Yahoo! CEO Marissa Mayer @1: where angels fear to tread

Little evidence yet of a true turnaround, but the Yahoo! boss manages to outrun her own critics

Precisely, it has been a year since former Google executive Marissa Mayer took charge of Internet pioneer Yahoo! Inc. Mayer’s appointment was considered a coup for Yahoo!, which struggled to attract top talent in its battle with competitors. Mayer, as Yahoo!’s fifth boss in four years, has proven herself a steady steward so far. On the day her hiring was announced, Mayer posted on Twitter that she would be having a baby. The announcement was a stunner, as Mayer became the first pregnant chief executive officer (CEO) of a Fortune 500 company.

 

According to the Harvard Business Review,  two out of five CEOs fail in their first 18 months on the job. This makes the choice of a chief executive a product of the board’s vision and personalities rather than one of studied research on what characteristics the person needs. The Internet giant witnessed many turbulent times and a series of CEOs failed to reverse the company’s southward slide. The situation reached a nadir earlier last year during a bizarre episode involving former CEO Scott Thompson, who admitted he didn’t have the computer-science degree he listed on his résumé when he got the Yahoo! job. 

 

Undoubtedly, Mayer pumped adrenaline into the corporation. She has revamped many of Yahoo!’s core products, like Flickr, embarked on an ambitious acquisition spree (exactly 17 acquisitions) — including the blockbuster $1.1 billion purchase of Tumblr.  Initially, Mayer faced a plenty of management challenges and the major one was to boost the sagging morale of Yahoo! employees, which ebbed as workers watched four CEOs exit in just as many years. Probably, Mayer has recharged esprit de corps among the Web giant’s long-suffering staff.

 

Yahoo! stocks have risen more than 70% in the 12 months since Mayer was appointed as its CEO. Financial analysts are of the view that much of the gain has come from stock buybacks and from Yahoo!'s Asian assets, including a 24% stake in Chinese e-commerce giant and potential IPO debutante Alibaba Group. Alibaba is one of the world's fastest growing Internet companies with revenue last year of $1.8 billion, an 80% raise from 2011. Alibaba's earnings more than doubled last year to $642 million.

 

At present, Mayer's strategy is to put product improvements ahead of the need to win over advertisers, which will finally decide whether Yahoo!’s revenue grows or shrinks. The IT company's $20 billion market capitalization is tied to its investments in Asian Internet firms. During Tuesday's post-earnings conference call with analysts, Mayer said the company was bullish on its advertising technology and that it planned to focus on improving various aspects of it in the coming quarters.

 

Yahoo!'s share of the $117 billion global market for digital-ad spending will be 3.1% this year, down from 3.4% in 2012, according to projections by research firm eMarketer Inc.

 

As Google and Facebook have emerged as Web giants, Yahoo! struggled to design a distinct strategy to regain its lost glory. However, Mayer spent a lot of time and money to improve the company’s content offerings, such as news, sports, fashion, finance and lifestyle, and she’s made improving the user experience of Yahoo!’s e-mail and instant-messaging products a top priority.  Yahoo! refurbished Flickr photo-sharing service, which had deteriorated during years of neglect. Yahoo!’s key services, such as e-mail and search, have lost share to rivals while even strong properties such as sports faces stiff competition from ESPN and other websites.

 

In the mobile space, Yahoo! lags its competitors in most of the major content categories and the  company needs to address its user offerings in these verticals.  According to reports, the mobile space has been a litmus test, unlike rivals Apple and Google, Yahoo! doesn’t have a mobile operating system, a mobile browser or a mobile device of its own.

 

Mayer, 38, repeatedly addressed another major challenge for Yahoo! — that it’s primarily domestic. She cited the United Kingdom and Germany as markets where the company needs to get stronger.  The Yahoo! boss has said several times that the organisation should be focusing on engagement. Higher engagement means Yahoo! can sell more expensive advertisements. The combination of Tumblr and Yahoo! is likely to grow Yahoo!’s audience to more than one billion monthly visitors.

Here are her five biggest moments since joining the company
. Mayer introduced a sweeping change in Yahoo!’s work culture. She banned Yahoo! employees from working from home. The company said it was sacrificing speed and quality by allowing some to work from home.  Sheryl Sandberg, the chief operating officer of Facebook, defended Mayer, who drew opprobrium for putting a stop to home working.

.  The corporation acquired 17 companies since Mayer arrived. Among them was the $30-million purchase of Summly, a startup by 17-year-old entrepreneur Nick D’Aloisio that automatically created summaries of news articles.

.  Mayer's biggest move in her first year came in May when Yahoo! doled out $1.1 billion to buy Tumblr. The New York–based social-blogging platform is extremely popular with young urbanites, particularly in the age group of 18-to-24.  The deal was aimed at bringing new talent to the venerable web portal.

. The former Google executive has led an overhaul of many of Yahoo!’s most important properties, including email, a much-lauded weather app for iPhones and Flickr. Yahoo! redid Flickr's home page and announced it would give users 1 terabyte of storage space.

. Mayer hired designer Marissa Louie, a former Apple employee, and perhaps most notably, she hired away Henrique De Castro, Google's top sales executive, from her former company in October.