Marissa Mayer may be what Yahoo truly needs in a CEO to turn the company around. Or she can be another CEO casualty waiting to happen.
There’s no question Yahoo is facing many grim challenges – and Mayer as the new leader has to prove she can meet them. Perhaps the most glaring challenge staring Mayer in the face is that she is the fifth CEO at the company in five years – not including a couple of interims. Not a great track record.
On top of that, it’s not so clear what the Yahoo brand stands for, according to news reports. Nor is it clear whether Yahoo is a technology company or a media company.
Its quarterly results could be better, too. This week, Yahoo announced that its quarterly revenue and net income basically remained where they were last year. Revenue was $1.22 billion. Quarterly net income dropped 4.2 percent from the same quarter a year earlier, to $228.5 million.
But Mayer is a respected name in the highly competitive technology sector. Mayer was responsible for search engine, Gmail and Google (News - Alert) Maps – while at Google. That’s an impressive background. “She was responsible for much of Google's development over the last decade and beyond,” comments TechZone360’s Steve Anderson.
“Bringing in Marissa Mayer gets people’s attention,” David Hallerman, an analyst at eMarketer (News - Alert), recently told The New York Times. “The sheer attention that they are getting because of hiring her will be helpful for a while.”
On the bright side, Yahoo has 700 million users – an impressive number. Yahoo e-mail, Sports, Finance and Flickr are relatively successful. A new offering, Genome, Yahoo’s digital advertising product, gives advertisers data about users.
But many of Yahoo’s advertisers are looking at Facebook (News - Alert). Google is strong in mobile advertising, too – and Yahoo would like some of that strength.
“Yahoo has a very healthy search advertising and display advertising business,” Mayer said. “I’m interested in what Yahoo can do with video and mobile, both of which are very promising.” In addition, the recent interim CEO, Ross Levinsohn – who was considered a top candidate for the permanent post – has specialization in media, and Mayer knows about development and design of products. It remains to be seen if they can collaborate.
But there are some dismal predictions for Yahoo, as well. Reuters’ (News - Alert) Kevin Kelleher argues in a recent blog post, “Yahoo can’t be saved.”
“Yahoo eats CEOs,” he proclaims. “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.”
“As welcome as a Yahoo revival would be.” Kelleher adds, “The odds of it happening are simply against it, regardless of who is in charge.”
Looking ahead, Maribel Lopez (News - Alert) comments “Mayer’s job isn’t to create better search for mobile. Her challenge is to turn the company into an experience provider that integrates broadly across content and services.” She needs to “reinvigorate” current employees; get some talented new staff; satisfy Wall Street, which wants decent quarterly returns; and come up with something that is relevant and new.
“Analysts and shareholders — desperate for signs of life from the moribund company — are eager to see whether Ms. Mayer … can lure back advertisers, reinvigorate a muddled brand and improve morale at a company marred by executive churn, constant cost-cutting initiatives and mass layoffs,” The New York Times concludes.