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Mayer hopes to brighten user experience at Yahoo

Mayer hopes to brighten user experience at Yahoo

By Nicole Perlroth, The New York Times | Updated: 17 July 2012 11:31 IST

It is as if there is a revolving door to the executive suite at Yahoo. So many have filed in and out over the years: Terry Semel, Jerry Yang, Carol Bartz and Scott Thompson. On Tuesday, Marissa Mayer, a Google executive, will join the company as its fifth full-time chief executive in five years.

Her challenge will not only be to resuscitate a struggling company, but to avoid the fate of so many other experienced executives who have run Yahoo.

With 700 million monthly users, Yahoo commands one of the largest audiences on the Web. But the company, an Internet pioneer, has been unable to attract advertisers and increase revenue.

The company continues to cede a greater share of the advertising market to competitors, notably Facebook and Google. The many chief executives have frustrated shareholders with a reliance on cutting costs to improve quarterly earnings reports rather than finding new areas for innovation and growth.

The basic problem: the executives have done little to reverse Yahoo's identity crisis.

Yahoo, while not a dying company, has struggled to stay relevant after it missed the two biggest trends on the Internet: social networks and the move to mobile devices as the gateway to information and entertainment.

That fact has not been lost on Yahoo's advertisers. Yahoo, once the biggest seller of display ads in the United States, ceded its crown to Facebook and Google last year.

While Facebook and Google enjoy a 16.8 percent and a 16.5 percent share of the online display ad market in the United States this year, Yahoo's share has fallen to 9.1 percent - a big drop from 2008 when the company's share of stood 18.4 percent - according to eMarketer.

Ms. Mayer's first task will be to articulate a vision for Yahoo. She was the first female engineer hired by Google, and she spent 11 years there perfecting Google's Web search, still the dominant search engine, and became its most recognizable public face. She confidently appeared at conferences, company product announcements and on network morning shows to explain innovations in search and Gmail. The clean look of the search engine was credited to Ms. Mayer's sense of aesthetics.

"My focus at Google has been to deliver great end-user experiences, to delight and inspire our end users," Ms. Mayer said in an interview. "That is what I plan to do at Yahoo, give the end user something valuable and delightful that makes them want to come to Yahoo every day."

In contrast to Google, Yahoo has no search engine. It turned over that business to Microsoft; people who go to Yahoo to find something on the Web see Microsoft's Bing. Also in contrast to Google, Yahoo's site is often cluttered and chaotic.

"Yahoo is getting more focused on products and with the new board - and direction of the company - the timing was right," Ms. Mayer said.

Most recently, Ms. Mayer oversaw one of Google's next growth drivers: location-based products like Google Maps and Google Offers. Yahoo has lagged in this area as well.

"She had a very instrumental role in creating the most powerful monetization engine in the history of the Internet," said Chris Sacca, a former Google employee, now an early-stage Internet investor. "I remember her ship as being the tightest run as well as the most rewarding for the members of her team."

Yahoo employees, Mr. Sacca added, "need a vision to rally around and a leader they believe can take them there. I think Marissa is that person."

Ms. Mayer, 37, also inherits a company that has been through considerable turmoil. Yahoo's board fired Ms. Bartz, an experienced former chief executive of Autodesk, in an e-mail last September. It then hired Mr. Thompson, a former executive with eBay's PayPal unit. But only four months into the job, Mr. Thompson was forced to resign amid questions that he had exaggerated academic credentials on his résumé.

Yahoo's board has also seen its share of turmoil. It recently added three board members, including Daniel Loeb of Third Point, the activist investor and second largest investor in Yahoo, who pressed to have Mr. Thompson fired.

The choice of Ms. Mayer surprised many analysts who had expected that Ross Levinsohn, the company's interim chief executive and former head of its global media operation, would get the job. Mr. Levinsohn acted as if he would. He had been interviewing candidates for top staff jobs as recently as mid June. Ms. Mayer said Yahoo's board first approached her on June 18.

Mr. Levinsohn was not available for an interview Monday after the announcement of the new chief executive.

Jordan Rohan, a securities analyst who covers Yahoo and Google at Stifel Nicolaus, said he was surprised Yahoo's board had chosen Ms. Mayer over Mr. Levinsohn. "I'm taking a wait-and-see approach," said Mr. Rohan. "She certainly has the intellect. She certainly has the desire, the drive and the credibility. But I'm not sure if the strategic direction of Yahoo is going to change from what Ross would have articulated."

Scott Kessler, an analyst with S. & P. Capital IQ, said he hoped Mr. Levinsohn would stay with the company but was optimistic about Ms. Mayer's prospects as chief executive. "Ross has the Internet-media-advertising experience, but she has what the company so desperately needed," said Mr. Kessler. "In addition to having a background at an Internet advertising company, she's also an engineer. She has deployed products. She's managed a business."

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