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    Yahoo Makes Bold Move by Hiring Marissa Mayer as CEO: Analysts

    By
    Todd R. Weiss
    -
    July 17, 2012
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      After an embarrassing and distracting string of three CEOs just since January, Yahoo appears to be making a determined effort to get things back on track with its announcement July 16 that Google executive Marissa Mayer will now head Yahoo’s operations as CEO and president.

      The question that remains, however, is Mayer, 37, the right person to lead Yahoo, which just a decade ago was one of the first angels of the dot-com boom? Could Mayer’s hiring be just another step in a steady death spiral of Yahoo CEOs, or could this be the stabilizing choice that can finally get the company back on a road to success?

      In interviews with several IT analysts, the choice of Mayer is garnering mostly positive reviews for Yahoo, which has been overtaken in the last decade by direct competitor, Google, in the search marketplace. It makes it even more interesting that Mayer hails from Google, where she was one of that company’s first 20 hires in June 1999€“and the company’s first female developer€”when it was just getting started.

      “I really think this is a great move for Yahoo,” said analyst Dave Schubmehl of IDC. “If anybody can do it, I think she has a really great chance of making this happen” and turning the company’s fortunes around. Mayer “has been really instrumental in a lot of the Google work that is most popular, such as Google mail, and she redesigned the Google search page. She basically has a lot of background in the technology side and in the user-interaction side. Those are areas where Yahoo could potentially make a difference.”

      By bringing in Mayer and her diverse experience and technology leadership, Yahoo can now work toward merging its existing strengths€“a pool of talented people and plenty of good research€“to come up with new products that can ultimately earn new money for the company, said Schubmehl. “She might be the right lady for the time.”

      Another analyst, Dan Keldsen of Information Architected, said that while Mayer has all the necessary experience in leadership, innovation, technology and being a geek to be a success in her new job, the problem is that Google and Yahoo are two very different entities.

      “The challenge is that Google and Yahoo aren€™t anywhere near the same kind of company, so I don€™t think her experience at Google automatically translates over directly to Yahoo,” Keldsen said. “Google is a search engine company where most of their money is made through ads, while Yahoo is a portal company, which is more of a media company.”

      At the same time, Mayer does have experience in media through her work at Google, he said. “The question is, can any CEO step in” and get things back on track. “Yahoo’s not dead and it’s not dying. It’s just kind of sitting there. Can she make enough of an impact that both employees and the market as a whole begin to feel that the future is possible? Right now, they’re just waiting around. I think the door is wide open for her to make a big impact.”

      Mayer: New Yahoo CEO and Expectant Mother

      One wild card in Mayer’s hiring is that she’s pregnant and will give birth to a son in October, according to a report by Fortune.com. “Apparently, the Yahoo board knew about that and is fine with it,” said Keldsen. But what that could mean is that the new CEO will be somewhat distracted by the birth of her first child, he said. “The nature of the world is that any new parent is going to be distracted.”

      Overall, though, “It is a huge win for Yahoo to get Marissa for all she’s done at Google,” said Keldsen. “She’s wicked smart, she’s been around for a while and she’s helped make the whole technological revolution happen from behind the scenes. The fact of the matter is that no CEO is the only determination of what a company is going to do.”

      Douglas Clinton, a financial analyst with Piper Jaffray, lauded Mayer’s selection in an email statement, noting that the choice is “a surprise €¦ given her long tenure at Google.”

      The choice of Mayer “is a sign that Yahoo is focusing on product rather than being a media property,” Clinton wrote. “Given that, we€™d expect some meaningful improvements in Yahoo€™s offerings, particularly in lagging properties like Mail and mobile. Building a better iteration of Mail won€™t revive Yahoo, but making a suite of products that consumers can get excited about could.”

      At the same time, Clinton wrote that he believes that Mayer’s reign as CEO will be much longer lasting than the previous three CEOS at the company. “We do think Marissa is different because the board is different this time and this is their first placement at CEO,” he wrote. “Given the new board and Mayer€™s track record, she should have a few years runway, but we think investors will expect to see some meaningful changes in the near term given the stock has been basically dead money since Yahoo turned down Microsoft€™s acquisition offer [back in 2008].”

      Rob Enderle, of The Enderle Group, said in an email statement that Mayer starts with something that the three most recent Yahoo CEOs lacked€“a sense that she has won the confidence of Yahoo€™s board.

