Friday, September 26, 2014

Revisiting Marissa Mayer

Calls by some shareholders to receive most of the money from Yahoo’s sale of a stake in Alibaba could limit the options for Marissa Mayer, chief executive.

Jason Alden/Bloomberg via Getty Images and the New York Times.  

I thought Yahoo's appointment of Marissa Mayer as CEO a few years back was a great move for the company and would bring a sharp, decisive, enthusiastic leader to the company and perhaps to other corporate boards.  The first thing I notice from this New York Times photo and story is that the gleam has gone from her eyes when compared to her taking the reins at Yahoo.  There is clearly a look of weariness, perhaps even resignation.

The articulation of a clear direction for the Yahoo turnaround, milestones and a fast pace of change have all been missing.  One analyst says that Yahoo needs to be "rewired."  But everybody knew this years ago, and it seems incredible that so little has seemingly been accomplished.

I also guessed that her having been in the Google inner sanctum would have been a source for inspiration, guidance, and even partnership in some areas.  Yahoo seems like the armadillo walking slowly down the center line on a Western highway while the semis roar by.  

The acquisition game from here is riskier than a few years ago. For Yahoo to move its needle, a big acquisition is required, but those will have a variety of suitors, all of whom are stronger financially and organizationally than Yahoo. The limited track record so far hasn't been good.

As the Yahoo CFO points out, shareholders don't need to whine incessantly because $1.3 billion has been spent on acquisitions in the past two years, versus returning $6 billion to shareholders.  Ms. Mayer shouldn't obsess about a fifty-fifty split in free cash flows, but she needs to start articulating her playbook in greater detail.

I wonder if her management team has the right roster with the right incentives. I would guess not, otherwise you would read more about them in the press.  I don't want to look up their board members, because they clearly haven't been doing their jobs if the CEO looks wan and beleaguered by shareholders after the stock has bounced off the bottom due to the Alibaba stake. 

Here's hoping for some positive changes and good news. 

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