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Call it the Silicon Valley Surprise.
Yahoo! (YHOO) shocked its observers and Wall Street today by naming Marissa Mayer, longtime Google (GOOG) executive, as chief executive of the teetering Silicon Valley Web portal. The beleaguered company has had four official CEOs over the past five years, and their names—Terry Semel, Jerry Yang, Carol Bartz, and Scott Thompson—have come to define hapless management. Thompson, the most recent chief exec, left the company in May after activist shareholders revealed that he had exaggerated his academic credentials.
Mayer, 37, was one of the first employees of Google, the company that first rode to prominence on Yahoo’s coattails as its search provider—and then quickly surpassed it. She ran Google’s search group for years and most recently has led the location and local division; she’s also always been one of the company’s best spokespeople. But over the past year she never seemed to find a place on CEO Larry Page’s senior leadership team.
Mayer now faces an almost impossible task. She must restore Yahoo’s ability to innovate, repair its image with advertisers and customers, and inject some energy into the depleted work force, which has been bruised and battered by layoffs and a cratering stock price. And while she’s doing all that, she’ll have to manage restless shareholders such as Daniel Loeb, who recently joined the board and controls two other seats as well, and fend off Yahoo-obsessed bloggers (particularly this one) who seem to have a direct pipeline into the Yahoo boardroom.
The biggest problem at Yahoo remains existential—what is Yahoo’s mission, anyway? Often nothing seems as trivial and artificial as a corporate mission statement, but such exercises do help clarify the minds of the troops and unify them behind a common goal. Google’s mission is “organize the world’s information and make it universally accessible and useful.” Amazon (AMZN)’s is to “build a place where people can come to find and discovery anything they might want to buy online.” Apple (AAPL)’s is to create the best-designed, best-in-class PCs and digital media devices in the world.
Yahoo’s mission statement, according to its website, is to “create deeply personal digital experiences” and to connect users to what matters most to them. The Internet does that very well all by itself, thank you, and social media such as Facebook and Twitter have also encroached on that vague territory.
But Mayer has something most of her predecessors have lacked—she’s a trained engineer, with a masters degree in computer science from Stanford. Ross Levinsohn, the interim CEO and apparent frontrunner for the job, was a media guy who hailed from News Corp (NWS). As Yahoo’s rivals have amply demonstrated, having technical knowledge and an innovative vision are the qualities that make for successful leadership in the rapidly changing world of the Internet. To the extent that it’s even possible to right the good ship Yahoo anymore, the Yahoo board may have finally gotten it right.