Yahoo! Turning a new leaf w/ Marissa Mayer…


While Marissa Mayer’s recent coronation as Yahoo’s CEO is still fresh in everyone’s mind, let’s take a look back at how Yahoo!, the “premier digital media company” has evolved over time and where it is/ should be headed. After all, the next best thing that you can do when not in Marissa’s shoes is to send her some unsolicited advice!

Yahoo.com was just another personal website that Jerry Yang and David Filo put together in 1994 when dotcom as a business model was still nascent. With a bit of ambition and dare, these young entrepreneurs turned this website into a brand name and made it unique by adding several feature filled updates. Soon, it grew to be the anchor of any internet traveler and was successful at becoming home for many such travelers, 700 million and counting.

During the dotcom boom and bust, competition grew and there were several other websites competing in the unique feature space with Yahoo. The business model had to evolve. Diversification set in and Yahoo tried to be everything to everybody. What initially started as the one stop aspirant for the internet traveler started looking at serving every niche they could get into, be it e-mail, search, news, finance, service provision, TV/ movie listings & reviews, games, personal and so on and so forth. As a result, growth and acquisition of complementary and non-complementary businesses set in. Yahoo looked at creating feature rich additions to the already burgeoning Yahoo list of properties hoping to ensure user stickiness and more ad revenue while in actuality it seemed to lose direction of its core business and as a result started slipping in the numbers game. Recently, 5 people have traded places as the CEO of Yahoo, with Marissa Mayer in the driver’s seat now.

Today, Yahoo is a big pile of properties, some viable and with promise in a highly competitive internet world that is changing so rapidly that by the time you take a breather and refocus, the focus that was there has shifted way beyond.

Marissa Mayer has her task cut out for her and based on the first couple of baby steps she has taken; free food and Apple iphones for all employees, she is beginning with rejuvenating employee morale while weaving the fabric of camraderie and pride in Yahoo among them. This will eventually have long term benefits while setting direction toward the future for developing Yahoo into an organization that is prepared for 2015, 2020 and beyond.

First things first; in order to rebuild a world class company, it’s imperative that every contributor viz., employee and associate has a sense of ownership and pride of belonging to the best of the breed. With her first steps, Marissa is headed that way.

The most fundamental principles of getting a company back on track are at work here. The need to refocus on core competencies, identifying and embracing them and having teams work with their heads down to produce results in the next several months is vital. A strategic refocus as to where the future of the internet is headed with cloud computing and mobile technology at play in the virtual world is set to happen.

At the same time, the vast majority of Yahoo properties have to be sifted through with due input from the employee & customer base; to identify what should stay and what should go. This needs to be in alignment with the strategic focus of the future, which again has to be in step with the core competencies at the heart of the company. It is to Marissa’s advantage that Yahoo is sitting on a huge cash pile to dispense as needed; one less thing to worry about as planned execution begins.

Next in line, is the constant need to innovate; to gain strides over the competition. Disruptive innovation in a cash rich environment seems attractive but evolutionary focus can help too. Not to say that moving away from current core competencies is a bad idea if they are archaic, but it will eventually happen as the focus on future term strategy gets clearer. This is especially true of a company that is surfing a highly dynamic environment and is on the downward trend of the bell curve. New core competencies will evolve and embracing such will only allow the organization to flourish. History has shown what happens with divergence unrelated to core interests. Reinvention is common among organizations poised for growth but it needs to occur after strategically defining the reinvention path as the new path that the organization will adopt as its core. I believe it’s a fundamental law of business in order to succeed.

Yahoo’s business model has been primarily dependent on advertising revenue. As Marissa Mayer takes it from being just an internet information provider into the intricacies of being the internet juggernaut of the future (with predictable sprinklings of cutting edge mobile & social media offerings coming in the future), we can expect Yahoo to gain back some of its online advertising ground that it had previously lost as well as can look forward to new modes of revenue generation.

If previous reputation is anything to go by, Marissa had a reputation of getting things done and inculcating her own sense of style at Google. She is seen as a highly independent & efficient person who pays special attention to detail and is very involved with aesthetics as well. Dealing with Yahoo’s day to day management is one thing and pushing the Board of Directors to get on her bandwagon will be another that currently, she seems to be in control of.

With her background in Computer Sciences and her hands on experiences building over 100 products at Google, I am sure there is much she can do in terms of providing that technical edge to steer the Yahoo ship in the right direction.

Lastly, to reiterate the obvious, the most important thing is to keep the employees and customers close to the heart. What are they saying? Where are they headed? What do they want to see different? Where are the new markets? What does the new market want? This feedback will play a pivotal role in shaping the Yahoo! of the future.

Here’s wishing Marissa Mayer the very best as she steers her employees to say Yahoo! at work, her customers to say Yahoo! for all that they deserve and get; and her Shareholders to say Yahoo! all the way to the bank!

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