MediaFile

Mayer can’t save Yahoo – because Yahoo can’t be saved

By Kevin Kelleher
July 18, 2012

Yahoo eats CEOs. The perennially ailing company lures talented managers into the corner suite of its Silicon Valley headquarters, then it sucks their good reputations out of their veins and casts them aside. They inevitably pass through the revolving door an empty shell of their former selves.

Terry Semel, Jerry Yang, Carol Bartz, Scott Thompson. All took the CEO helm with visions of invigorating Yahoo into an Internet leader for the 21st century. Most became mired in Yahoo’s stubbornly byzantine culture. And all probably collected their severance checks wishing to themselves they’d never heard of the company with its stupid hillbilly name and its superfluous punctuation mark.*

Now it’s Marissa Mayer’s turn. Mayer – an early Google hire who instrumentally forged its successes in search, maps and online email – has become such a positive, likable presence in Silicon Valley that I actually felt sorry for her when I heard it was her time to be Yahoo’s help. A failed tenure as Yahoo’s CEO couldn’t happen to a better-qualified candidate.

Mayer’s appointment was something of a bombshell – many people expected Yahoo would appoint Ross Levinsohn, a seasoned ex-News Corp executive, as CEO. In the Internet industry of 2012, the gambit boils down to advertising versus engineering – which is to say, vision versus monetization. Any good Web company wants the sweet spot that welcomes both. With Levinsohn, Yahoo would have got an ad guy to oversee a product that is largely computer code. With Mayer, Yahoo gets an engineer with executive experience.

Three years ago, Mayer signaled that she was ready for a new company. Mayer, famously, was responsible early on for the invitingly spartan homepage of Google.com. Later she had a hand in core features like Gmail, Google News and Image Search. During her five years as vice-president for Google’s search and user experience, she oversaw some of the company’s biggest projects, balancing the site’s intuitive interface with the need to generate more ad revenue from it.

In recent years, her trajectory seemed to lose energy. Nearly two years ago, Mayer made a move seen by some as a demotion. She was sidelined from search into local initiatives. At the time, local was key to Google’s push into the mobile web, but it also became an area where Google lost ground to Facebook, Groupon, Yelp and others.

Remember Google Local? How about Hotpot? Did you love location-based features like Latitude? No? Maybe it’s because nobody else did. Under Mayer’s hand, Google never cracked the local web. Last year, CEO Larry Page pushed hard into social media with Google+, an initiative that seemed to sideline local. And now Google Maps is losing its default place on new iPhones.

A year ago, Mayer was bypassed when Jeff Huber was named senior vice-president for local business, previously Mayer’s turf. Again, observers wondered why Mayer wasn’t chosen. Despite being a public face of the company, Mayer wasn’t counted among the company’s top executives on the company’s corporate page, even before her departure was announced.

One can read into this recent history that Mayer lacks the chops to be a CEO, that she’s just bolting to maintain her reputation. Or one could look at her 13 years at Google and see she’s exactly what Yahoo needs. Both of these views are being voiced – but the people who worked alongside her at Google are her loudest supporters. They say she’s smarthardworking and capable.

There is no shortage of voices among former co-workers and colleagues who believe Mayer has it in her to be a capable, if prickly, CEO. Many believe she is just what Yahoo needs. But as welcome as a Yahoo revival would be – and the tepid earnings results Yahoo posted Tuesday show how far it needs to go – the odds of it happening are simply against it, regardless of who is in charge.

Corporate turnarounds are painful, ungainly and notoriously difficult things to pull off. When they work, they take years and they usually happen in older, commodified industries. On the Web, things change so quickly and competition is so intense that Yahoo can’t afford a few years to right itself. Other Web companies, like MySpace and AOL have repeatedly tried to turn things around with no luck.

