She Might Have Saved the Company: Marisa Mayer & Yahoo

Yahoo! had the privilege of being one of the pillars that helped make the Internet the massive idea space, communication hub, and entertainment base that it is today. In its early days Yahoo was a basic page with 200 links to the founders’ favorite websites. In just a few months the page was getting millions of views. Advertising began popping up all over the page, and soon the two founders were making millions of dollars. Eventually the company went public and has been to the top of the market and bottom of the barrel when it comes to Internet and tech companies, with the latter being the more recent situation that Yahoo! seems to be in.

Marisa Mayer After surviving the dotcom bubble at the turn of the century and the fast-paced tech industry, the company is in its 21st year and is no longer the internet superpower it started out as. From 2008 to 2012 there was no discernible leadership, at least none that successfully lead the company anywhere but closer and closer to rock bottom.

Then, in early 2012, Ross Levinsohn was named the interim CEO of Yahoo! By July most of the company and executive were convinced he would be retaining the title long-term, given his many proposed plans for the company for the foreseeable future.

Levinsohn planned to basically gut the company’s tech-based business in order to start competing with media and content production companies. This would involve losing most of the business units in Yahoo and cutting the staff by 10,000 people, but his proposed plan would bring revenue up by 50% before taxes. All seemed well, until soon thereafter, when Levinsohn was informed that Marissa Mayer, a former Google executive, would be taking the position.

Mayer was part of the group that helped found Google. She was experienced and was fit to take over the tech-based company. Mayer went straight to work and changed the company that had been circling the drain.

Levinsohn had aimed to make the company focused on buying media and producing and distributing it through Yahoo! The board of directors that oversaw the appointment of the new CEO, however, were convinced that the company was a product company, focused on producing products that would draw use from the public such as search, mail, and news.

Yahoo Mail AppMayer was the kind of CEO that would focus on the products. She had been in charge of the search feature at Google for a period of time, and had proven that she knew how to make and maintain a product. She immediately took to the company like it was a young start-up. She added to the mobile engineering department, cut down the different web pages from over 100 to 12, started having personal meetings called F.Y.I.’s, and personally assisted in the redesign of the web portal and the mobile application.

A year after being named the CEO, the company’s stock price was up 100%. Tech engineers wanted to work for Yahoo! again. It seemed Yahoo! was on the upswing, which explained why Yahoo! bought the popular blog website Tumblr for $1.1 Billion in June of 2013.

So fast forward two years, and the majority of shareholders want to merge the company with the now downsized, yet successful, AOL. Mayer is desperately fighting to keep the company from downsizing and merging with the once-great web portal. Shareholders believe that a merger would become more profitable than throwing more money into the company whose only real value came from the investments it had made in a foreign internet start-up a decade ago.

AlibabaIn 2004 Yahoo! made a 40% investment in the Chinese-based Internet Company, Alibaba. Over the last decade Alibaba has grown to become the Google, Amazon, and Ebay of China. In 2014 the Company went public and it became apparent to the market that Yahoo was basically worthless and was riding on this investment. Yahoo! was forced to sell its stock in late 2014 to maintain its market value.

Yahoo! has not been able to make enough changes to their look and products under Mayer to gain the strength necessary to keep itself alive in the market. Mayer is insisting in meetings with investors that Yahoo! will find its new “iPod” and will become widely successful once again. Unfortunately it seems like the shareholders are ready to throw in the towel and merge with AOL.

In the fast-paced world of the tech industry it is amazing that Yahoo! has even lasted this long. Companies like MySpace and Zynga have came and left quicker than Yahoo! has lasted. Maybe it is time Yahoo! acted its age and settled for a business that would still net them a $1 billion profit each year. Maybe Mayer is on the cusp of a great discovery. The following weeks may give us an answer.

Thomas Winkelman

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