      “Marissa does come with a lot of hope, and folks are much more likely, given her success at Google, to believe she can turn the company around than her recent predecessors,” Enderle wrote. “That belief is critical to turning the firm around. However, she has no turn-around experience so we€™ll have to assess the quality of the executive team she builds to be sure she is on the right path.”

      Enderle said he thinks Mayer can be the stabilizing force that gets Yahoo back on track for success. “She really, based on her accomplishments at Google, should have been [named] CEO [at Google] and not Larry Page, which gives us an unusual situation where the person leading Yahoo should be leading Google. In any case, if she can€™t do this, it is unlikely anyone can.”

      One step she’ll have to take quickly if she’s to be successful is to create a fresh company foundation from which she can rebuild Yahoo, Enderle wrote. “She has a lot of housecleaning to do first, and if she doesn€™t do it, she€™ll spend her time putting out fires and not building the company.”

      Mayer Needs to Be a Strategic Visionary

      Another analyst, however, Shar vanBoskirk of Forrester Research, wrote that she’s “disappointed” about Mayer’s selection. In a blog post late Monday, vanBoskirk wrote that Mayer doesn’t fit Yahoo’s needs, despite her long experience and competitive knowledge garnered at Google.

      “Yahoo needs a strategic visionary, not a product engineer,” vanBoskirk wrote. “Yahoo€™s fundamental problem is that it has too many disparate products with no clear unifying thread that ties them all together. And Mayer’s background is in product development … not corporate strategy, not marketing, not brand definition … the areas where Yahoo has the most critical need.”

      VanBoskirk wrote that she’s also worried that Mayer’s hiring “signals yet another shift in strategic vision for Yahoo,€ where there have been four different business strategies over the last four years. €œI €¦ hate that Yahoo can’t identify and stick with a clear strategy for more than about 10 months,” she wrote.

      Charles King, principal analyst with Pund-IT, thinks Yahoo took a smart step with the hiring. “I can’t think of a better person that they could have chosen,” he said. “She provides a really interesting mix of business and technological savvy and a blend of those two qualities is what’s required at a company like Yahoo.”

      Part of what the choice shows, King said, is that Yahoo is really digging in and looking to finally solidify its direction. “This is something for the long term, not an interim step,” he said. “What we’ve seen with Yahoo over the last couple years is that they€™ve tried to bring the company back twice with tech-minded CEOs, then the last two guys were pure business CEOs.”

      What’s needed now is a CEO who can earn the respect of both the business community and the technology people inside the company,” King said. “You€™ve got to get in and fix the problems within the corporate culture.”

      Mayer replaces interim CEO Ross Levinsohn, who had subbed eight weeks for Scott Thompson, who served as CEO for four months, January to May 2012, before he was let go for embellishing his resume and then covering up the falsehoods.

      Mayer becomes Yahoo€™s second female CEO. Carol Bartz was the 17-year-old company€™s first, serving from 2009 to 2011, and its fifth in the last year.

      Mayer is a 1997 Stanford University graduate and a native of Wausau, Wisc., who worked for SRI International in Menlo Park, Calif., and UBS Research in Zurich briefly prior to joining Google.

      Most recently, Mayer was responsible for Local, Maps and Location Services for Google, the company’s suite of local and geographical products, including Google Maps, Google Earth, Zagat, Street View and local search, for desktop and mobile.

      Mayer led group efforts for many of Google’s most strategic products, including the development of its flagship search product and iconic home page for more than 10 years.

      Since 2007, the Sunnyvale, Calif.-based Yahoo has had seven CEOs: former Warner Bros. Chairman and co-CEO Terry Semel (2001-2007), co-founder Jerry Yang (2007-2009), Bartz (2009-2011), interim Tim Morse, Thompson, interim Levinsohn, and now Mayer. Semel resigned in 2007, with Yang replacing him. Tim Koogle (1995-2001) was the original Yahoo CEO.

      Todd R. Weiss
      As a technology journalist covering enterprise IT for more than 15 years, I joined eWEEK.com in September 2014 as the site's senior writer covering all things mobile. I write about smartphones, tablets, laptops, assorted mobile gadgets and services,mobile carriers and much more. I formerly was a staff writer for Computerworld.com from 2000 to 2008 and previously wrote for daily newspapers in eastern Pennsylvania. I'm an avid traveler, motorcyclist, technology lover, cook, reader, tinkerer and mechanic. I drove a yellow taxicab in college and collect toy taxis and taxi business cards from around the world.

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