Marissa Mayer, Yahoo!, and the Google effect

May 28, 2013

    Marissa Mayer

    Mayer goes Yahoo!

    While many would be exceedingly happy with the position she held at Google, Mayer was ready for change. As Yahoo! floundered, and removed their CEO from power, Mayer became the perfect choice to lead them. Some were taken by surprise with the move, but they shouldn’t have been. Well known, well liked, and well versed in the industry, Mayer has all the proper tools to lead.

    As Yahoo! wants for direction, Mayer is poised to offer it. If one thing can be said of Mayer as CEO of Yahoo!, it’s that she learned a thing or two from Google. While decisions like the one to no longer allow employees to work from home have been met with heavy criticism, the reasoning for such a shift tells us more. The hiring process at Yahoo! has also changed, becoming more rigorous. The focus at Yahoo! is clearly shifting toward mobile, where they have a huge opportunity.

    Those changes are similar to Google’s own structure. The environment at Google is collegial, and welcoming. The focus on mobile is clear, and the hiring practises thorough. The question is whether Mayer is trying to beat Google at being, well, Google.

    Acquired target

    Mayer spent a lot of time at the Google dojo, seeing first hand that smart acquisitions pay off. Even with a $1.1 billion price tag for the blogging site Tumblr, that move is a smart one. The demographic is young, and it’s a brand new stream for ad revenue. Tumblr is many things to many people, but also highly social. As Mayer was privy to the genesis (and genius) of the Google+ social layer, and the perils of doing it wrong (Orkut), she undoubtedly sees the upside for Tumblr as it relates to Yahoo!’s bottom line and overall scheme.

    Hulu

    News that Yahoo may be interested in Acquiring Hulu also lines them up against Google, this time with the YouTube juggernaut. While Hulu has a trump card with their programmed content, YouTube is a big target that is not easily hit. With so much user generated content being uploaded daily, YouTube simply can’t be toppled. They can, however, be edged out of certain areas they’ve not explored.

    As the television industry changes, Hulu is in a good position to capitalize on a new type of subscription model. Having already been established as a pay-for-content service, the brand can withstand such a transformation to a channel subscription model. YouTube may not be so lucky, even though they’re currently dabbling in that realm. Pricing and positioning will ultimately win, and Hulu is currently in a much better position.

    Smart buys?

    Mayer made one very slight snafu in obtaining Tumblr: she promised a positive gain, almost immediately. Promising investors that Tumblr will contribute positively to the bottom line right away is bold, and perhaps misguided. Yahoo! should be focussing their energy on making Tumblr a destination, not expecting it to reap dividends for them straight away. It also sets a precedent that a Hulu acquisition would need to mimic, and that’s a tall order.

    One thing Mayer hasn’t picked up on is Page’s willingness to lose. Google acquisitions have a very visceral tinge to them, and almost all are done so with the understanding that what they do will be cobbled into a Google service. That growth model almost never shows immediate gain, and Page is okay to lose for a little while in the interim. The greater overall health of Google Is much more important than turning an immediate profit.

    Yahoo-Logo-w630

    Winners without losers

    A thread of desperation still runs deep at Yahoo!. While Tumblr is a good buy, it’s nowhere near as through or well received as Facebook or Google+. What Yahoo! really bought was users, and the roots they’ve put down at Tumblr. The revamped Flickr, and staggering terabyte of free storage space, will attract many to the site. Hulu would be similarly attractive: loyal users, and a new audience for ads.

    Modelling Yahoo! after Google is wise. Mayer is taking what she learned from an exceedingly successful startup, and applying it to a company that needs to act like one. Whether or not Yahoo! employees subscribe to her “no working from home” policy, it means culture. The new-look Tumblr is really nice, and translates well to mobile. These are topics Mayer is comfortable and well versed in, and she learned from the best.

    The issue may end up Mayer herself. She’s a climber, dead set on winning. Her attitude and drive got her where she is, but tempering it would be wise. Yahoo! can’t out-Google Google, no matter how much they may want to. So long as Mayer understands that she isn’t bigger than Google this time around, things will be just fine.

    Comments

    • mjolnirxz

      I really enjoyed this article, thanks. I also hope Yahoo! would do better, as much as I love Google, competition is always good

    • idontusuallycommentbut

      Good read!

    • http://www.facebook.com/Trent8381 Trent Richards

      Interesting read. Thanks

    • gommer strike

      She’s beautiful. I’m sorry guys, but that’s how I feel.

      • levin

        if that’s the case, yahoo can put her photos in their front page.
        I’m sure it will increase traffic :D

    • Piyush

      yahoo became sleeping giant due to bad managment in corporation , but now she is trying to wake it up.

    • End in sight

      Yahoo will fizzle out over time. They are slowly dying and I for one say good riddance. Most firms die eventually, and some take a long time to do so. Yahoo should die quicker.

      Mayer is a winner and she wants to be in a winning company. She had that chance at Google and she’ll only stay at Yahoo as long she feels she can make it win. Once she realizes that there is no way to revive the dead-end firm she now works for, she will resign.

    • http://twitter.com/irismtleung Iris Leung

      Great article! Small mistake though in the second line: “With Meyers at the helm…”

    • Rooney-

      OMG!!! Yahoo is still alive!! Let me google about it!

    • http://twitter.com/lukamlinar Luka Mlinar

      First of all Page doesn’t need to go to war with Yahoo since Yahoo already lost long ago. Secondly, if there was any big future in Tumblr and Hulu Google would have bought it already. This is not the direction the internet is going. Tumblr will continue to work well but never expand. Hulu could expand but can’t. The name is synonyms with a phrase: “this content is unavailable from your location”. Which is everywhere except the US. Bringing that content in full to the rest of the world, on a same scale is an impossible mission. I just see a woman that tried to be a captain of a ship she didn’t own. Safe bet would be that she will continue with her practice of trying to bite of more then she chew. Regina Dugan, now that’s a lady worth writing an article about.

    • APai

      she sure did screw flickr. Flickr would have been best standalone, for a while it was okay, then it stagnated. with mayer – it just went to the dogs.

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