And there is a lot at Yahoo to turn around. The company has never had a coherent business strategy. It could never decide whether it was a media company or a technology company. In the glory days of 10 or 15 years ago, Yahoo thrived almost by sheer luck, setting up features like mail, news and financial data that resonated with the Web’s early audience. But that piecemeal strategy endures today to Yahoo’s harm. Google’s mission is to organize information. Facebook’s is to connect people. And Yahoo? It’s a site collecting a bunch of aging Web features.

If Mayer can bring Yahoo a distinct and appealing mission, she’ll face other daunting tasks: remaking a corporate culture that smothers promising sites like Flickr into oblivion; building a search asset that doesn’t rely on Microsoft’s Bing; and above all, giving Yahoo a strong presence on mobile devices. If Facebook is struggling on this front, what chance does Yahoo have?

All of this will need to happen in a year or two, because by then the rules of what works on the Web will be rewritten all over again. Mayer can buy innovative startups to put Yahoo back on the cutting edge, but it may mean entering bidding wars with Google and Facebook. Yahoo has $2 billion in cash, while Facebook has around $20 billion, Google $50 billion and Microsoft $60 billion.

And Mayer will also need to contend with a vocal activist investor on its board, one insisting on profit growth. Web giants like Facebook and Google grow by being willing to invest in risky projects, but Mayer’s hands may be tied by the board’s insistence on short-term growth.

Mayer has a lot to bring Yahoo. Her reputation will likely inject Yahoo with a new vigor, stem the exodus of Yahoo engineers and help the company hire new talent. But there will be challenges, too. Her experience at Google search may not be much help at a company that gave up its search engine. Her experience at Google Local doesn’t show a track record of success on the mobile web. And as Mathew Ingram pointed out, Yahoo has become much more of a media company than a technology company in the past few years.

A Google veteran like Mayer could have easily raised capital to found a promising startup. Or she could have jumped to a higher title at a Google rival. But signing up as CEO of Yahoo? A company with a fraction of the cash that Google has? Either Mayer has some plan to save Yahoo nobody has thought of, or… well, welcome to the maw, Marissa Mayer.

*CORRECTION: Due to a technical error, the piece originally incorrectly referred to Yahoo’s “superfluous question mark.” It is an exclamation mark.

PHOTO: Marissa Mayer, vice-president for search products and user experience at Google Inc, unveils “Google Instant” during a news conference in San Francisco, September 8, 2010.  REUTERS/Robert Galbraith

Comments
25 comments so far | RSS Comments RSS

“….its stupid hillbilly name and its superfluous question mark.”

You’re ripping on yahoo when you don’t know the difference between a question mark and an exclamation point? I find that humorous.

By the way, yahoo news traffic crushes reuters news traffic.

Posted by Temeku | Report as abusive
 

She is charming, she knows how to flirt with executives, she gets her way, She is fashion Barbie girl of internet industry.

She is NOT a business leader She never ran a business. She was a tactical leader. Yahoo is nuts to hire somebody like that out of millions of smart business leaders in internet industry.

Posted by Humanity4All | Report as abusive
 

punctuation mark.*

*CORRECTION: Due to a technical error, the piece originally incorrectly referred to Yahoo’s “superfluous question mark.” It is an exclamation mark.

Hahahahahahaha….!!!!

You know, I like Yahoo!. I play Fantasy Sports there. Check the movie times, buy tickets, email (use it more than Gmail – which I never use). Use the email integration on my Andriod. I even bought some Phillies t-shirts there. I read the articles (well really scan the headlines – but read them occasionally too). I check the weather there, Yahoo is very good at the things I use it for.

Love the Fabio cooking show Chow/Ciao or something and I just watched the Tom Hanks TV show about the dystopian future.

In fact, I use it for lots of things except searching, for that I use Google. Oh, that and checking spelling on Google too.

I do, however, 99% of my shopping on Amazon.

Just my 2 cents.

Yahoo. Is a “content” place for me.

Posted by Lord_Foxdrake | Report as abusive
 

She is hot

Posted by Shukla | Report as abusive
 

After thinking about it. Yahoo can indeed be saved, just not as a technology company.

