoo generated its revenues mainly through online advertisements, banner ads and ad placement fees, promotions, sponsorships, direct marketing and merchandising. It also generated revenues from monthly hosting fees and commissions on online sales from its merchant partners. These included transaction fees generated from the sale of merchandise on its site. In 1995, Yahoo appointed Timothy A. Koogle (Koogle) as its CEO and strengthened its management team significantly. Koogle was an engineering graduate from Stanford University and had spent nine years in Motorola, Inc. (Motorola) before joining Yahoo. The appointment of Koogle led to the introduction of more innovations in Yahoo. It was the first company to introduce an online navigational guide on the Internet. It also started offering media content, communication, personalized information, and commerce services on its website. In July 1996, Yahoo launched My Yahoo, a personalized web information service. This allowed users to create their personal profile and access information based on their personal interests. Its new services such as Yahoo Address Book, Yahoo Calendar, Yahoo Briefcase, Yahoo Phone Book, and Yahoo Notepad helped users to manage their personal information. In April 1996, Yahoo raised US$ 33.8 million by selling 2.6 million shares through an IPO. The amount raised through the IPO was used to expand its operations significantly...
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