Once Upon A Time...
In 1975 Marissa Mayer was born into a middle class home with two working class parents—far from the glamor and glory of a yet to be born booming Silicon Valley. A small-town girl from Wisconsin, her first job was not designing a computer or electrical circuitry, but working at a local grocer as an inventory manager during high school. (Although she was highly exceptional at school in math and science, she was day-to-day far from living the life of the prodigy we are familiar with today’s start-up CEOs.) Taking ballet lessons, baking brownies, ice skating; just a small town girl, with ambition. However, the significance of these humble beginnings would become forever more important from this seemingly simple and typical childhood, one of the world’s most powerful executives arose. The upbringing of Marissa Meyer would transform into an American Dream consummate, despite the criticisms American meritocracy has received with the seeming fall of the American education. Meyer’s journey to unprecedented success did show first glimmers when she entered Stanford University.
Beyond the Ceiling
Four years after admission she graduated top of her class. Her excellence served her well as she entered a nascent, but potentially ground-breaking, Google, as its 20th employee. She was Google’s first female engineer, making headway into an industry dominated by otherwise maybe not macho but still male personalities, paving the way for more women to rise up in the field. Even then she was seen as proof that, no matter your gender, the Silicon Valley valued talent.
However, by no means was Meyer’s time at Google insignificant. Part of what Google is today is because of Meyer’s work at the company. Through her crucial and momentous work on nearly every Google product: Search, Images, News, Maps, Product Search, Toolbar, and Gmail, she rose from an engineer, to designer, to product manager, and soon enough one of the top executives at Google. From this position, she oversaw the design of the Google homepage, cementing her place as not only one of the most powerful female executives in the industry, if not the world.
Super Nerd to Corporate Protégée
Since starting at Google, her central influence on Google’s hallmark products as well as her charismatic persona, both in boardrooms and in the office, gained her notoriety for efficiency and played a role in her selection for Yahoo’s top spot as will be discussed later.
Especially, Meyer’s move to an executive position in Google brought her nomers such as “the face of Google” or “Google’s glamour geek”. Vanity Fair magazine called her a business superstar and a cultural icon. The nicknames are well founded as one of Google’s longest serving and most famous executives.
Yet, probably the most reflective aspect of her “super ego” is her role in the projects she has worked on. Marissa Mayer is a “product person” in the eyes of the reigning people in Silicon Valley. In the last decade and a half of innovation, she has attempted to create products that people want to use, not products that people have to use. She is noted to have superhuman energy in executing such visions, pulling 250 all-nighters in her first 5 years at Google, according to employee records, yet never burning out.
Google colleagues have described her as surprisingly articulate in a sector of geeks with the “qualities of a programmer and a humanist.” Accordingly, she has captivated the media, often stories concerning her work have been centered around more on Marissa Meyer the person, and less on Google. She has been seen at times as totalitarian to those who worked for her and it was very clear that she protected her team, but if you were not on her team, well then, as she put it, “she may not play as nicely”. This was seen in policies such as her often machiavellian human resource protocols of cutting employees who were peer-reviewed at the bottom: omens of her coming policies at Yahoo?
While, Marissa Mayer’s transition today maybe an accepted reality, the fact is she wasn’t at first the likely choice. When the search for a new Yahoo CEO was underway, the then interim Ross Levinsohn was seen as a natural successor
and Marissa Mayer, seen as the most radical yet capable talent, was invited to take on the future of a $300 billion rich, yet troubled, Yahoo asset network. It is important to note that in Silicon Valley and the industry in general, Yahoo is at this point a somewhat of a fading giant. (While a major victory for Mayer, it is also a great burden.) Some are already saying the Yahoo board may have made a mistake in bringing in an executive known for stepping on toes and going past shareholders. However, many say that the board knew the risks and was convinced by the profit incentive. The question that remains, however, is “what now”?
Hail to the Chief
Weighed down by mismanagement under a lack of visionary leadership present in competitors, and lost acquisitions and opportunities, Yahoo needs a change, and that change for the time seems to be banked on an experienced and tenacious Mayer. And with that idea in mind, Yahoo elected Marissa Mayer to become the youngest C.E.O of a Fortune 500 company.