Apple was turned around because it moved itself into the business for the pop culture. The iPod as the cornerstone for Apple serves the music part of the pop culture.

From there, they went on to focus more on the arts and design of their products to increase revenue tapping further into the ever growing base of pop culture consumers.

Mayer can do the same thing with Yahoo, turning the web site into some sort of arts and fashion hub attracting the pop culture base to increase traffic. From there they can do anything from selling live concert event tickets, to arts and gallery exhibition. Ok I admit I don’t know the details but just focus on the pop culture, with good execution you will make lot of money :D

Posted by trevorh | Report as abusive
 

@ Temeku: “By the way, yahoo news traffic crushes reuters news traffic”

That may be, but just look at the Yahoo! news headlines now. It’s all tabloid, T.V. celebrity entertainment stuff.

Posted by Calfri | Report as abusive
 

Maybe you’re forgetting compsnies that couldn’t be saved like Apple? Just because others have tried and failed doesn’t mean it can’t be done.

Posted by KurdtCobain | Report as abusive
 

Those who can, do. Those who can’t evidently become reporters at Reuters.

Posted by DeSwiss | Report as abusive
 

Look pal! I think you should give the good lady a chance before predicting doom and gloom for her and Yahoo. I just don’t get it, the media appears to want to kill off Yahoo and RIM with loads of bad press, but these companies are far from dead. Let Madame Mayer try first, before you write her off!

Posted by WiseOldElf | Report as abusive
 

Yahoo alone provides a long term trustworthy and dependable data base for the storage of emails, email attachments and contacts.

I have had a Yahoo business email for the last 10 years.

Yahoo is always available and remains my trusted database.

Through Yahoo, I can still access, search and sort all of my data even though it might be 10 years old.

Yahoo has never threatened that access or leveraged Yahoo’s control over my data to force me to pay additional fees or join new services.

By contrast, Microsoft is continually retiring data bases, such as myphone, winmo 6.5, Yahoo Sync, etc. often simply to leverage its control over my database to purchase new products or services.

Microsoft Outlook has forced me by retiring Yahoo sync)to use a hotmail account through Outlook Connector), but I intentionally bcc all emails through Yahoo, so I retain that trusted resource and am not held at the mercy of Microsoft controlling my data base.

That dependability and reliability is invaluable in my mind. It is the reason Yahoo retains such a loyal long term following.

Posted by wsheridan | Report as abusive
 

Yahoo is just not really relevant anymore at least to me. They still have a lot users and for people of Taiwan, HK and Iran Yahoo is still número UNO. I have plenty of friends (6 to be exact) working at Yahoo but it has been years since I use any of their service beside the default weather app on my iPhone.

For me if I want news I got my news aggregator app or google news. I use google rss reader a lot to keep updated on what’s relevant to me. Ever since Yahoo turned down MS they have just been going down hill. Yahoo still have a strong brand among web users but that strength is related to services that I no longer use.

Posted by MegaChan | Report as abusive
 

If you describe news as “gross pic from Burger King,” or “Rosie buys posh love nest,” then yes, Yahoo “crushes” Reuters.

Posted by Kelsbells | Report as abusive
 

I have a Yahoo e-mail account for various reasons, so when I log in to check mail, I read Yahoo “news” to watch LeBron James make an incredible basketball shot, or find out why Elton John and Billy Joel aren’t talking to each other.
But to say I get my real news from Yahoo is laughable. That’s what Reuters is for. Unless Yahoo changes it’s business profile, it will always be an alternative to TMZ or other gossip sites. In that case, it can’t compete and is doomed to fail.

Posted by Kelsbells | Report as abusive
 

@Lord_Foxdrake
You sort of lost me at the whole extended haha thing, which I thought everyone saw as tired about four years ago. Two cents, however, sounds about right.

