Marissa Mayer's hits and misses during her first year at Yahoo
Since assuming the role of CEO in July 2012, 37-year-old Marissa Mayer has promised to breathe new life into Yahoo, and to make it the most popular site on the Internet. With her foresight and unorthodox decision making skills, along with her keen eye for spotting talent, Mayer is slowly gaining the trust of the company’s stakeholders, and is on her way toward assuring profit for them. Some of her decisions have been lauded, while others have been met with harsh criticism, even from her compatriots. To err is human, however, and examining what she has done right and where she has committed a mistake will lead to a greater understanding of her management style and long term plans for Yahoo. When Mayer became CEO last year, she also announced to the world that she was pregnant, immediately earning many pats on the back for daring to juggle motherhood and work. Detractors lashed out, suggesting that she choose one or the other, since she could not possibly manage both. Mayer responded initially by returning to work only weeks after giving birth to her son. She then went on to build a nursery for him next to her office, and banned telecommuting, i.e. working from home. This decision shocked and angered the hundreds of Yahoo employees; especially work from home mothers, who immediately pointed out the unfairness of the decision. The debate is still on over whether she did the right thing, since a number of those employees had been with the company for close to a decade, and would have been easier to work with, given their familiarity with the company. Mayer’s next decision involved trying to silence the criticism and promote her policy of reporting to work, by providing free smart phones, free meals, and special leave for expectant parents. Her latest decision to acquire popular micro-blogging site, Tumblr, raised eyebrows, although her objective behind it appeared reasonable enough when explained. Acquired at a cost of $1.1 billion, this move is expected to increase Yahoo’s visitor traffic, and increase its earnings from ad revenues. With her eye firmly on the youth market, Mayer went on to acquire 12 more startup companies including Loki studios, a game developer, at a cost of $1 million each. Gaining a stronger foothold in the mobile and mobile applications market involves new developments, and here, Mayer’s strategy is clearly represented. Looking at the popularity of rival company Facebook’s associations with Instagram and Zynga, it is clear that she wishes for Yahoo to have the same response and growth. With Yahoo stocks rising to 28% from 16-18%, and its successful Q4 2012 report which showed $1.22 billion in revenue, it appears that Mayer’s decision-making is already showing results. Her decision to sell Yahoo’s stock in Alibaba brought in an inflow of $7.6 billion, which is now being invested in various acqui-hires and payouts to stakeholders. The numbers of mobile users, has increased from 200 million to 300 million, and true to her mobile-first strategy, the newly acquired companies are hard at work producing masses of content, which can easily be accessed on multi-platform smart phones and tablet devices. Mayer’s efforts have not gone unnoticed by employees who initially left, angered by her changes to the company’s policies. Up to 14% of Yahoo’s new hires are “boomerangs”, or former employees who have rejoined and are now being involved in morale-boosting processes within the company. From the beginning, Mayer has clearly stated that she intends to move forward in “short sprints” in order to ensure long-term sustainability for the company. Sudden upward jumps are not part of her plan; she is the proverbial tortoise who is occasionally criticized for not being a hare. However, true to the story, Mayer is slowly but steadily developing her own credibility as an effective leader, and is winning praise for showing profit in less than a year, a feat not achieved by the 5 former “revolving door” CEO’s before her. While some of her strategies have been heavily critiqued, the long-term impact of her most hyped “mistake” [the telecommuting ban] seems to be wearing off as the positive effects of it are showing in terms of profit. Mayer as a strategist therefore, knows what she is doing, and will certainly meet her goal of taking Yahoo to the top of the online world.