Marissa Speaks! CEO Mayer Lays Out Where Yahoo Needs To Go

Marissa Mayer

Yahoo CEO Marissa Mayer (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

It’s a quarter that probably doesn’t matter much, but Yahoo eked out a small rise in profits on slightly higher sales in its third quarter.

It’s the first full quarter since CEO Marissa Mayer joined the company, and while investors are more concerned about the future, so far they like what they see in the last quarter. Shares are rising about 3% in after-hours trading following a decline of less than 1% today, to $15.77 a share.

Yahoo’s third-quarter revenues rose 2% to $1.09 billion, earning a 35-cent profit per share. Operating income came in at $150 million. Wall Street analysts were expecting net revenues of $1.08 billion, operating income of $180 million, and GAAP earnings per share of 26 cents. Including a onetime gain from the sale of shares of China’s Alibaba, Yahoo’s EPS was $2.64.

Those figures are minus the costs of acquiring traffic from website partners. Gross revenues fell 1% to $1.202 billion, a touch below analysts’ $1.206 billion estimate.

In particular, display ad revenue, Yahoo’s mainstay business, came in flat from a year ago at $452 million, but search ad revenues via its multi-year deal with Microsoft were better than expected, up 11% to $414 million.

And we’re underway on the analyst call with Mayer:

Mayer says she’s thrilled to be hear, naturally. She says she has been having a lot of fun. Why did I come to Yahoo? This job is tailor-made for me. Search, mobile, ads, home page, etc.–all things I built my career on.

She’ll talk about priorities and vision–great! First she addresses the people problem–that is, all the ones who have been leaving in droves for years. She says she has instituted new goals, metrics, etc. for people. True cultural change can’t be bought. The vast majority of what we’ve done hasn’t cost much, she says. …

Read the complete post at The New Persuaders.

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Job One For Yahoo CEO Marissa Mayer: The Vision Thing

Marissa Mayer

Marissa Mayer (Photo credit: jdlasica)

Cross-posted from my Forbes.com blog The New Persuaders:

Everybody has all kinds of advice for Yahoo’s new CEO, Marissa MayerHire great engineers. (Well, duh, but how? Big money alone won’t do it.)  Fire 10,000 people. (Sure, Marc, easy peasy–that should help with recruiting too.) Fix Flickr. (Right, and 47 other services while you’re at it.) Go mobile. (Years late, that should work.)

Granted, most of those things may well be necessary at some point, and probably soon. But here’s what everyone from employees and advertisers to users and investors needs to know first: What is Yahoo?

It’s a question that has produced unconvincing answers for so many years it’s hard to remember by now what made Yahoo unique. Yahoo itself takes a direct crack at it on its “Investors FAQs” page, answering the very same question, “What is Yahoo!?”:

“Today, Yahoo! Inc. has become the world’s largest global online network of integrated services with more than 500 million users worldwide.”

Ugh. “Digital media company”? Makes my heart, uh, flatline.

It also has an actual “mission or vision statement,” a clear carryover from Carol Bartz, two CEOs ago:

“Yahoo! is the premier digital media company. Yahoo! creates deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. That’s how we deliver your world, your way. And Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses.”

A little better, but really, “Science + Art + Scale”? Hard to imagine that means much to advertisers, let alone consumers. (I was always surprised Bartz didn’t call it Art + Science + Scale to provide a more characteristically salty acronym.)

Still, there’s a kernel of something in the part about keeping people connected to what matters to them. I will hazard an unpopular view that Yahoo’s original mission as a portal still has fundamental appeal to many people. Most digerati will say the portal is dead, and good riddance, as people flock to more focused services such as Facebook’s social network and Google’s search engine. So if Yahoo comes out and says it’s a portal, it will become even more of a laughingstock in the tech community.

But even Google and Facebook increasingly are becoming hubs for all kinds of activities, even if they will never utter the P word. So it seems clear that a very large number of people out there want someone else to help them decide the best services and apps to use online–and provide a way for them to work together and share data in ways that are useful to us, not just advertisers. It’s also clear that many people are leery, thanks to privacy concerns or simply because they may miss the latest and greatest from that new upstart, about going all-in on Google or Facebook or even Apple.

At its heart, Yahoo’s value, when it has had value, is providing people easy, curated access to the best online services out there, whether they’re Yahoo’s own or others’. That’s a media company, however that’s evolving today and will continue to evolve in the future.

Of course, a vision only works if you act on it, so ultimately, what will really matter is creating new services people can’t live without. Those are now few and far between at Yahoo, though a few like Sports and Finance come pretty close. Spurring the creation and execution of new ones is where Mayer could shine where her predecessors did not.

