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'We Can Deliver Customers on a Global Basis'

By: Alex MarkelsWed Dec 19, 2007 at 12:23 AM
The Internet is reshaping business and communications around the globe. Now it's up to e-vangelists like Yahoo!'s Heather Killen to build truly global internet companies. Her mantra: no more 'international!'

Yahoo! didn't always have such an advantage. When Killen arrived there in 1996, the company had only three sites: the mother ship, Yahoo! Canada, and Yahoo! Japan. And although the company's leaders knew that they wanted to capitalize on the Internet's global reach, the money and the bodies needed to build new Yahoo! sites around the world were in short supply. So they did what many of their competitors have since done: They negotiated a joint partnership in one country and a licensing agreement in another, which helped provide both the money and the resources necessary to establish a presence quickly in those countries. In a world in which being first to market is considered vital to success, such moves were certainly expedient. But those partnerships ultimately did little to help foster the kind of tight global network that Killen and her colleagues hoped to create. So as Yahoo!'s currency began to rise, company officials decided instead to invest the capital and the resources necessary to own each new property outright.

That decision has made a huge difference. Not only did it aid the effort to build a unified technical and commercial platform, but it also bolstered Killen's attempt to create the closely integrated organization that she had envisioned. "Now no one ever thinks twice about how much support to give that new site in Bulgaria or wherever," she tells the recruits gathered in the conference room. "That's because they are us! The whole network is us. So we have a vested interest in making every one of those operations successful."

That's true now more than ever. Although Yahoo!'s U.S. site still accounts for about 60% of its total network audience, that share is declining as the rest of the world logs onto the Internet and discovers Yahoo!'s international sites. Revenue from international operations now makes up about 14% of the company's total. And because most of Yahoo!'s international properties are now owned outright, they contribute directly to the company's income statement. "If you only own half of an international property, you can't include the revenue from that operation on your earnings statement," Killen explains to the newcomers. "So I don't think the financial analysts would like it if we took 14% off our top line away. They would be bummed. And so would you!"

Of course, the flip side is that Yahoo! must build and finance its new properties while it continues its streak of 16 profitable quarters in a row. "That means we have to do a lot with a little," Killen explains. "We do that by scaling the technology and by really networking the organization. That's why we have lots of folks here in Santa Clara who spend all or some of their time thinking about global issues and supporting our non-U.S. operations."

That doesn't mean Killen oversees a big staff at Yahoo! headquarters. On the contrary, she tries to have as few direct reports in Santa Clara as possible. Instead of building a staff of managers to oversee international marketing, engineering, or legal, she is pushing to place people with those responsibilities in other parts of the organization. "Our director of international marketing reports to the vice president of marketing. Our international lawyers report to our general counsel. And it's the same thing across other business functions," explains Killen. "I work very closely with those people, but I'm not their boss."

The upshot is an international outlook that's embedded in every part of the company. "By building capabilities to support non-U.S. operations into other people's departments instead of her own, Heather has turned us into a global company, not just a U.S. company with international operations," says Yang. "So whether it's production or marketing or whatever, international isn't just an afterthought -- it's part of the planning from day one."

Alex Markels (alexm@email.com), a former Wall Street Journalstaff writer, contributes frequently to Fast Company. Contact Heather Killen by email (hkillen@yahoo.com).

Sidebar: What's Fast

For Heather Killen, senior VP of international operations at Yahoo! Inc., the whole world is a stage. And it's her role to keep one of the Internet's best-known companies a leading player on that stage. Here is Killen's script for building a global Internet company.

Organize your company like the Internet itself.

That is, maintain a set of tight "technical" standards, but allow local operations to be distributed, disaggregated, and democratic. "What I've seen in other 'international' organizations is that they try to create a department that's a miniversion of the larger company," says Killen. "But that's the best way to isolate yourself. You've tried to build an empire instead of a culture."

Keep sites simple, and similar, around the world.

From Issue 40 | October 2000

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