How Marissa Mayer Failed to Turn Yahoo Around

https://variety.com/2016/digital/features/marissa-mayer-yahoo-ceo-1201781310/

by bane • 10 years ago

115 130 10 years ago

erez• 10 years ago

"The Yahoo way is, ‘We’ll throw 10 rocks against the wall, and maybe one of them will hit the bull’s-eye. But you need a sniper rifle in this business."

That's a load of crap. If anything, 'this business' showed us what you need to do is grow to a level where you can throw not 10, but 100 rocks against the wall, and once one of them hits, get another 4 dozens and hurl them at the same spot immediately.

2close4comfort• 10 years ago

Just goes to show that even if you did work/worked at Google you are really no better than anyone else...and planning on that to bring your business around may not actually be a plan.

colmvp• 10 years ago

Reminds me a little bit of Ron Johnson of Apple with JC Penney.

whamlastxmas• 10 years ago

That's sort of a non sequitur. Maybe Meyer did better at holding Yahoo together than any of her non-Google competitors for the same role would have done. And a sample size of 1 isn't really anything to draw conclusions from in terms of the capabilities of ex Google employees.

ZanyProgrammer2• 10 years ago

I'm not sure what Meyer brought to the table that non ex Googlers don't have, other than a general reputation for being successful uber geniuses. Which in this case did jack and shit for Yahoo, though they coasted along on her celebrity for a while.

amelius• 10 years ago

I think we should introduce a law that says that if a company does no better than random rock throwing, its net result should be at most zero.

lintiness4• 10 years ago

she parlayed not being any better into quite a payday. give the girl some props!

Jtsummers2• 10 years ago

If anything, 'this business' showed us what you need to do is grow to a level where you can throw not 10, but 100 rocks against the wall, and once one of them hits, get another 4 dozens and hurl them at the same spot immediately.

Isn't this pretty much what Google does? Outside their core areas of search and advertisement, they try numerous projects until something gains friction. When something does, they work on variations on the theme (to their detriment perhaps, see their numerous chat offerings now). If it doesn't, or it isn't profitable, they scrap it.

bryanlarsen3• 10 years ago

The interesting question: is that what Apple does too? Where "hitting" is defined as "Tim Cook thinks it would be good enough for Steve Jobs".

wmeredith• 10 years ago

What fascinates me about Google is literally nothing else has stuck to the wall and they've thrown a LOT of rocks. Selling ads against search, the initial hit, still accounts for over 90% of their revenue.

theandrewbailey• 10 years ago

When something does, they work on variations on the theme (to their detriment perhaps, see their numerous chat offerings now). If it doesn't, or it isn't profitable, they scrap it.

Even if it does gain traction, they'll do it for a little while, then kill it anyway. And make another messaging platform/app.

samfisher832• 10 years ago

Look at google and all their various endeavors. How many of them are all that profitable. Their primary revenue generator is search/advertising. Android which is super successful is to ensure people use google search.

How much money does youtube really make compared to search. The profit margin is not anywhere close to their search ad business.

imaginenore• 10 years ago

"Android which is super successful is to ensure people use google search" - WAT? I use Android all the time, and at no point Google pushes me to use their search. It's an app platform, and it primarily makes money through paid apps and ads/paid features inside the apps.

frade33• 10 years ago

They are utterly 'irrelevant' i don't care if they make money or not. but they are barely relevant. and this is actually worse than dying. They are everywhere yet nowhere.

What exactly Yahoo is, can someone explain LIM5. and who their target customers are consumer or corporate???

I am not talking their subsidiaries, just Yahoo. Alibaba is cool, but that's not enough.

They are not even trying at anything. They are not even exploring anything.

All I can say, they can do better than this.

ramy_d• 10 years ago

What exactly Yahoo is, can someone explain LIM5. and who their target customers are consumer or corporate???

Not commenting on the general sentiment of what you wrote but I think that's a tough question even in the context of a successful business like google.

Grue3• 10 years ago

Exactly, this kind of comment might as well have been written about Berkshire Hathaway. Who are they? What do they even do? Down with that false prophet Warren Buffett! /sarcasm

roymurdock• 10 years ago

Yahoo! Inc., together with its consolidated subsidiaries (“Yahoo,” the “Company,” “we,” or “us”), is a guide to digital information discovery, focused on informing, connecting, and entertaining our users through our search, communications, and digital content products. By creating highly personalized experiences, we help users discover the information that matters most to them around the world—on mobile or desktop.

