Picture Yahoo as a runaway train headed straight for a thousand foot deep gully. The tracks lead off the edge into a swirling abyss of digital irrelevancy. Now, picture Marissa Mayer, Yahoo’s CEO for the past four turbulent years, as the conductor, moving about hurriedly, sweating madly. Her hands practically fly across the levers and knobs, doing everything in her power to stop the train from careening over the cliff. Gears grind, sparks fly, but the train fares much better than it would at the bottom of the cliff.
Is time running out for @Yahoo's #MarissaMayer? https://t.co/kyeWmHUybU pic.twitter.com/ynOSwNd2yV
— Financial Review (@FinancialReview) January 11, 2016
Mayer’s Yahoo is far from perfect. The premiere internet company of the late 1990s has had a brutal decade, where it's share of internet search and advertising has been wrested from its grasp by the likes of Google and Facebook. Upon taking up the mantle at the ailing company, many saw Mayer's streamlined policies, redesigned logo, and rising stock as a glimmer of hope. But the success of her early tenure has given way to a recent patch of lackluster performance. Yahoo finds itself struggling to find a foothold in the competitive field of web based advertising. Many investors and news outlets have begun to turn on her, complaining that her myriad of strategies has yet to deliver, and that she may not be the golden child that they were promised.
The skeptics are wrong. The former Google exec with a flair for drama still demonstrates that she is an extremely valuable asset to the company. Yahoo’s founder, David Filo, reminisced to Wired in 2014 about the company’s heyday, “We tended to hire people passionate about building new web services and products. (Mayer) has come in and reinvigorated that.” Filo is the glue keeping company morale together, and his opinion speaks for all of Yahoo.
Yahoo initially ran into trouble because it's advertising never grew out of its dated roots, while its competition (Google and Facebook) pioneered innovative concepts and designs in advertising. Yahoo plowed ahead for years with the same dogmatic banner ads that make people's blood boil as they scroll to the comment section, and so Google and Facebook took over the advertising game by acquiring startups, which pose a wonderful opportunity for behemoth tech companies looking to spur innovation. Google has purchased 187 startups since 2001, while Facebook has purchased 56 since 2005.
Fortunately, this is an area where Mayer excels. During her tenure, Yahoo has snapped up about four dozen startups. If Yahoo is looking to inject fresh ideas into the company’s boring diet of search engine woes and advertising dogma, then Mayer’s strategy is the place to start. Already, Yahoo has seen advancement as the introduction of native advertisements has bolstered advertising revenue, and in 2015 proved the only division of Yahoo advertising to display growth.
What's currently hurting Yahoo is the Alibaba IPO. The Chinese competitor to Amazon went public in late 2014, causing Yahoo to sell its tremendous stake in the immensely valuable company. For years prior to the sale investors exploited that stake in Alibaba, since Yahoo was the only conduit through which investors could tap into the Chinese company's profits. Once the company went public investors had no reason to cling to Yahoo, so they sold their shares, and Yahoo stock dropped like Ronda Rousey in the second round. But let's be realistic, Mayer couldn't stop Alibaba from going public, and she couldn't stop those who invested in Alibaba from leaving.
So let’s all ease off of Mayer for a bit. Give her time. She's instituted good policies, as she continues to scout new talent and implement new advertising strategies. Mayer stopped the train, now she’s just got to get the darned thing back on track.
Reach the columnist at sdeadric@asu.edu.
Editor’s note: The opinions presented in this column are the author’s and do not imply any endorsement from The State Press or its editors.
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