theworldismine13
God Emperor of SOHH
The Last Days Of Marissa Mayer?
The Last Days Of Marissa Mayer?
The Last Days Of Marissa Mayer?
The late October offsite meeting for more than 120 of Yahoo YHOO +3.03%’s top executives at the Park Central Hotel in San Francisco started well enough. The first day jumped from strategy sessions to upcoming product discussions. But on day two, when the topic shifted to employee engagement, and with CEO Marissa Mayer in and out of the room, things went downhill fast. When Bryan Power, Yahoo’s head of h.r., glossed over results from a recent employee survey that showed dramatic double-digit drops in metrics like morale and trust in the company’s executive leadership, various vice presidents began venting to one another. Those murmurs of discontent erupted into outright heckling when another session—billed as an opportunity to improve communication—turned into a lecture from Yahoo’s top brass that many found patronizing. Vice presidents started calling out their superiors for “not listening,” “not understanding” and “not being interested in changing.” Some cursed.
“It was the most stressful and acrimonious professional meeting I’ve ever attended,” says one participant.
Such is the state of affairs at Yahoo these days. More than three years after Mayer was brought in to turn things around, the original Internet media giant is still failing at its core business and getting whipped not only by Google GOOGL +2.32% and Facebook FB +0.93% but also by newer entrants such as Instagram, Snapchat and even the beleaguered Twitter TWTR +0.00%. In the most recent quarter its net revenue declined 8% and search revenue, a priority of Mayer’s, declined 13%. Overall traffic has continued to inch downward, and none of its new mobile apps has yielded new users or revenue on the scale Yahoo needs to offset the declines. The stock market has rendered its assessment: Yahoo, which has a market value of $31 billion, owns a $30 billion stake in Alibaba, an $8 billion stake in Yahoo Japan and has $5.5 billion in cash net of debt. While investors often apply discounts to the company’s Asian assets to account for possible taxes and other risks related to their eventual spin off, in many models Yahoo’s core business – with $4 billion in revenue and 10,700 employees – has an implied valuation of less than zero.
Mayer inherited a tough situation. The very idea of an Internet portal—a Yahoo or an AOL—is a relic of a Web era 15 years ago when advertisers were willing to pay dearly for a massive home page audience that could direct millions on to a plethora of services like Mail, News, Sports, Finance, Autos and Search. That model doesn’t compute in the mobile era, where apps and social networks dominate.
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But Mayer, a star at Google, was supposed to be smart enough to figure a way out. The knives are now unsheathed. FORBES spoke with more than a dozen current and former executives who requested anonymity to discuss confidential matters, and most say a confused strategy and mismanagement, specifically from Mayer, has undermined any attempts at a turnaround. Yes, she originally brought hope, a badly needed focus on products and a keen understanding of technology. But as pressure to deliver results has mounted, there’s widespread belief, as reflected in that employee survey, that she’s no longer up to the task. The past few months have seen a mass exodus, as Mayer lost her chief accounting officer, chief marketing officer, chief development officer, a string of senior vice presidents and an alarming number of vice presidents from across the company in product, engineering, sales and human resources, with more defections to come. Some former executives FORBES spoke with jumped to gigs they saw as more promising, but several said they left out of exasperation with Mayer. “I am so frustrated and upset that so many people’s hard work is just getting destroyed,” says one recent defector.
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Mayer, through a spokeswoman, declined to speak with FORBES for this story. Yahoo declined to comment. At a business conference in San Francisco this month she admitted that there was “more to do” as part of her turnaround but said, “One of the things I’m really proud of is that we have built a future” for Yahoo. Two weeks earlier she told Wall Street analysts during an earnings call that Yahoo has “the right talent, the right strategy and the right assets to deliver long-term sustainable growth for our investors.” Addressing the defections, she said: “The design and changes in Yahoo’s leadership team are the result of careful planning to achieve the necessary skills, passion and ability to execute growth in our business. Our leadership team today is unequivocally the strongest during my tenure.”
The executives FORBES spoke with dispute that the resignations had much at all to do with “careful planning.” And some increasingly wonder among themselves how long it will be before Mayer joins the ranks of ex-Yahoos.
WHEN, EXACTLY, MAYER’S tenure began heading sideways is difficult to pinpoint. Her hiring in July 2012 was hailed as a coup. Yahoo had just gone through five CEOs in five years, and the last one lied on his résumé. Mayer was a rock star—the steward of Google’s search engine and spartan home page—an engineer with a reputation for data-driven decision making and a golden touch with consumers. She was Google’s 20th hire and had spent years in its inner circle. Employees at Yahoo’s Sunnyvale headquarters greeted her with handmade Mayer portraits in the style of Obama’s 2008 “Hope” ads.
Mayer put a focus on mobile, an area Yahoo had badly neglected. She talked of sprucing up Yahoo franchises that were “daily digital habits,” like e-mail, search, finance and sports. Growth, she told Wall Street, would be a “given.” Talent began joining the company, some of it through a steady stream of acquisitions of small companies, many in mobile business. Mayer also made some bolder bets, most notably the $1.1 billion acquisition of Tumblr in May 2013, a fast-growing blogging and social networking platform. That she was able to complete the deal, when her predecessors had missed out on promising startups like Facebook and Twitter, was itself seen as a victory.
Mayer also made flashy media investments, hiring Katie Couric to be Yahoo’s global anchor in November 2013 and bringing on a string of high-profile journalists to create digital “magazines” focused on tech, health and fashion. She invested in original video series to battle the likes of Netflix and Amazon and sought to claw her way back into the search business, which Yahoo had largely outsourced to Microsoft. With Yahoo’s traditional display ad businesses in decline, Mayer began to define the future of the company around a handful of areas: mobile, video, native advertising and social, eventually coming up with the acronym “MaVeNS” to encapsulate her efforts. Plenty of Yahoos, especially those whose projects thrived, became Mayer fans. “She’s the best leader we’ve had,” says Marco Wirasinghe, who was at Yahoo from 2010 to this summer and led the development of Yahoo Weather, an app Mayer frequently lauds as a notable hit.
Not everyone saw it that way. Some of her most senior executives say the data-driven approach she honed at Google seemed to give way to snap judgments. Early in her tenure she demanded that a landing page ad on Yahoo Mail be removed simply because she didn’t like the user experience. Executives pushed back, noting the ad brought in roughly $70 million annually, to no avail. “She knew she didn’t like it, but there was no thinking about the impact,” says a former executive. Similarly, Mayer insisted on introducing a new ad product during a keynote speech at the Consumer Electronics Show in Las Vegas in January 2014. The team responsible for the product, Yahoo Ad Manager, insisted it wasn’t ready, but it was pushed on a small set of advertisers with disastrous results: Only about two in ten campaigns outperformed an earlier system, and Yahoo had to pull the product while the team fixed it.
They need to start copying google on everything if they want to survive.
Touché.