We create value for advertisers with a streamlined, simple advertising technology stack that leverages Yahoo’s data, content, and technology to connect advertisers with their target audiences. Advertisers can build their businesses through advertisements targeted to audiences on our online properties and services (“Yahoo Properties”) and a distribution network of third-party entities (“Affiliates”) who integrate our advertising offerings into their websites or other offerings (“Affiliate sites”). Our revenue is generated principally from display and search advertising.

We are proud of our rich history that has evolved with the Internet, beginning in 1994 when our founders, Jerry Yang and David Filo, then graduate students at Stanford University, created Jerry and Dave’s Guide to the World Wide Web, a simple directory of websites to help people navigate the Internet. Yahoo was incorporated in 1995 and is a Delaware corporation. We completed our initial public offering on April 12, 1996, and our stock is listed on the NASDAQ Global Select Market under the symbol “YHOO.” Yahoo is a global company headquartered in Sunnyvale, California.

Seek and ye shall find: http://files.shareholder.com/downloads/YHOO/2121517153x0x893...

lintiness4• 10 years ago

$117M over 5 years with $37M paid in year one: human beings have a real need for "leaders" and pay dearly in their search (pardon the pun).

funkyy• 10 years ago

I wonder if people blindly defending Marisa and painting her as a female hero will finally ope their eyes and see clearly that she is - at most - a very average CEO... Yahoo needed someone amazing and it failed to find one.

mc323• 10 years ago

Well, it's not like they didn't have a longish list of other CEOs who tried to turn the ship around and failed to even slow its demise --at least she gave them breathing room and hope. It was probably just too late to be consequnetial.

exelius4• 10 years ago

The problem was that someone who was skilled enough to have taken on the job of turning Yahoo around would have just started their own company -- without the baggage of Yahoo's culture. VC is easy enough to get that any tech executive capable of a Yahoo turnaround would have had no trouble raising $50-200 million. Anyone capable of the job also probably wouldn't be interested -- Yahoo does not play in any big growth markets right now.

Bartweiss4• 10 years ago

Even for a CEO who wasn't looking to found a company, Yahoo can't have been an attractive bet.

Jack Dorsey was (apparently) in the market for a job change around 2011, was a two-time winner already, and has since shown that he's willing to take on turnarounds. Sounds great, but I can't imagine what offer would have gotten him to take over a bloated, directionless horror like Yahoo.

The entire job offer was an ugly one only suited to people without the independence and focus needed to succeed at it. Someone market-savvy enough to claw out a profitable place for Yahoo was bound to have options that didn't require mass layoffs and managing a dozen nearly-worthless side products.

geodel3• 10 years ago

Moreover besides leadership skills 'silicon valley chops/cred' and 'good taste in design' did not get proper scrutiny in most of the articles about her post Google work.

IMO her Google career itself was vastly exaggerated portrayal of her actual talent

Tloewald• 10 years ago

Yahoo got where it was by being the first directory on the web. It was terrible — to get listed you had to submit an application and then whether and how you were listed was based on someone's arbitrary decision. It was like The App Store (hint to Apple — how'd that work out for Yahoo?).

Yahoo then failed to fix its shitty directory (it eventually licensed results from third parties) and built a successful ad platform that was never bleeding edge. Meanwhile Yahoo passed on Google and Facebook…

cableshaft• 10 years ago

While I agree the App Store has it's fair share of issues, they do at least do more than 'here's the category an employee determined you should be, buried in subcategory after subcategory, and this is the only place people will ever find you' that the early Yahoo had.

They have dynamic lists based on sales and downloads (which has its own issues, admittedly) for every category that may be algorithm-based but has no human making arbitrary decisions for each individual app.

They also choose certain apps and feature them on the front page of the app store, which changes every week.

They also let developers choose their categories (instead of employees choosing the categories), and developers can choose more than one category.

They also let developers pick keywords (with some limitations) for users to find the apps via search terms.

Each app page has its own url, so it can be landed on via other methods throughout the web.

