Marissa Mayer’s uphill battle to rejuvenate Yahoo continues
Ranked number 14 on Fortune magazine’s list of most powerful businesswomen in 2012, 38-year-old Marissa Mayer belongs in a league of young achievers who have attained top positions in some of the biggest companies in the world. As the current CEO of former Internet giant, Yahoo, Mayer is under constant scrutiny as she endeavors to revive the company and restore some of its former glory. A year has passed since she took on the arduous task of doing so, and while her latest investment in micro-blogging site, Tumblr, might be seen as unnecessary expenditure, it is clear that Mayer is a woman with a plan, albeit, one which is a cause for much speculation among investors and the public. Mayer promised her investors that she would not “screw up” her most recent acquisition, i.e. micro-blogging site Tumblr, and has recently paid its founder, David Karp, an additional $81 million in order for him to remain with the company for another 4 years. This expense, along with the lack of confidence as to whether Tumblr will bring in profits for Yahoo, has not gone down well with investors. Originally perceived as an ad-free space, Tumblr is now filled with ads on behalf of Yahoo, which may reduce the number of users. Whether or not profits will be made from the investment in Karp/Tumblr remains to be seen, and apart from Mayer, most seem to see this as a waste of resources. Yahoo’s revenue too, is not doing very well and has fallen by 7% since Mayer took over. Its core search market has fallen by .5% to 11.4%, while search engine giant, Google, continues to control over 67% of the market. Mayer continues to remain enthusiastic and committed towards turning mobile applications for smart phone devices into profit-makers for Yahoo. She is a believer in terms of creating quality, customizable content for users, and has assembled a team to ensure the same. Acqui-hires such as Adam Cahana, whose startup company, IntoNow, was acquired for $20 million by Yahoo, is one such individual whose job involves turning the tide in Yahoo’s favor. Together, Mayer and Cahan have invested $200 million in acquiring 18 additional startups; the clear objective is to create mobile content based on Yahoo’s commonly used web services, which will go “viral”, i.e. attract hordes of loyal users, which will, in turn, boost Yahoo’s visibility and profits. Over the past few months, Cahan and team have released new applications for Yahoo Weather, Mail, Fantasy Football, and photo-sharing service, Flickr. A rejuvenated news-reading application has also been released, which integrates technology from Summly, a freshly acquired company that uses text-summarizing software in order to abridge written content. As per reports from Yahoo, the increase in traffic for Yahoo Mail, Yahoo Weather, and Yahoo’s news app has increased by 120%, 150%, and 55% respectively. Yahoo’s research organization is also being rejuvenated through the hiring of 50 Ph.D.s, 30 of whom have already been hired by Mayer. While critics appear to have little or no faith in Marissa Mayer’s ability to turn Yahoo around in a profit-making direction, Mayer herself has shown unwavering faith in her own abilities, and is constantly working towards infusing new blood and fresh ideas into the company through her various acqui-hires and makeovers on existing applications and services. Only a year has passed since she assumed the position and responsibility of CEO, therefore it is fair to state that more time needs to pass before her plans will actually bear fruit. Keeping the faith and constantly moving forward seems to be the best way to move forward.