Marissa Mayer – Is She Yahoo!’s Wonder Woman?

01-grey-buisness_0146_COMP.JPGA year and a half ago, Marissa Mayer sat down behind the desk in the President’s office at Yahoo!, as its new rightful occupant. Listed by Fortune as one of the most powerful American businesswomen of 2013, she had already “made her bones” before sitting in that chair. Forbes considered her high on the list of the 100 most powerful women in the world that same year.

As employee #20 at Google, she was the first female engineer to join Google, and her MS in computer science was put to good use. Her creative bent and forward thinking style helped quite a lot, too.

She worked her way up from engineer to VP during her 13 year stint with the company, leading the search products and user experience group and later, the local, maps and location services group. She also became a prominent spokesperson for Google, demonstrating an ability to project herself as knowledgeable, capable and reliable.

While many consider her to be quite likeable and very attractive, nobody can claim she owes her achievements to those qualities. She is, by any measure, a woman to be reckoned with. She has been granted seats on the boards of Walmart and Jawbone, as well as the New York City Ballet, San Francisco Ballet, San Francisco Museum of Modern Art, the National Design Museum and Cooper-Hewitt. And, of course, she chairs the Yahoo! board of directors.

But what has she done lately?

Our heroine hasn’t been idle, by any means. She’s put a lot of attention on the work culture and the company’s future, among other things – both aspects that were in dire need of some attention.

One of her early efforts involved viewing the company culture as DNA – embodied by her statement “You want the genes that are positive to hyper-express themselves.” Her solution: PB&J.

PB&J was a program by which employee complaints were gathered, then rated by employee vote, and if they get at least 50 votes, management took that as a mandate for attention. As a result of PB&J, 1,000 such items were fixed within the first year.

Such programs can have a tremendous impact on company culture. Yahoo! has seen the industry’s perception of the company improve dramatically. For example, the 2,000 job applications in the 2nd quarter of 2012 increased to 17,000 in the same period, a year later.

She also implemented a program that extended maternity leave and included a cash bonus for the parents, similar to some other large hi-tech companies in the Silicon Valley area.

Perhaps the most controversial change she enacted was the end of the telecommuting which had become very common in the company. All remote employees were required to move into the office, which didn’t please everyone.

Finally, she suggested that managers review the performance of employees on a bell curve and shed those that fell on the low end. Again, some were displeased with this, but generally, I suspect the dissenters were those that felt the pressure to perform or move on.

At the end of a little more than a year, however, Yahoo!’s stock had doubled. Regardless how hands-on a CEO may or may not be, the bottom line is the final metric. Once again, Marissa performed. Considering the failed efforts of several predecessors, she performed quite well, in spite of having no experience running such an enterprise, let alone a publicly traded company.

Acquisitions on Marissa’s Watch

Yahoo! has acquired a number of social recommendation properties since Marissa took the reins, but they haven’t limited themselves to social. Stamped, MileWise and others went into the company’s Mobile Properties & Apps division, but were joined by some gaming and photography applications.

Perhaps the splashiest addition to their stable since Flikr was Tumblr, in May of last year. The addition of Rockmelt last August was another notable purchase. When viewed in aggregate, it’s obvious that Mayer is focusing heavily on mobile and social… no surprise there.

From the outside, it seems as though Mayer has the support of her board and the Yahoo! shareholders. Her performance would seem to have justified the five year, $117MM investment needed to attract her. Although, already worth over $300MM, she certainly doesn’t need the job.

The Big Question

The big question, in my opinion, is where Marissa Mayer can take Yahoo! now. In a couple of months, the latest extension of the search deal with Microsoft will expire in just a couple of months. Microsoft might extend it again… they certainly already have enough invested in the deal to make it painful to walk away.

I’m willing to bet that Mayer has independence from the fetters of Microsoft high on her priority list. But the fact remains that the company has yet to realise the revenue per search targets the deal originally set, and it would also be painful to give up the shortfall recovery that Microsoft has been providing.

March 31st signals the end of the latest extension of that agreement. From Microsoft’s standpoint, their already serious cash haemorrhaging (hundreds of millions of dollars per quarter) would be lessened somewhat by cutting Yahoo! loose. But their share of search is already significantly less than Yahoo!’s, and breaking all ties might break the proverbial camel’s back. Can Microsoft accept the potential consequences of such a break?

Whichever way it goes, it should bring some interesting developments to those of us that live and breathe search. I’m betting on Mayer’s leadership to work some wonders.

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