Gigaom

Why Marissa Mayer May Not Fit Yahoo


Why Marissa Mayer May Not Fit Yahoo

Photograph by Noah Berger/The New York Times via Redux

In a bombshell announcement that sent shock waves through the technology sector, former Google (GOOG) executive Marissa Mayer has become the new chief executive officer of Yahoo! (YHOO)—the fifth CEO the faded Web giant has had in five years. Until her appointment was announced on Monday, many believed the company’s interim CEO, Ross Levinsohn, had the best shot at the top job because of his focus on media and the content side of Yahoo’s business, which Yahoo supporters believe is one of its few strengths. Mayer, however, is seen as being much more of a product-oriented and technology-focused manager. She came up through the engineering side of Google. What does that say about Yahoo’s future as a media entity?

Much of the response to Mayer’s appointment in the technology blogosphere has had an almost reverential tone, which isn’t surprising, given her track record at Google (where she was employee No. 20). Some seem to believe she can turn Yahoo around simply through sheer force of will or that her status as a former Google executive means she will be able to accomplish things Yahoo’s previous five CEOs weren’t able to. Regardless of her experiences at Google, Mayer faces an enormous set of challenges; despite her impressive résumé, it’s not clear she has the skills Yahoo needs in order to recover.

One of those skills is an understanding of how a modern, Web-based media company works and what is required in order for Yahoo to succeed in that market. Since it has either sold off its other assets—in the case of its search business—or de-emphasized them to the point of irrelevance (as it arguably has with properties such as Flickr), Yahoo as it exists now is primarily an online media company. And Mayer has virtually no experience with anything approaching the media business, unless you consider Google to be a media company whose content consists of search results.

That’s why some believed Levinsohn the right person for the CEO job: He has been running Yahoo’s media properties for some time and comes from a digital-media background. Mike Walrath—a former executive at Doubleclick and former CEO of digital-advertising company Right Media, which he sold to Yahoo in 2007 for $800 million—said in a blog post about Mayer’s appointment that he doesn’t think the former Google executive is a good fit with Yahoo.

As Walrath put it: “A CEO who understands the media opportunity, and understands that in the world of media “good enough” is good enough when it comes to technology, feels like the right leader for Yahoo. That’s what Ross Levinsohn (and his plan) felt like to me, and I think it was going to work.”

Walrath’s fear—and that of some others who have been critical of Mayer’s appointment—is that the former Google executive is too much of a product-focused and technology-focused person and that those skills aren’t what Yahoo needs right now. Yahoo-watchers may dream of the day when Mayer turns Flickr into the massive photo-sharing success it could have been a decade ago, or talk about how she will help Yahoo attract better technology talent, but will any of those things help to ensure the company’s success? If Mayer is going to focus on building great products, what products might those be?

She could try to focus on media products, but the approach she was known for at Google—where Mayer famously decided what shade of blue Google’s search links should be based on rigorous A/B testing of more than 40 different colors—doesn’t seem like a great fit for that task. As Walrath points out, media isn’t really about technology, so throwing developers at a problem may not be the best solution. Apart from understanding how search engines work, there hasn’t been much actual hard technology behind the rise of new-media giants such as the Huffington Post.

As Forrester analyst Shar VanBoskirk notes, one of the biggest challenges for Yahoo in the past has been defining exactly what it is. Is it a technology company? Is it an advertising platform? Is it an e-commerce player? Each of the past five CEOs has had a different vision, and Mayer will need to have one, too. But is that the kind of thing she will be able to provide?

Says VanBoskirk: “Yahoo! needs a strategic visionary, not a product engineer. 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.”

It’s possible Mayer could get up to speed fairly quickly on Yahoo’s media-oriented nature and come up with some innovative solutions to its problems, which for the most part have to do with monetizing the massive portals it has in products such as Yahoo News, Yahoo Sports, and Yahoo Finance. That’s a similar problem to the one that another former Google executive, Tim Armstrong, has been struggling with at AOL (AOL), but he hasn’t had much success either, even though he came from the advertising side of Google. Mayer is arguably going to be at an even bigger disadvantage in trying to understand Yahoo’s challenges.

The company could try to buy its way into a financial turnaround, as AOL has done with the acquisition of the Huffington Post and a $150 million investment in its Patch hyperlocal news network: Mayer could acquire a host of niche media players like Vox Media, the Bleacher Report, or BuzzFeed and try to use them as the foundation of a new kind of Yahoo media property. But without a vision of where that would take the company, it’s difficult to see such a strategy succeeding, and there are no signs that Mayer has one. Levinsohn does, but it’s not clear whether he is going to stick around.

There’s no question Marissa Mayer is a smart and capable manager. She clearly has an appetite for risk or she wouldn’t have taken the Yahoo job in the first place. But she is going to need more than that in order to turn around a company that has now become the poster child for failure and missed opportunity.

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Companies Mentioned

  • GOOG
    (Google Inc)
    • $536.0 USD
    • 9.46
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  • YHOO
    (Yahoo! Inc)
    • $42.23 USD
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