Business

New chief must revive Yahoo's yodel

Josh Halliday & Charles Arthur

Marissa Mayer is taking her talent for revenue enhancement from Google to the competition. Josh Halliday & Charles Arthur report.

Marissa Mayer, the new chief executive of Yahoo, spent more than a decade as an integral part of Google’s management. (Justin Sullivan, AFP)

When she was interviewed for her job at Google in 1999, Marissa Mayer was asked to list three things the fledgling search engine could do better. Reputedly, she could only think of two.

Mayer is unlikely to have had the same problem after starting her new job as chief executive of Yahoo on Tuesday, hours after resigning from the company she had joined back then as its 20th employee. It was a company trying to find its way on the nascent internet, whereas Yahoo was then already a force to be reckoned with.

Now Google is the behemoth and Yahoo is in existential crisis, on its third chief executive in a year and losing its share of the advertising market to rivals like Google, Facebook and Twitter.

A multitasker who will habitually conduct an email dialogue while holding a conversation during a presentation, the 37-year-old from Wisconsin comes with many extras,  not least a degree in artificial intelligence from Stanford University, years of experience in looking after Google’s priceless search-results page and its Gmail product, and six months of pregnancy. (A baby boy is expected on October 7 and she says she will work through her maternity leave.) She is seen as one of the few executives who could turn Yahoo around.

She has already indicated that the biggest challenge she sees is to get people to use Yahoo on their cellphones and to get them to visit the site and properties more often. This has been a clear challenge for every Yahoo leader for the past five years, but Mayer could just be the one to drive its engineers and attract the new talent who can transform it.

Compelling experiences
“It’s going to be a lot of hard work,” she said. “My focus has always been on creating innovative and compelling end-user experiences, excellent technology and great design.”

Mayer was Google’s first female engineer when the company was just a no-frills search page. During 13 years at Mountain View, she has become a much-admired figure in the technology world and one with a high profile in Silicon Valley.

“It’s pretty hard to overstate her impact,” Google’s executive chairman, Eric Schmidt, told Glamour magazine in 2009, when Mayer was named one of its women of the year. “She built the team that designs the products we all use.”

Unlike some of her former colleagues, Mayer does not have one Google product that is known as hers. Rather, she is present in all major Google services developed over the company’s first transformative decade.

Eleven years ago, Mayer was one of 15 Googlers behind the company’s famous motto: “Don’t Be Evil”. According to Steven Levy’s book on Google, In the Plex, published last year, Mayer was on the three-strong team that invented Google AdWords, the ground-breaking algorithm that linked advertisers’ keywords to search results and delivered 96% of the company’s $10.6-billion in revenue in the first quarter of last year.

The appointment has raised eyebrows all over Silicon Valley. Google staff knew nothing of it; even Google founders Larry Page and Sergey Brin were reportedly taken by surprise. But there is no “gardening leave” in California. Non-compete clauses have been struck down by the courts, so Mayer is free to walk out and into her new job.

Yahoo’s yodel
“I saw a huge opportunity to have a global impact on users and really help the company in terms of managing its portfolio, attracting great ­talent and really inspiring and delighting people,” she said.

Allen Weiner, an analyst at research firm Gartner, said: “If she can pull this off and turn around Yahoo, it will make her legacy. Yahoo’s yodel has been missing for a long time. Her mission will be to bring that yodel back.”

Yahoo’s revenue has dipped since the end of 2010 but profit has roughly remained static. Yet none of its recent bosses has been able to enunciate what Yahoo is for. Mayer, an internet native, may be able to express a technological reason for why it can thrive and even carve out a new revenue stream from cellphones, where Facebook admits that it makes no money.

Scott Kessler, an analyst with S&P Capital IQ, said he hoped Ross Levinsohn, who had been interim chief executive and was tipped for the job, would stay with the company, but he was optimistic about Mayer’s prospects.

“Ross has the internet-media-advertising experience, but she has what the company so desperately needs,” Kessler said. “In addition to having a background at an internet advertising company, she is also an engineer. She has deployed products. She has managed a business.”

Mayer’s ascent inside Google continued until 2010 when she was put in charge of its plateauing maps and location products. It was a curiously sideways move for an executive who looked cut out for the top job. One year later, co-founder Page was announced as the new chief executive and Mayer was not even on the board of directors.

Now she joins a business in crisis, battered by newcomers who have stolen its advertising share and sent a succession of bosses scrambling to reinvent the technology giant as a content company. In Mayer’s hands, Yahoo, according to some, really stands a chance. – © Guardian News & Media 2012

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