Posted by kpkelleher | Report as abusive
 

@Humanity4All
I disagree. She is potentially a good business leader. My argument is her talents are wasted at Yahoo. Yes, charm is a part of any CEO’s role, but that has nothing to do with gender. As for flirting, Mayer has succeeded by her skill. A good Internet CEO is a rare thing. Mayer could well be one (just not at Yahoo), but her “flirting” will have nothing to do with it. Her mind will make or break her as a company’s leader.

Posted by kpkelleher | Report as abusive
 

@Calfri
Agreed. Where is the spartan interface when you need it?

Posted by kpkelleher | Report as abusive
 

@ DeSwiss
You seem to be missing a verb in your first sentence there. Perhaps you meant, “those who can run a company into the ground?” In that case, I agree with you.

Posted by kpkelleher | Report as abusive
 

@ WiseOldElf
I am not writing her off. I am writing Yahoo off.

Posted by kpkelleher | Report as abusive
 

Yahoo would have been better off doing like every other company – have an old man CEO with a hot secretary.
She will have her baby and it will become infinitely more important to her than her job.

Posted by Inkubus | Report as abusive
 

@kpkelleher

Jeese, get a life dude. I like Yahoo!

Posted by Lord_Foxdrake | Report as abusive
 

Yahoo crushes Reuters news flow because that’s their business. If Yahoo doesn’t get hits it makes no $$. Reuters business is charging $1000s per month for instant ticker and intl news terminals to finance companies – their web traffic is a tertiary profit centre (ie it doesn’t make money.) Reuters also has a big reporting bureau; Yahoo has a big sports reporting bureau. What does the average American read more of?

Posted by CDN_Rebel | Report as abusive
 

I don’t like Yahoo. The majority of the news reports are somewhat useless, others are just plain innaccurate. Also, the interface isn’t the greatest, and the pages are swarmed with ads.

Posted by Rex_Sevchenko | Report as abusive
 

Ok, I might be bit harsh on the tech world obsession on design and look, but something needs to be addressed soon.

The trend I see right now is that more and more smart engineers are doing front-end work, some are doing less front-end like database and day-to-day operations (eg improve speed and responsiveness), but these are tasks for what I call the “establishment tasks” gearing toward the execution experts or Peter Thiel called extensive innovation.

If this trend continues, sooner or later more good people will be sucked into these things. The same way finance is taking in a lot of smart people.

At the same time these “establishment tasks” need to be patched on some fundamentally new idea, the base. They can’t survive on their own.

The fundamentally new ideas (eg Siri) are very difficult ground-breaking work with very high failure rate. This requires nothing but the best talent to spearhead. Again Peter Thiel called this “intensive innovation”.

If we continue rewarding and encouraging “extensive innovation” and the “execution experts” too much like right now. We will both run of the low hanging fruit as well as the smart guys who are capable AND willing to try reaching higher.

Just my .. dime.

Posted by trevorh | Report as abusive
 

I don’t know whether Mayer can get the job done or not. I believe, however, that for anyone to turn that boat around they will have to get the company to begin treating their users like customers and not just so many eyeballs.

Got a problem with Yahoo! email? Yahoo! maps? How quickly can you get a response, let alone a satisfactory answer, from their customer service. Better question: where IS their customer service?

As long as they believe it’s only about selling ad space, they’re going to continue to deteriorate. You roll the product out first, THEN people shell out money for it. There’s not a whole lot of product out there any more.

Posted by ChicagoFats | Report as abusive
 

WiseOldElf is, well, wise …

In a time where relevance is being redefined, give Yahoo, Ms. Meyer, and the Yahoo team a chance. Google is beginning to see all of its domain challenged … advert revenue could decline/erode in a fashion similar to Google Maps on iPhone. Then what? Will Android solutions keep the company afloat without a cohesive user experience across all devices used? Perhaps Ms. Meyer recognizes what Google leadership and others do not …

Posted by tomwinans | Report as abusive
 

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