So all in all, it's very different from early Yahoo, and significantly better, and all of that would be plenty if they had like 1% of the total number of apps that they do, but they don't, so way too many apps get buried and unnoticed.

exelius4• 10 years ago

I don't think the failure is on Mayer; Yahoo was a walking zombie before she arrived. They were the last remnant of the dot-com boom -- a media company without a significant role in content, advertising, shopping or computing. They had no technological advantage, or really any foundation for a competitive advantage to set them apart from the rest of the market.

Quite simply, Yahoo was culturally never a technology company. They defined themselves as a "media" company in the mid 90s to avoid drawing Microsoft's ire, but they said it for so long they believed it. They underinvested in technology throughout the late 90s and early 2000s, and by that time Google was the behemoth that Yahoo should have been. Yahoo is only around today because they recognized the emergence of China and made a lucky investment in Alibaba. Without that investment, Yahoo would have gone bust years ago.

amykhar• 10 years ago

I was amazed that she took the job at all. Yahoo is dead, and has been for a very long time.

Ressuder• 10 years ago

I'm amazed that you were amazed. Seems like the perfect job to me. Not only because economically it's obviously fantastic, but also because she came to a company with significant resources and were basically given the freedom to do whatever the hell she wanted with it, without having to think much about an existing identify and business.

mc323• 10 years ago

I agree Y! was in decline many years before Mayer was brought in. They went through a few CEOs with the mandate to turn things around and failed even worse.

But to blame that on classification I think is misleading. Can we call Google a technology company (or Ad company)? Was Netscape not a technology company? Was inktomy not a technology company? It does not matter, what mattered is that they didn't confront change and adapt. In some cases your niche is too unique to be able to adapt and you'd essentially have to pivot (but that's hard for big cos --though there are good examples IBM and office equipment or any number of companies which went from manufacturing to basically sales orgs selling things produced elsewhere.

exelius4• 10 years ago

It's less about how the world saw Yahoo than how Yahoo saw itself. They felt that Microsoft's position in technology / the browser was too dominant, so they pivoted towards the "discovery" experience. Problem was, Google provided a better experience by approaching discovery as a technology company and was able to build a sustainable market advantage as a result.

Yahoo also never really sold anything. They were a publisher before there was a good marketplace for online ads. IBM was able to pivot because they had an established sales channel they could mine for dollars; but Yahoo's sales channels never got built out to the same extent before Google came in with a new model and obliterated them.

ProAm3• 10 years ago

I don't think the failure is on Mayer; Yahoo was a walking zombie before she arrived.

But they brought her on and paid her amply to specifically fix this problem. As a result she shares part of the blame for Yahoo's failure to right the ship.

karmajunkie2• 10 years ago

Do you fault the oncologist that doesn't cure advanced metastatic cancer? Or the patient who ignored the signs for years before quitting smoking?

deanCommie• 10 years ago

They had to try and they had to pay somebody. It's entirely possible she was the best person for the job. It's just as entirely possible that the task was impossible, and both her and the board knew it, but had to try their best.

simonsarris• 10 years ago

I think there's plenty to make a case that Mayer specifically was a large negative vs Yahoo on twin-earth where someone else was CEO.

Many(?) aquisitions were her plan. From the article:

goodwill impairment charges of $1.2 billion

This means since 2012 Mayer has overseen the aquisition of companies for at least $1.2b more than their book-value worth, and now that value is gone. Paid a premium for brands and then lost the value of those brands.

~~~

“She believes she can figure it out on her own,” says a former top Yahoo exec. “Her attitude is, ‘I watch TV shows, so I know TV shows.’” Mayer hired Katie Couric — in a deal reportedly worth up to $10 million per year, mostly in stock — because she personally likes the former TV news personality, without a sense of where and how Couric’s brand would appeal to Yahoo’s user base

~~~

Mayer was gung-ho on expanding Yahoo’s media business, particularly in video entertainment, approving a Netflix-like slate of scripted original series with a seven-year business plan to recoup the investment
Yahoo formally exited TV-style entertainment in the third quarter of 2015, taking a $42 million write-down on [original series, deals, then axed Yahoo Screen division]

Her plan.

~~~

Yahoo in February folded seven digital magazines, including titles covering food and travel, which had been a Mayer pet project. She wanted to launch dozens of vertically oriented magazines, dictating that they use Tumblr-based designs, hoping to better monetize Yahoo’s monthly audience.

Her plan.

Mayer has positioned those closures as a refocusing on Yahoo’s four strongest content segments — news, sports, finance, and lifestyle — as the company aims to cut 15% of its workforce over the course of 2016. But those were the areas on which Yahoo should have stayed laser-focused all along, according to S&P’s Kessler.

