Despite being one of the most recognizable brand names in the technology industry, it's been a rough couple of years at Yahoo! to say the least. From dwindling page views and the loss of its search crown to the recent issues facing its two former CEOs, the firm has struggled as both an investment as well as an Internet portal.
Analysts point to the fact that its previous CEOs have failed to recognize upcoming trends and consumer behaviors. Thus, its competitors such as Google have consistently eaten into the company's market share. The company has had five CEOs in less than a year, as the Internet portal tries to find a strategy to compete with new trends in social media. However, it may have finally found its muse. With the recent hiring of Marissa Mayer to position of chief executive, Yahoo seems to have gotten its mojo back on track.
SEE: Becoming A CEO
An Important Google Alum
Yahoo's once-dominant market share in display advertising continues to dwindle, causing the firm's revenue to steadily decline over the past three years. Enter Mayer. While most Internet users won't have any idea who she is directly, odds are they've seen/used the 13-year Google veteran's products and designs every time they've logged onto the World Wide Web.
As Google employee No. 20, Mayer was most recently responsible for the search giant's Local, Maps and Location Services business, which includes products like Google Maps and Zagat Guides. However, Mayer's most enduring legacy at Google could be the company's search engine homepage. Mayer was credited with crafting the distinctive Google "look and feel" across many products, including its minimalist feel. Ultimately for Yahoo!, Mayer's hiring can be seen as a big win for a number of reasons.
A Push Towards Products
First, Mayer's tenure as CEO could signal a new wave of growth at the beleaguered tech icon as it shifts focus. Previous interim CEO Ross Levinsohn insisted the company should continue to focus on content and advertising. However, given Mayer's engineering background, Yahoo! will most likely now focus on technology and products. Mayer has a history of understanding consumer tastes and when you focus on improving technology and products, you are able to confer with consumers.
A prime example of this was Apple during the 1990s. The tech giant struggled, until it was able to launch a series of hit products and support technologies over the last few years. Mayer will try and replicate a similar strategy at Yahoo!. Mayer has already begun the task of hiring an army of software and design engineers to execute that shift.
Confidence in the Brand
As one of the original employees at Google, Marissa is already a very wealthy woman. The Richest.org pegs the new CEO's net worth at around $300 million dollars. This fact is important in the sense that it shows confidence in the Yahoo! brand. Mayer clearly doesn't need this job, or any other job - especially considering the fact that she is pregnant. While her pay package will certainly be large, her willingness to abandon a successful, long-term career at Google is a big sign of conviction in Yahoo!'s future prospects.
Analysts predict that Mayer's decision to take a chance on the struggling tech company will inspire other top-notch Silicon Valley executives and software programmers to come along for the ride. That'll create a great new culture at the firm and lead to finally realizing the company's potential.
A Real Dealmaker
Mayer's intelligence is a real asset for Yahoo! Over the last few years, several of its CEOs have made poor deal decisions in regards to the firm's future. Founder and former CEO Jerry Yang, rejected a $44.6 billion bid from Microsoft Corp to buy the company outright back in 2008. Likewise, Carol Bartz essentially "gave the store away," when she signed a poor deal with Microsoft a year later, which stripped Yahoo! of its search engine roots. That deal outsourced Yahoo!'s search function through Microsoft's Bing software.
Coming from Google, Mayer knows just how important search is to Internet portals and how it drives revenue throughout the entire company. Odds are she won't make the same kind of mistakes her predecessors have made.
The Bottom Line
Former tech darling Yahoo! has struggled over the last few years as it tries to find relevance in the new Internet paradigm. After a series of high-profile losses and leadership changes, the company may have finally found its muse. The hiring of Marissa Mayer will ultimately bring forth some much-needed change at the firm.