But Mayer’s vision needs to acknowledge that Yahoo’s future can’t simply rest on pumping out cool products. It needs to be more meta than that in an era when only a couple behemoths can even think about providing everything on their own (and even Google has throttled back its habit of throwing stuff against the wall to see what sticks). And dozens of smaller companies are providing best-of-breed services that Yahoo will be hard-pressed to compete with.

The way Yahoo becomes a 21st century media company, a concierge of online services, needs to be fundamentally redesigned for the mobile era, of course. I still use MyYahoo a lot because I’ve populated it with stock lists, key news sources, access to email accounts, quick views into other services such as Twitter and Facebook, and more. But the desktop version is a fright on my mobile phone, and the mobile version is simply a long list of seemingly random feeds.

Yahoo, of all companies–the one that famously kept its home page simple enough early on that it wouldn’t take more than a few seconds to load on slow dial-up connections–should be able to figure this out. Even Apple, with the random scattering of apps across multiple pages on its iPhone, hasn’t figured it out. But I’d love to see it, and I and a few hundred million other people wouldn’t mind getting it from Yahoo.

For her part, Mayer provided a provisional vision of what Yahoo is or should be to the New York Times: “My focus at Google has been to deliver great end-user experiences, to delight and inspire our end users. That is what I plan to do at Yahoo, give the end user something valuable and delightful that makes them want to come to Yahoo every day.”

But that “something” is far too diffuse, and surely she knows that. As a former product chief at Google, Mayer may face a challenge doing the vision thing. She needs an elevator pitch, yes, but more than that: She must make a clear, bold statement of why we should continue to type Y-a-h-o-o into our browsers, or install Yahoo apps on our smartphones.

What Google Veteran Marissa Mayer Can Do As Yahoo’s New CEO

Marissa Mayer

Marissa Mayer (Photo credit: Wikipedia)

From my Forbes.com blog The New Persuaders:

In a surprise move widely viewed as a coup, struggling Yahoo has just appointed Marissa Mayer, a highly visible longtime executive at Google, to be its new chief executive. The appointment, initially announced through a New York Times story, now has been announced officially.

Mayer, who for years ran Google’s search products after joining as employee No. 20 13 years ago, more recently had moved to head its local business efforts. But last year, Jeff Huber was appointed senior VP of local and commerce, seemingly a management level above Mayer, though Google tried to say the move wasn’t a demotion.

Mayer, 37, wasn’t mentioned as a possible Yahoo CEO successor to Scott Thompson, ousted in May after revelations about a falsified resume. Instead, it was becoming more likely that interim CEO Ross Levinsohn would step up to the permanent post, if any CEO job at Yahoo, which has run through multiple CEOs in recent years, can be said to be permanent. On the other hand, delays in the decision indicated the board wasn’t going with the seemingly easy choice.

In an interview with Andrew Ross Sorkin of the New York Times’ Dealbook column, Mayer said that despite “an amazing time at Google” for the last 13 years, the decision to take the top spot at Yahoo was “relatively easy” because it’s “one of the best brands on the Internet.”

The job will be a big challenge for Mayer, as it would be for anyone, because Yahoo has been losing ground on virtually every measure, with sales flat or down for years. What’s more, there has been a steady exodus of talent as Yahoo changed direction and leadership multiple times in recent years and laid off thousands of workers.

Mayer faces an additional challenge because she has never run a company, let alone a large one that’s essentially fighting for its life vs. runaway competitors such as Google, Facebook, and even Twitter. Even more important, perhaps, though she was apparently moved over to Google’s local efforts to revive them, she hasn’t faced a true turnaround situation before. She could face a skeptical reception from investors, analysts, and especially Yahoo employees, who have seen two other outsider CEOs, Thompson and Carol Bartz, depart without making any headway. …

On paper, a charismatic product chief from the company largely responsible for Yahoo’s decline as an online advertising powerhouse looks like just what the Web pioneer needs. But her success now will depend not on what she has done in the past at the world’s most successful Internet company but what she can do next at the least successful one.

Read the complete post at The New Persuaders.

Google’s Marissa Mayer Live at TechCrunch Disrupt

Marissa Mayer, Google’s vice-president of search products & user experience, is holding a fireside chat at the TechCrunch Disrupt conference this afternoon. One of the best-known faces of the search giant, she often provides clues to where the look and feel of Google’s signature service is heading. She’s talking with TechCrunch editor and newly minted millionaire Mike Arrington.

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