~~~

She had ideas that were either unworkable, poorly implemented, or she was unknowledgeable and hired the wrong people.

I don't think the failure is on Mayer

That's how this works. She had a job and failed. It's okay to say that. They aren't paying her to not take responsibility. They will be paying her more than you and I and many readers of this comment combined may ever make, just to leave.

LogicFailsMe2• 10 years ago

Or in other words, she tried to run Yahoo like it was Google. My experience at Google led me to see it as a bunch of poorly executed clones of trendy startups that never ship.

However, their insane ad revenue keeps the boat afloat, and allows them to fund moonshots and failures. Yahoo doesn't have that insane revenue stream so that strategy didn't work out so well there. Am I missing something?

tgb29• 10 years ago

Your evidence convinces me to agree with your position.

On my mind always is the Yahoo Fantasy Football product. In the past few years, the NFL has grown and other fantasy products have grown in value. Why was Yahoo not able to do the same? Why didn't they leverage the value of their sports products?

drdoom3• 10 years ago

Good points. I agree completely.

Yahoo has also gone from a genuinely useful and relevant aggregator to a full-blown click-bait shop.

Perhaps this is how she thought Google makes its billions and she wanted to emulate it.

Sad but she will be richer for it.

0xmohit• 10 years ago

They will be paying her more than you and I and many readers of this comment combined may ever make, just to leave.

Who knows that they might be still better off? That is probably the premium needed in order to limit one's losses.

nikdaheratik• 10 years ago

I don't think any of the items you've mentioned really mattered. They were moonshots but the issue with Yahoo, in my mind, is that the investors have different ideas about what they want and how valuable the company really is. And I don't think anything she, or anyone else, did would have made a bit of difference.

There are basically two camps: The founder camps that want to try and prop up the value in order to keep their stake high, and the shark investor camp that are betting on some kind of acquisition (leveraged around the value of Y! Japan and Alibaba) for them to cash in their stake.

The first is the one pushing for all the moonshots (and were the ones moving to hire her in the first place) and the second group would love for her to fail so they can move on with selling the company and get their stake back.

All of the "moonshots" you've mentioned are basically just late game hail mary's that were likely not going to work. IMO, the only way for any CEO to get the business turned around would be to pay off all the shark tank shareholders, strip out as much of the non-core business as they can, and then rebuild the brand from the ground up. However, the founder shareholder camp is firmly against that for a number of reasons, including the fact that many of them would be the ones losing their place at the company.

If you look at the stories of successful turnarounds, they all had unified investors. In the case of Apple, everyone rallied around Jobs because they knew their stake was worthless if they didn't give up on their pet projects. But because of the other investments, there's a solid floor on the value of the company, so all of the key investors know there's a fairly solid floor price on the shares, and everything else is just house money. Why not bet on moonshots in that case?

Fricken• 10 years ago

I think it's conventional to give Mayer the benefit of the doubt, I certainly did for a long time, but if there's one responsibility that lies squarely in the hands of the CEO it's to define a clear, unifying vision for the company that catalyzes employees, users and investors. Mayer failed to do this, I'm not sure she even tried. This whole time she's been fixated on minutia while remaining casually oblivious to the big picture.

Let's compare mission statements. Google's mission is to "organize the world's information and make it universally accessible and useful". Absolutely. Makes sense. Tesla's mission is to "accelerate the world's transition to sustainable transport". Yes, I can get behind that. Every move Tesla makes reflects their mission.

But what's Yahoo's Mission? (and now that I Google it, it has changed again, for the 25th time) "Yahoo is a guide focused on informing, connecting, and entertaining our users".

