Yahoo has evolved its strategic partnership with India over time by shifting from a "People Offshoring" model to a "Product Offshoring" model. The People Offshoring model focused solely on cost savings but resulted in high attrition rates and a lack of accountability. The Project Offshoring model assigned some managerial functions offshore but reporting structures remained unclear. The current Product Offshoring model moves entire product teams to India, including senior leadership, allowing Yahoo to leverage local talent and execute more effectively in local markets while retaining staff. This Center of Excellence approach gives all stakeholders accountability for success.

1. Evolution of a Strategic Partnership with India
Amit Seth
Second Annual Conference on the Globalization of Services
Stanford University

2. Mission
Strategic Data Solutions
Mission
Create value for consumers and
marketers by delivering the
consumer-centric data platform &
insight services that maximize user
engagement and enable innovative
marketing solutions
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3. Yahoo’s Data Reach
• 70% of the US Internet population uses Yahoo!
• Engaging with 100+ properties including mail, news, shopping,
finance, autos, travel, games, movies and health
• Allowing Yahoo to collect more than 4,000 terabytes of
behavioral data
• Yahoo combines this with additional data on 200 million
registered users
• To derive 2000 different interests
• Which provide advertisers with campaign insights and targeting
opportunities
Yahoo! has a daily reach larger than the Super Bowl
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4. Data Platform Overview
>20 TB of data / Day
Data Facts:
~5 Petabytes of data
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5. Strategy of a Partnership

6. The Start and progression …
• July 14, 2003:
“Yahoo Inc. has set up a software development center
in India that will focus on the development of products
and technologies to be deployed by Yahoo's Web sites
worldwide. The center in Bangalore, the first research
and development center set up outside the U.S. by
Sunnyvale, Calif.-based Yahoo, is expected to have 150
engineers by the end of next year. Some product
development work has already begun at the center.”
Year 2003 2004 2005 2006 2007*
Strengt … 100 600 1,000 1,400
h
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7. Data Offshoring Themes
• Large amounts of data is collected from all
around the world, which needs to be
processed 24X7
 Executives like to view their dashboards
when they wake up!
• Processing all of this data for knowledge
discovery poses unprecedented talent
requirements
 … and in large numbers!
• Data Mining tasks involve 80% of the work to
be on data preparation, which could be very
manual
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8. Evolution of Offshoring Models
People Project Product
Offshoring Offshoring Offshoring
Primary Objective: Primary Objective: Primary Objective:
Cost Efficiency Center of Excellence
Strategic Value
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9. Model 1.0: People Offshoring
• We latched on to the fad!
 … purely for cost benefit reasons
• Model was to get work accomplished any
which way …
 … dotted line
 … solid line
 … multiple lines
• Point of contact was lowest to lowest point
• Decision making entity was also at the lowest
point
• Attrition was a major issue
• Cost advantage turned out to be a myth
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10. Model 2.0: Project Offshoring
• Unstructured-ness of 1.0 didn’t facilitate any
accountability
• Plan evolved to let managerial functions also
reside offshore
 … but reporting to project-level hierarchies at HQ
• Functions being outsourced were secondary,
like QA, Operations, Documentation
• Confusion on accountability continued
 … as metrics for success not easy to define and track
• Attrition and morale continued to be issues
 … still not able to retain and attract top talent
• HQ managers revolted!
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11. Model 3.0: Product Offshoring
• People are valued at Yahoo! to the utmost level
 Hiring and retaining good talent is an overarching goal
• Evolution has led to “moving the organization”
• Senior VP at HQ hires/transfers VP to Bangalore
 Transition entire product areas
 Transition all functions – Product Management,
Architecture, Design, Development and QA
• All stakeholders now have skin in the game
• Follow the talent approach allows us to execute in areas
where key local talent can execute for local markets
better – eg. Mobile
IDC has evolved to be a Center of Excellence
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12. Shared Services in 3.0
• Maintain a horizontal services group at
Bangalore
 … focused on making each business unit
engagement successful
• Functional groups provide headcount to shared
services
• Dotted line reporting into Functional heads
• Key shared functions are Research, QA,
Operations, User Experience Design, Tech
Writers
• Follows a process of local escalation with
arbitration provided by center head
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13. Questions?
Amit Seth
aseth at yahoo dot com