Everyone was looking forward to how Marissa Mayer would fare at Yahoo, after her largely successful thirteen-year stint at Google. Over time, things have not gone exactly according to plan for Mayer and those who placed their faiths on her though. We here analyze some key problems with her reign at Yahoo.
It has been over 21 months since Marissa Mayer took over as the CEO of Yahoo, and the jury is still out as to whether she is actually making any headway towards reviving the ailing company. Sure, stock prices have gone up by decent amounts, interest among prospective employees (mostly engineers) have increased – but most of Mayer’s strategies have come in for severe criticism from web analysts and experts. The ouster of Henrique de Castro, the chief operating officer of Yahoo, is also being looked upon as an example of Mayer’s poor man-management skills. Here are some pointers that indicate that Marissa Mayer has not quite been able to steer Yahoo in the right direction:
- The starting point was not ideal – To give where credit is due, Marissa Mayer never got a solid base to frame her growth strategies on. Yahoo’s popularity had taken a nosedive when she took over (in July 2012) – and there was hardly any buffer for testing out tactics that might or might not work. Steve Jobs pulled Apple out of an almost similar mire, but that was an one-off case. Also, Mayer is no Jobs – at least, there have been no indications till date about that!
- Flop product releases and revamps – There’s quite a bit of confusion as to whether Mayer wishes to project Yahoo as a tech product-based company, or a search/media engine (as a focused competitor to Google). If trends are anything to go by, the former appears more likely – but the response to Yahoo’s latest offerings have been far from favorable. The redesigning of Yahoo Mail interface was roundly booed by practically all users. Even Flickr, the photo-sharing portal, has witnessed a decline in its fan base. In case media operations are to be the focus area of Yahoo, the sacking of Ross Levinsohn (the person Mayer succeeded) does not make any sense.
- Unsatisfactory forays into the mobile markets – Yahoo’s new CEO has talked the talk about the need for the company to make a strong entry into the mobile markets. Mayer and her team are yet to live up to expectations in that regard, however. As confirmed by reports from leading mobile app development companies, Yahoo’s recently launched applications have failed to break into the top-fifty apps at the Apple iTunes store (none of them!). There’s no visibility for Yahoo mobile applications, and that’s hurting the company.
- Too aggressive acquisition strategies – Have you heard of Loki Studios? Even if you have, most people aren’t even aware about teeny-weeny tech startup companies like these. Probably taking a cue from Facebook and Google, Mayer has been on a spree of ‘acqui-hiring’ such companies – in a bid to build a pool of the best talents, while cutting down on extra recruitment costs. What she has not bothered to consider is that, randomly picking such newbies and offering them fat paychecks might (and probably is!) not be looked upon kindly by long-serving Yahoo employees. Discontent among the in-house personnel at the company is growing, which is never a good sign.
- Failure to implement effective HR policies – The stack ranking policy, which Mayer evidently likes so much, is a classic example of her precious little command over human resource management. At a time when Microsoft – the company which pioneered this system of employees being monitored and ranked by their respective managers – has moved away from it, Yahoo is clearly interested in making stack ranking the only guide for scrutinization of employee performances. Unknowingly, Mayer is encouraging the engineers and executives who are more interested in buttering up their managers, instead of putting in that extra bit of effort at work.
- Why was remote working abolished? – Even average software firms and iPhone app development companies have flexible working options – so why did Yahoo do away with it? Marissa Mayer probably wanted to make a statement as to who was in charge at the company, when the policy of remote working was abolished. At present, more weightage is given on the onsite presence of people at Yahoo, instead of how much they are actually contributing for the company. It’s the latter that matters – but sadly, Mayer has not yet understood it!
- Attempts to bring too much of Google into Yahoo – Marissa Mayer was the twentieth employee at Google, and served at the company for as long as thirteen years with distinction. Understandably, she is making an attempt to repeat her recipe of success at Google in her new company too. The problem is, apart from the online search engine bit, Google and Yahoo have precious few similarities. What worked like a charm at the product-based Google are not likely to be effective at Yahoo, which is, in essence, an online media company. There has been no horses-for-courses strategy-making from Mayer till now.
- Yahoo’s surge in stock prices look hollow under the scanner – An increase of over 105% in the stock prices of Yahoo is nothing to be sneered at. However, a closer analysis would reveal that Mayer’s words, instead of actions, have had more to do with this apparent boost in investor confidence. Yahoo’s share in the online advertisement market in the US has declined since her appointment in 2012, and overall sales figures have not shown any upward trend. The rise in share prices has not translated into a push to the company’s earnings and profit figures.
- Lack of optimism for a quick change of fortunes – Now, everyone realizes that transforming Yahoo from a loss-making organization to the market-leader is not an overnight task. That, however, does not mean that the CEO would make public statements that positively reek of pessimism. Mayer has come out with the statement that it would take ‘years’ for the company to make a really strong comeback. The question is, Carol Bartz, Scott Thompson and Jerry Yang were not allowed much time to turn around the company’s fortunes – would the owners be patient enough to stick around with the not-too-hopeful Mayer for long?
- Yahoo’s attracting talents, but not the best of them – Large-scale media companies invariably look for the best talents from across the globe, app companies are always on the hunt for the top mobile app developers – but Marissa Mayer can’t be less bothered by such common sense-driven policies. The moment she abolished telecommuting at the Yahoo headquarters, geographical barriers were put on the pool of employees which the company could hire. The total number of CVs Yahoo received last year was impressively high, but there was no chance of remote workers (even if they were really good) to work from off-site locations. Mayer’s justification for this autocratic policy is childish – she is at the office, so all her employees have to be present there too. Is Yahoo a school?
- No clarity of vision – Marissa Mayer is a talented Stanford graduate, a successful ex-employee of Google – but she lacks the experience of helming an online media company. Her talents as a product engineer are beyond all doubts (Mayer’s A/B testing procedures at Google were a rage), but she cannot really be considered as a strategic mastermind. Under her watch, Yahoo’s products and services are getting increasingly non-unified, there has been hardly any brand-building, and the acquisitions have mostly been hunch-driven. Yahoo badly needs a marketing visionary, and Mayer clearly does not fit the bill.
- Questionable handling of the editorial department – Celebs like David Pogue (a former columnist at New York Times) and Katie Couric (a TV anchor) are now members of Yahoo’s editorial department. Whether they have indeed added to the company’s image as a sophisticated online media firm remains under doubt though. Jai Singh, former chief editor, has already left Yahoo – a telltale sign that all is not well in this department. Mayer has made it mandatory for all editors to report to Kathy Savitt (the CMO) – yet another decision that has not been well received.
It’s not that people do not wish Marissa Mayer to succeed at Yahoo. With Microsoft not being the force it once was, it would be great to have a worthy competitor to Google. Mayer is surely giving it her best shot at reviving Yahoo – but this might be a classic scenario of where her best efforts are simply not good, or apt, enough!
Hussain Fakhruddin
CEO at Teknowledge Software
Hussain Fakhruddin is the founder/CEO of Teknowledge mobile apps company. He heads a large team of app developers, and has overseen the creation of nearly 600 applications. Apart from app development, his interests include reading, traveling and online blogging.
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