I'm Really not sure how to connect that with the sick parade of misfit properties circling the drain we call 'Yahoo'. Though we can all make our best guess, I'm not sure anyone clearly understands what Yahoo is, or what it's trying to be. Not even Marissa Mayer. That's job #1 for a CEO.

boxy310• 10 years ago

informing, connecting, and entertaining our users

I'm struggling to find a way to distinguish this definition from the Internet writ large. Yes, everyone agrees that Yahoo is on the internet, but nobody can really say why.

saiprashanth932• 10 years ago

Sick parade of misfit properties should become a part of the tech folklore to describe situations like this more clearly.

hashberry• 10 years ago

"I don't think the failure is on Mayer; Yahoo was a walking zombie before she arrived."

So you're saying that no one can save Yahoo, not in the past three years, not now, and not in the future? The company is simply doomed? Sorry, I don't buy it... Mayer had a leadership position and she failed.

cpeterso• 10 years ago

I wonder how other superstar CEOs would have managed Yahoo! differently. What would Steve Jobs, Elon Musk, or even Larry Page each have done differently?

GantzGraf• 10 years ago

I'm fascinated by the vitriol directed at Marissa. A lot of people seemed to take her hiring and subsequent performance as a personal offence to them.

CaptSpify2• 10 years ago

It's a couple of things from what I've seen:

A) That she was paid so much money. A lot of people could have "not succeeded" for a lot less than what they paid her.

B) Her attitude. I have never dealt with her, and am only basing this on what I've read: She seemed to push a lot of bad policies, that made employees upset, with the attitude of "All of this pain is for the Great Reward of turning Yahoo around." Yet at the end of the day, it seems that their sacrifices were for nothing.

She talked big, but never delivered, and is making out quite successfully, for failing. Meanwhile the real brunt and struggle was pushed onto the employees.

EDIT: I also think this resonates with a lot of people, as most of us have had similar execs. "No, we can't afford another server, you'll just have to work harder. Guess you'll just have to work through the night! Oops, it's 5 p.m., time for me to head out to my company-paid steak dinner, in my company-paid car, then time to head home to my company-paid apartment!"

Tomte• 10 years ago

Ad A: on the other hand, few people here complain about the outrageous amounts of money that some founders have made.

Yes, they built something. Still.

VLM• 10 years ago

CaptSpify makes some good points. There's also pride. Outside the SV echo chamber defines big old tech company.

Driving it into the ground at mach 3 makes every leader in SV, every leader in tech, look bad. "Why just like yahoo, I'm sure twitter is worthless and about to go out of business" We either know better, or for various social reasons we can't say stuff like that, so we don't say stuff like that. But she's representing "us" to the world, very poorly indeed, which hurts many people's pride. "Why all those SV CEOs can't lead starving dogs to raw meat, right?" That's gonna bruise some pride. On the very big picture, its no different than a sexual harassment scandal or an arrest for securities fraud. It makes an entire industry look very bad. So the distancing starts. "I'm no Marissa" "She's awful nothing like me or us" "she was never one of us"

mwsherman• 10 years ago

I don’t think there is a strong case to be made that the CEO matters much here. We’d need to see the counterfactual of what would have happened in her absence. Maybe the same, maybe better, maybe worse.

And in any case, there is no reason to believe that Yahoo’s or any tech company’s continued existence is normal. Yahoo was of a time, as was Digg, MySpace, etc.

It’s easy to say they “screwed up”, but success for any amount of time is the exceptional part. Regressing to the mean of “non-existent” or “not valuable” is…normal.

dreamcompiler• 10 years ago

Yahoo.com is the address I ping when I'm testing a new wifi connection. This article seems to suggest they also have a website. Wow. Learn something new every day.

stillusingvb6• 10 years ago

2edgy4me

jbail• 10 years ago

Remember when Mayer banned remote work at Yahoo? She still defends that choice even though she has clearly failed to prove her thesis that you need to sit next to someone collaborate successfully and deliver improved business results

Bartweiss4• 10 years ago

I've always suspected that people took that decision too much at face value. Yahoo needed to make staff cuts, and too many layoffs are bad for the share price. Convincing all the remote employees to quit lets you claim "there's a plan!" while quietly thinning the ranks. The catch is that it doesn't work if you state your real reasons.

jpmattia• 10 years ago

That would be about the worst form of leadership possible.

By relying on attrition, you can pretty much guarantee that the people with the best offers waiting on the outside are going to leave, and that's pretty highly correlated with the people that you actually want to keep.

