Searching for upturn in results at Yahoo!

Having defected from Google to head up its struggling rival, Marissa Mayer faces a daunting challenge to revive moribund tech giant Yahoo!, but her first set of quarterly results gives some cause for optimism, writes Kyran Fitzgerald

MARISSA Mayer was one of Google’s earliest appointees, the 14th person to join the company, and she rose to become a key member of the company’s inner circle.

In July, she defected to run Google’s struggling rival, Yahoo!, and caused a bit of a sensation in the technology world.

In the process, she became the youngest female head of a Fortune 500 company. Alongside chief executive of Hewlett Packard Meg Whitman, Sheryl Sandberg at Facebook, and IBM’s Virginia Rometty, she is among a small band of women at the top in Silicon Valley.

However, many wonder whether she has quit the frying pan at Google in favour of the fire.

So can Mayer overturn the odds by reviving a moribund tech giant, emulating to an extent the achievements of Steve Jobs at Apple in the process?

Search engine company Yahoo! bestrode the technology scene like a colossus back in the 1990s. It perfected new methods of searching for information across the fast-expanding worldwide web.

In Jan 2000, its share price peaked at almost $120 (€92.8). A darling of the dotcom revolution, Yahoo! could do no wrong.

But by Sep 2001, as the tech bubble burst, the share price had plummeted to just over $8. It was a dramatic implosion in a year of implosions — and explosions.

Yahoo! did stage a recovery in the middle of the last decade, before resuming its long-run decline, a fall that has gathered speed amid the ever-tightening grip on the search business of Google, a company founded as recently as 1999.

In July, Yahoo! appointed as new chief executive the 37-year-old Mayer, holder of a degree in artificial intelligence from Stanford University.

This week, Yahoo! announced its latest set of quarterly results — the first under Mayer’s reign. The markets extended a cautious welcome to the figures, though analysts make it clear that it is far too soon to judge the new chief’s performance.

There are many who will be rooting for Mayer, a persuasive speaker and highly effective manager, as she sets out to reverse years of decline and internal turmoil. She is the latest in a long line of chiefs at the troubled company. Two, including an interim CEO, came in rapid succession in the past year, during which a new round of layoffs was instituted and 2,000 people, one seventh of the workforce, departed.

Mayer has identified the need for a total change of culture in the organisation.

The new CEO’s net worth is estimated at around $300m (€232m). Husband Zachary Bogue is a venture capitalist.

Mayer recently returned to work a week after giving birth to a baby boy.

She grew up in a small town in Wisconsin. Her mother was an art teacher, her father an engineer. “My career is a blend of engineering and art,” she has said.

As she recently told the LA Times, her period as a teenage grocery clerk helped develop within her a strong work ethic. She learned to memorise prices, while admiring experienced colleagues who could check out 40 items a minute at the till.

MAYER enjoyed a comfortable upbringing. Strong in maths and science, her initial plan was to study medicine, but work as an intern at Stanford redirected her towards computing. She left college keen to market herself as a software engineer.

Soon after, she was interviewed for a job by Google’s Larry Page and Sergie Brin, who peppered her with questions about artificial intelligence. They quit the interview in mid-stream to go off and make a pitch to some venture capitalists.

Mayer notched up strong achievements during her 13 years at Google.

By 2006, she was travelling the globe for the company. Behind the scenes, she had already played a major role in the redesign of the Google search engine.

That year, The Guardian described her as “Google’s geeky queen of the searchosphere”.

At the Edinburgh TV festival, she argued that the TV industry should view the web as a friend. “The internet creates more of an appetite for media — it doesn’t replace physical books, radio or TV.”

This benign view would be tested close to destruction in the downturn that soon followed.

Last July, Forbes magazine praised Mayer for her passion and her speaking and motivational skills.

One of her techniques as a manager is to welcome subordinates into her office, where they can spend a few minutes offering feedback on projects, or pitching ideas.

One of her first moves at Yahoo! has been to appoint a new HR director.

Employees are being offered free food and tech kit as part of an effort to persuade them to stay on late, working on projects.

But analysts will be watching like hawks to assess what tangible measures have been put in place to turn the good ship Yahoo! around.

Yahoo! just announced the purchase of Stamped, a small developer of apps for smart mobile devices.

In a recent interview on YouTube, Mayer agreed that “it is all about mobile”.

When questioned about Yahoo! in a 2009 interview, she suggested that the company “lost a lot of good people and they lost their focus”.

Some critics indeed believe Yahoo! failed to concentrate sufficiently on engineering, opting to spend heavily on new media dotcom acquisitions.

Hiring talent is at the top of Mayer’s agenda, and much of the focus is on a redesign of the Yahoo! homepage, with fewer ads and links out.

Mayer also made a big contribution to the successful design of Google’s home page.

There is likely to be a focus on key product areas including Yahoo! Finance, Yahoo! Sport, Mail and the IntoNow mobile TV app.

Yahoo! may be struggling, with a small and falling share of the search market, but it remains relatively cash-rich, with around $2bn in cash and saleable securities, and the option to realise billions more through a sale of its stake in its Japanese business.

Analysts suggest there is likely to be a renewed commitment to the development of ad technology.

The company enjoyed revenues of $1.1bn in its latest quarter, but sales have stalled. !

SO why did Mayer make the jump to what appears to be a listing, if not a sinking, vessel? It is being suggested that she had run out of options at Google, where she had been passed over for promotion to senior vice president.

The Yahoo! challenge is enormous, but Mayer could just possibly be up to it.

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