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Yahoo! stock rose two percent in after-hours trading off the back of the announcement that former Google “first 20” employee, Marissa Mayer, has signed on as the new CEO. The person responsible for what was rumoured to be 20-25% of Google’s workforce also designed the look and feel of Google’s iconic homepage and had a hand in cornerstone projects like Gmail. Let’s look at some pivotal discussion points surrounding the move:
1. Mission accomplished
In Google’s management shakeup of October 2010 Mayer was moved off of Google’s most important product (search) and placed into “Local”. Even though it put her in charge of more managers and different parts of the business, the move was largely seen as horizontal.
It’s with that in mind that we can consider Mayer’s mission at Google accomplished: she started out as Google’s first female engineer, managed a ton of products including image, book and product search, toolbar, iGoogle, Google News, and Gmail and she was credited with creating much of the look and feel of Google. It’s no surprise that Mayer jumped ship for a greater opportunity.
2. It’s Google’s loss
Google is moving towards being “hyperlocal” — examples of which include the acquisition of Zagat; and the launch of Google Now — which sends relevant geographical information like train schedules to Jelly Bean enabled Android phones. One feels that Mayer had a massive influence and was an integral part of Google’s “secret sauce”, beyond the search algorithm.
3. Should Mayer be CEO?
In a controversial move, Ross Levinson, the interim Yahoo! CEO who was tipped to get the permanent role, didn’t. Mayer joined Google in 1999 and rode the rocket all the way to the top, amassing a fortune of US$300-million.
But is she someone who can turn a company like Yahoo! around? Reversing Yahoo!’s brutal decline would be an uphill battle for the most seasoned of turnaround specialists, never mind one who is pregnant (expecting in October) and thus has limited time at the helm. That said, Wal-Mart recently appointed Mayer to its board of directors — so there’s definitely an X Factor about her.
4. Yahoo! needs focus
Mayer is widely renowned for her use of data to make decisions. Every product she had her hands on at Google was split tested to ensure it was up to scratch. She needs to apply that same principle to Yahoo!: She needs to decide if it’s a search, content, advertising, product or combination company. If Yahoo! is to become a product-focused company, then there’s no better candidate to lead that than Mayer.
Are the above reasons enough to buy Yahoo! stock? Yahoo! is a massive and complex corporate beast that sits in stark contrast to the old Google flat structure that Mayer is accustomed to. Insiders also say it is marred by politics and is extremely hard to navigate. More tech companies fail than are turned around, but we have Apple as a key example of a company in peril before it brought back Steve Jobs — and look at it now. The big question is whether Marissa Mayer can be that monumental figure for Yahoo!
Image: Adam Tinworth