If layoffs are required, there is no other way than to take the bull by the horns and make hard decisions about who has to go and who has to stay. Sometimes that involves making decisions about what programs are going to go/stay, which consequently leads to letting good people go when you shut down some of those programs.

I'd also guess that shareholders have learned the lesson many years ago, which is why active layoffs often increase share price. Layoffs tend to increase near-term profitiability; whether long-term profitability is increased depends on whether you get the layoffs & refocusing done right.

ng122• 10 years ago

The problem is many of the remote employees were the truly valuable ones. Talented engineers get spooked pretty quickly and a flexible work schedule is a very good reason to stick it out at a struggling large company. The more of those reasons you take away the more you'll find yourself with less desirable engineers.

drdoom3• 10 years ago

Some people caught on earlier to the direction she was going (i.e., down). It was so alarmingly clear that some journalists even floated the idea that she may in fact be an agent of a competitor to bring Yahoo down. In other words, she was suspected of being an insider agent working for the other side.

1024core• 10 years ago

You know those algae blooms that block off all sunlight and kill a pond? Yahoo has that in the form of middle managers. Marissa's biggest (and perhaps even the only) mistake was to not get rid of this oxygen-depriving algae. Had she eliminated the middle-managers and meeting junkies, she could have liberated the engineers to actually deliver some solid products.

// source: wasted many years of my life at Yahoo, left after Marissa came and I realized that she was being hoodwinked by the manager-types.

googletazer• 10 years ago

She got several millions out of it. The engineers might have been buried but hey at least someone came out on top.

The only chance for yahoo was promoting someone from within not bringing a "professional" CEO that will jump ship in a few years.

leroy_masochist2• 10 years ago

It's interesting that people only get mad about golden parachutes given to "rock star" CEOs when things are going poorly for the company that hired them. I feel like we should do a better job about calling out these agreements whenever they're inked; it's publicly available information in the case of publicly traded companies.

Some kind of severance guarantee for the new CEO in case they get fired, OK, I get it. You need to keep your kids in private school and continue to pay your mortgage for the period of time while you find something else to do, fine, no problem. I'd even be fine with a healthy multiple of what that kind of expensive lifestyle costs for 6 months. In Mayer's case I'd even say that a million bucks might be justified, given that it will probably take her a while to find something else to do.

But an agreement that will likely soon result in a $55mm payment to an outgoing CEO who has spent nearly 4 years pissing money away in bad acquisitions and destroying value across multiple verticals is absurd.

a_small_island• 10 years ago

The theory is that no one good would take the job because the likelihood of failure was so high without a parachute. This type of ousting will certainly hurt Mayer's future CEO options, or so the theory goes.

leroy_masochist2• 10 years ago

I guess it depends on how you define failure. I agree that elevating Yahoo to its previous place in the SV hierarchy would have been a tall order, but I think that prudent management of healthy business verticals combined with a conservative and thoughtful approach to acquisitions would have been pretty doable.

drdoom3• 10 years ago

When she was at Google, Mayer oversaw the approval of each daily homepage “doodle.”

I love this new career path. Beats working years just to advance to manage your old team.

Now I can see the logic behind all the attention on emojis at the Google I/O event. They will be our new leaders.

nickpsecurity• 10 years ago

I would call it Yahoo's Failed Prophet given she made best attempt anyone had seen in forever to get her people to the Promised Land in a few years after they marched 20 extra years in the Wilderness in the wrong direction stepping on what manna they received. Even Moses or Joshua might say "Screw this!" in such a situation. Well, Moses basically did but you don't see people calling him a false prophet. ;)

throwaway4123• 10 years ago

2 years from now-

Twitter's False Prophet: How Jack Dorsey Failed to Turn the Company Around (wsj.com)

HN top comment: I don't think the failure is on Jack; Twitter was a walking zombie before he arrived. All the engineers left after writing their own version of popular well designed Scala libraries like Akka and Spark and Play because huge ego. They stuffed these rewrites into monorepo which came crashing down. The engineers ran away and Jack turned off the lights.

known• 10 years ago

Copy/Compete; Yahoo is doing neither;

spajus• 10 years ago

I knew this would happen the minute she banned remote work.

How Marissa Mayer Failed to Turn Yahoo Around

Related Stories