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Marissa Mayer and the Case of the Yahoo “Curse”

Yahoo is one of those legendary companies that has existed for quite some time — nearly 20 years, in fact. And for many, it’s been known for at least a few things including being an iconic old school search engine, its acquisition sprees, co-founder Jerry Yang, and a steady stream of ever-changing Chief Executive Officers. It has a rather complex identity problem and needs to find some way to redefine itself. That’s where Marissa Mayer comes in — or at least that’s what investors and supporters thought in 2012.

Mayer’s selection as the leader of Yahoos was meant to herald in a new era within the company, one that has seen its morale practically decimated after years of losing market share to Google, failed innovation from past leaders, and just overall bad decisions. She was viewed as a savior…wasn’t she?

This is the subject of Business Insider’s Nicholas Carlson’s book “Marissa Mayer and the Fight to Save Yahoo” which was released this week and is definitely worth reading regardless of whether you’re for or against Yahoo. This 327-page book dives deeper into the company than just looking at who Mayer is and what she can do to “save” the company (if anything).

Well-thought out narrative

marissa-mayer-book-coverCarlson has wisely broken out this book into five key parts. The first is where you read about one of the most discouraging days in Mayer’s tenure as CEO where she held one of her (in)famous FYI meetings at Yahoo and responded to anonymously-submitted questions by reading a book entitled “Bobbie Had A Nickel“. Then, almost like you would see in a movie, a flashback of sorts happens that takes you back in time to the founding of the company and you’re invested in its history, starting from its original name of Jerry’s Guide to the World Wide Web to include fundraising, its public offering, meeting with Softbank’s Masayoshi Son, and the continuous turmoil starting with its first CEO.

Readers will find out all the politicking and backdoor deals that were done within the company while also discovering how Yahoo responded to attempts to crush Google after incorrectly passing on acquiring the company for $1 million, failing to acquire Facebook, opposing Microsoft’s acquisition bid, and other decisions.

Part two of Carlson’s book is a profile about Mayer. It’s very similar to the unauthorized biography he published in 2013 on Business Insider, meaning you’ll see a lot of the same stuff, but this goes deeper into helping you understand the personality of Mayer and how she thinks. While industry insiders may think that she’s talented, there’s a little bit “method to the madness”, so to speak. And it’s served Mayer well. Readers will see how successful rise to the top at Google, putting user experience as a critical element in Google’s dominance, but also will understand how she fell from grace and ultimately sought new challenges elsewhere, namely Yahoo.

marissa-mayer-hope-poster

Marissa Mayer puts both Yahoo and Mayer herself on parallel tracks before you get to the third part where worlds collide. And when that happens, you’ll get a better view about just who’s to blame for the company being in its current situation. But it’s definitely not rainbows and sunshine under Mayer’s tenure. She had a good start turning the company around — within her first year, it would appear that Yahoo was turning the corner and becoming focused once again. But later on, Carlson highlights significant mis-steps in Mayer’s leadership, including the hiring (and firing) of Chief Operating Officer Henrique De Castro and also her performance review system (QPR).

Lastly, the fourth part examines whether there’s a chance for Yahoo’s success, starting with a chapter aptly entitled HOPE. The remainder of the book looks at Mayer’s struggle to revive one of the iconic technology companies that have survived to this very day and restore it to its former glory. But again, her path isn’t an easy one as she needs to deal with constant resistance from not only investors/shareholders, but people on the board, advertisers, and the public who find better opportunities with competitors like Google.

Can she succeed?

The problem isn’t Mayer’s alone

Throughout the many CEOs that Yahoo has had, problems have constantly persisted and eventually the company has lost its direction. At the very beginning, it was a place to find information throughout the Web. But soon it stretched itself too thin and was then forced to find ways to cut costs to improve its bottom line. Time and time again, it was plagued by issues, concerns, and demands from activist investors and shareholders. Whether for better or for worse, Yahoo has never had a moment’s rest.

So it’s easy to blame Mayer for these issues because she’s currently sitting at the helm, but these problems will not be solved in the next quarter. Yes, there are really significant issues it needs to address, including the fact that its core business is a small amount compared to its investment in Yahoo Japan and Alibaba, but this isn’t something you can fix in an hour. As Bloomberg columnist Katie Beener wrote this week:

“What’s most interesting about the Mayer critiques and defenses, including mine, is that they’re largely sideshows. Pick Mayer apart or build her up. Either way, the Yahoo tanker would be hard for anyone to turn around.”

“Mayer or no Mayer, investors would still fret about the future of the company and its stock price. This year Yahoo will divest its treasured stake in Alibaba, the asset that fueled Yahoo’s remarkable stock surge during the Mayer years. When Mayer became CEO in July 2012, the stock was trading at $15. Now it is at $49, thanks largely to Alibaba’s performance. Once that asset is gone, Yahoo’s core problems will infect its stock price.”

The issues affecting Yahoo stem from decades of problems within the organization and mis-steps. But the honeymoon for Mayer has certainly ended with the dominating IPO of Alibaba. Mayer has shown she has ideas and has made numerous acquisitions over her short tenure. So time to put that plan into action and right the sinking ship. I think that Yahoo is on the correct path but it will depend on what Mayer’s next steps are that will determine whether corrective action is warranted or she’s replaced. And the wolves are certainly at her doorstep, namely a firm named Starboard.

Read it to believe it

If it wasn’t a real company, it would seem that Carlson’s Marissa Mayer would be something straight out of a primetime drama on television and it’s probably easy to see it turning into Yahoo’s version of The Social Network. Suffice it to say, Carlson has cast Yahoo in a new light: one that doesn’t know itself and needs to discover it now. After two decades of existence, it’s astonishing that things have moved so slowly with the company and it’s fallen behind Google and many others that started well after it IPO’ed. Mayer’s agile development skills from her time at Google may breathe a new life into the company to help accelerate development, but will it be enough? It’s still struggling.

After reading Marissa Mayer, one thing that I thought about was how much of this was true. While it might seem to be believable (and it in fact might be), but you wouldn’t begrudge me a little bit of skepticism that not all of it was 100 percent true. But regardless, there’s one thing that is undoubtedly the truth: Yahoo needs help.

When it’s all said and done, I really enjoyed reading Nicholas Carlson’s book. It’s a page-turner that I refused to put down, even though at first it looked massive. To say the least, the information contained in the pages was entertaining and worthwhile while also giving me a whole new impression about Yahoo.

Photo credit: Marissa Mayer at Fortune’s Most Powerful Women Dinner in 2012 by Don Feria/Getty Images via Flickr; Marissa Mayer HOPE poster via Business Insider

Published in Book Review Case Studies Featured Headline Industry Analysis Yahoo