There are so many intriguing aspects of Marissa Mayer‘s hiring at Yahoo! (YHOO).
However, what fascinates me the most is what the future strategic direction of Yahoo! will be under her watch and what this means for the company’s future relationships with Google (GOOG) and Facebook (FB) (not to mention Microsoft (MSFT)).
Presumably, Marissa already has the start of a strategic vision. And she said as much in a leaked memo yesterday:
The company has been through a lot of change in the past few months, leaving many open questions around strategy and how to move forward. I am sensitive to this. While I have some ideas, I need to develop a more informed perspective before making strategy or direction changes.
But, let’s get real… Marissa clearly has a strategy in mind for Yahoo! which she articulated to Yahoo!’s board last Wednesday when they took a private bus to a nearby law office to meet her in private. Here is a Reuters piece where someone from the board clearly stated they disliked Ross’ strategic vision:
Sources have said that [Ross] Levinsohn was committed to building out Yahoo’s own video programming and striking more syndication deals in pursuit of ads that command higher prices.
During his months-long tenure, Levinsohn ended a patent dispute with Facebook and signed the social network onto a partnership. Days after his appointment, he ended a fractious episode in Yahoo’s history by sealing a deal to sell as much as half of its stake in China’s Alibaba, netting some $7.1 billion.
But the board may not have endorsed his media-focused, long-term plan to turn the ship around.
“I just think it was uninspired,” one source said on Monday, referring to Levinsohn’s strategy.
But in this Bloomberg story, it seems clear that Mayer already has a plan for what she wants to do – and the board loves it:
In a morning-long conversation, Mayer wowed the board, including hedge fund manager Daniel Loeb, whose agitations led to the ouster of previous CEO Scott Thompson over exaggerations on his resume.
According to Business Insider, the strategy involves “beating” Facebook and Google (“Yahoo hired Marissa Mayer to be its CEO because the board believes that she can make the company competitive with Google and Facebook“).
Some traders I’ve seen tweeting have speculated that Mayer is simply going to dress Yahoo! up for a sale to Google in 18 – 36 months. They view her almost as a Google plant dropped into Sunnyvale like a Navy SEAL. This is silly talk.
Mayer spent her entire career at Google. Therefore, she’s likely to heavily recruit current and ex-Googlers to staff up key executive positions at Yahoo! This happens with any new CEO in any industry. You surround yourself with your buddies who you think “get” your way of viewing the world. Tim Armstrong did this at AOL (AOL) and Mayer will most certainly do this now at Yahoo!
However, that might be the extent of any deepened relationship between Google and Yahoo! Mayer’s not beholden to Google anymore. She was hired to maximize value at Yahoo! and she’s apparently got some good ideas to do just that which is making the board – including Loeb – salivate so much that they picked her unanimously over Ross’s “steady Eddie” vision.
What’s more, don’t forget that she was passed over by Larry Page last year to be on his executive team. Even though there might be good reasons for that and only so many seats on the bus, for any high-achieving and ambitious person – which Marissa certainly is – that would sting. Unconsciously or consciously, Type-A people who get slighted like that harbor a deep desire not just to succeed on their own to show up those who passed them over before but — if possible — to do so at those peoples’ expense.
I’m sure nothing would make Marissa happier than to see Yahoo! succeed and leave Larry, Eric, Sergey, Anne, Nikesh and the rest of the crew at Google scratching their heads saying “What happened?… we just got Marissa’ed.”
Facebook is even a more interesting relationship for Yahoo! First, Yahoo! wanted to sue them for patents. Then, they made nice and expanded their existing partnership in a deal clearly brokered between Ross Levinsohn and Sheryl Sandberg.
Sandberg specifically thanked Ross in the joint press release announcing their patent settlement:
“I’m pleased that we were able to resolve this in a positive manner and look forward to partnering closely with Ross and the leadership at Yahoo!,” said Sheryl Sandberg, Chief Operating Officer at Facebook. “Yahoo!’s new leaders are driven by a renewed focus on innovation and providing great products to users. Together, we can provide users with engaging social experiences while creating value for marketers.”
Then, when congratulating Marissa on her appointment this week, Sandberg took the time to thank Ross again — even though his own board didn’t recognize him in their press release introducing Marissa:
Congratulations to Marissa Mayer! Great news for women (and men!) across Silicon Valley. All of us at Facebook look forward to working with you in your new role.
We also want to thank Ross Levinsohn for his leadership in reestablishing an important relationship for Facebook and promoting innovation in the broader tech community.
More than classy, the note from Sandberg suggests that there was really some mutual respect and rapport between Yahoo! and Facebook now and their respective leaders. There’s no reason why there can’t still be, although early signals suggest that Mayer will try to get as much from the Facebook relationship in the short-term while competing hard against them in the long-term. All indications were that Ross would’ve been much friendlier towards competing against Facebook.
It will be interesting to see what Marissa does with Yahoo!’s ad tech business. It might not be a forgone conclusion that she just hands the keys to it over to Nikesh Arora. She could keep it and double-down.
Probably the most interesting post I read about Mayer this week — among the hundreds! – was this one by search guru Danny Sullivan. In amazingly clear detail, Sullivan lays out what an utter failure the search partnership between Yahoo! and Microsoft has been in the past 3 years. And, realistically, it will never change. Although Sullivan suggests (correctly, I believe) that the most likely resolution of this problem is Microsoft throwing more money at Yahoo! to make them happy, he presents a deliciously intriguing possibility that Mayer might actually seeks to take over Bing’s search operations from Microsoft — bringing search, Qi Lu, and the whole search operations back to Yahoo! Project Panama would ride again!
Mayer is obviously steeped in search. It would feel comfortable for her. And she’s also probably intrigued with Yahoo!’s Axis mobile search product and the possibility to innovate circles around Google (again showing them up for passing over her for a Leadership Team position last year). Could she reinvigorate search? Would the board want her to – especially when mobile has cut into search’s profitability? We don’t know.
From Microsoft’s side, after throwing in the towel on the aQuantive acquisition recently with a $6.2 billion write-down, why wouldn’t Steve Ballmer wake up one day and say “screw the Online Services Division, I’m going to shut it down, as I’ve had about as much fun as I can take from it”?
In any case, get ready for some serious coopetition between the biggest Internet companies in the next couple of years.
[Long YHOO]