After taking the wheel, Mayer despite Yahoo’s declining stock value, has managed to maintain the 700 million user base considered to be necessary for future growth: this user-base allows Yahoo to check their email and stocks, get news and answers, to shop and search the web. Yet Mayer’s Yahoo is still seen as barely staying afloat due to its many failed acquisitions and purchases. Partly it is due to the expanding market with megalithic companies like Google continuing to squeeze Yahoo out of the picture or possibly because of its erratic traffic or drift from its initial vision. But most likely it was due to the onslaught of all of these problems at terminal velocity in the business cycle. This ultimately leads to the question, what is Marissa Mayer doing differently in the face of this inheritance she has been given and has defined the earliest part of her tenure?
Marissa Mayer has been on a corporate “shopping” spree of mergers and acquisitions. During the first month of Mayer’s tenure, Yahoo purchased twenty startups, and still plans on spending $4.8 billion more on non-leveraged acquisitions alone. But what does this mean in terms of a greater business strategy for Yahoo? The fact is companies she acquired do not historically generate much actual revenue or profit, and yet she has bought many of these fledgling service providers, with little concrete assets, for millions and sometimes billions of dollars out of Yahoo’s own increasingly-limited coffers. The majority of the assets of which she has acquired from M&A operations are not the products but in fact the engineering, marketing, and social networking experts; in other words, Mayer has acquired a vast pool of talent. This is an essential input for a company that has been mired by a lack of innovation and vigor. Moreover, many of her acquisitions have been a cosmetic and tactically wise decision nonetheless. Although her 1.1 billion acquisition of Tumblr, a company which does not make much money, does not contain many advertisements, and does not have as large of a user base as nearly every other social networking site, it provided Yahoo with presence in the news and returned the Yahoo name to the field of competition--demonstrating to the rest of the technology industry that Yahoo can and will compete. It is both a benefit to public and investor confidence in a Yahoo that is in desperate demand for it as well as Mayer’s personal potential for longevity in the executive position.
Mayer’s strtegy may be best described as a very sensible maxim. It all goes back to the age old proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” By purchasing Tumblr, Mayer is increasing her short term gains, and adapting to the current economic environment that stresses ‘relevance’. But a few years from now, Yahoo would in turn need to buy another company if they could not find a way to their own innovation. That is why Mayer needs to acquire the experts from startups like Stamped, OnTheAir, or Alike-- all companies Mayer’s has picked up along the way.
It must be said that Yahoo’s acquisitions are not simply buyouts of competing young talent. Many of the acquisitions do provide an actual value benefit. Some of Mayer-directed acquisitions are actually quite impressive in their integration to already existing services. A prime example is Xobni: an add-on for email which helps to organize, search, and find contacts. The product was integrated into Yahoo mail. Another example is Bignoggins: a fantasy sports app for mobile platforms that will be integrated into Yahoo Fantasy Sports. Other acquisitions have been ones that put Yahoo at the forefront of new developments such as Qwiki: an iPhone app where consumers can create short films. Finally, a number of acquisitions by Yahoo aren’t necessarily ones proposed for the everyday consumer: instead additions to Yahoo operations or for special target audiences--a strategy that is residue of the pre-Mayer direction the company was already taking for a change. These range from Ztelic, a social data analysis startup, Admovate, an advertisement targeting firm, Lexity ,an app maker for small ecommerce businesses, and PlayerScale, a utility which helps game developers build on different platforms and add features like leaderboards and virtual currencies
In light of Marissa Mayer’s emphasis on aggressive overhaul, Yahoo stock price has doubled since Mayer has taken the helm. Profits are up. Usage of key services are up. So far so good seems to be the narrative amongst many Yahoo optimists. In the coming months and hopefully the coming years Mayer can translate these sentiments into stable growth. It’s imperative that Mayer does so or else.
The fact is there is no time for Meyer to be complacent. Revenue is continuing to fall with many business partners lowering their premium on Yahoo’s advertising space. The consensus among many commentators is that Yahoo, in its current state, is not one with a bright future and the profitability of the company is still under great doubt.
In the end, it is still to be seen as to whether Marissa Mayer can lead Yahoo to success in the way she contributed to Google’s ascendence. Her tenure will inevitably define her legacy in Silicon Valley. Views on the future are greatly divergent. Those in the industry mostly want Yahoo to succeed if only out of respect for its capacity. There is great expectation and need riding on Mayer’s success, but the bottomline is she was selected to fulfill that and most people at this point believe at least in her undeniable ability. The die has been rolled, the plays are under way, the future is for the taking: boom or bust.