Mayer could pull off 'epic turnaround' at Yahoo
- 17 July, 2012 21:09
On Marissa Mayer's first day in the big chair at Yahoo, she has to figure out which problem to tackle first to right a company that has been buffeted by scandal, financial trouble and, possibly worst of all, growing market invisibility.
"On Mayer's first day, she should be meeting with her direct staff and addressing the Yahoo troops," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "She needs to get employees excited and provide some timetables for when her new team will execute to any new deliverables, like a new vision and strategy."
Yahoo announced late Monday that 37-year-old Mayer, a top-line executive at Google, was starting as the company's CEO on Tuesday. She is Yahoo's third CEO in less than a year, and industry analysts agree she has a huge job ahead of her.
Mayer herself announced on Twitter on Monday that leading Yahoo won't be her only new job. She is pregnant and due in October.
"Mayer has a successful track record and reputation for being able to plan and execute to what end users want, which is exactly what Yahoo has lacked for so long," Moorhead said. "But Mayer has no experience as a CEO, and she needs to be aware of potential blind spots. Great product people don't always make great CEOs and she needs a plan to get a few, quick wins under her belt."
So what should be Mayer's biggest goals in her new job? Analysts agree there are a few specific goals that she needs to achieve.
First, work on employee and investor morale.
"Both groups need to have confidence in her and her leadership," said Dan Olds, an analyst with The Gabriel Consulting Group. Added Rob Enderle, an analyst with the Enderle Group, "People need to believe Yahoo can be saved."
Part of improving morale, both inside and outside of the company, will mean laying out her vision for Yahoo and how it can climb back to the top again.
"Mayer needs to first establish an inspiring yet believable vision that clearly articulates what business Yahoo is in and why they will win," Moorhead said. "Then she needs to do a roll call to see who on her executive staff is in and who needs to be shown the door."
Mayer was Google's 20th hire and the company's first female engineer. In her 13 years at Google, which comprised most of her career, she rose to become a top executive who lead the company's critical Location and Local Services group.
She also was a public face for Google, giving interviews and speaking to enthusiastic crowds at Google conferences and industry events.
Olds said Mayer's experience makes her the right person to take over control of Yahoo.
"I think that she's finally the right hire for Yahoo," he added. "She has the right pedigree and experience, plus she knows how to work in a large organization. Being Google's 20th employee, she also knows how to foster the corporate culture of an innovative and successful company. Bringing Yahoo back is a tall order, but I think she's the right person for the job."
By all expectations, it will be a big, messy job (http://www.computerworld.com/s/article/9226898/Will_Yahoo_CEO_s_misstep_kill_company_momentum_ ) .
Last September, Yahoo pushed out then-CEO Carol Bartz. In January, the company hired Scott Thompson, president of eBay's PayPal division, as its CEO. Five months later, Thompson was out amid a public scandal surrounding the inaccurate reporting of his academic credentials. For the second time in eight months, the company was, not only in an embarrassing spot, but was without a CEO.
If that was all Mayer has to contend with, that would be a challenge. However, Yahoo has seen its share of industry troubles, as well.
The company started out as an Internet pioneer but slowly slid into the online background. Industry upstarts, like Google, Facebook and Twitter, have overshadowed Yahoo and it has lost user mindshare over the years.
Tuesday afternoon, Yahoo reported revenue for the second quarter of 2012 of $1.2 billion, essentially flat compared to the same quarter a year ago. Income for the period was $190 million, down $1 million from the same quarter of 2011.
"It's a bit of a train wreck," said Enderle. "But this could be an epic turnaround. Mayer is more qualified to run Google than [Google CEO Larry] Page is. She has better people skills and has the rounding needed by a CEO. You basically have the person who should be running Google running Yahoo. Pretty much anything can happen."
Over the course of the last eight months, reports surfaced both Microsoft and Google were trying to buy Yahoo. Some analysts thought selling would be a great option for the struggling company.
But now with Mayer at the helm, analysts say that option is likely off the table.
"I think bringing her in makes it obvious that selling the company isn't what the board has in mind," Olds said. "And I don't think she would have signed up for the job if it entailed taking Yahoo to the chop shop and selling off the parts. I think the only way they could land her was with a challenge that she couldn't get anywhere else - a place where she can prove herself, apart from Google and the vast success she's experienced there."
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is email@example.com.
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