Launched in 1994, a full four years before Google would even be around, Yahoo would ride an initial wave of popularity before seeing its light begin to fade, and its name be relegated to the punch line of jokes. Then in 2007, Yahoo began arguably its worst five years. It would go through an astonishing five CEO’s in just five years, with one even resigning because of a forged college degree. Then, in 2012, Yahoo finally made a smart choice when they hired Marissa Mayer as their next CEO.
Since joining Yahoo, Mayer has taken the company through a series of progressive improvements to its business model, with varying degrees of success. I don’t believe anyone continues to doubt her business acumen or dedication to the cause, but currently their stock price isn’t rising as fast as investors are clamoring for, and as a result, they’re asking for company changes in the way it generates revenue. However, Mayer is on the right track, and the company will see a resurgence of their brand; here’s why:
Note: The following sections are in response to an interview Mayer gave to Bloomberg Business regarding Yahoo’s current state.
A Focus on Empowering Employees
In an interview with Bloomberg Business, Mayer was asked about her company’s future. She quickly replied that it was focused on empowering employees. Empowering employees, according to Mayer, isn’t just about employee morale; it’s about how they affect the customer experience. One of the best ways for her to accomplish this was to provide support staff for projects and to offer incentives. When one of her teams finished a project ahead of schedule, they were all rewarded with a vacation to Hawaii (and who wouldn’t be envious?). Essentially, it’s not rocket science that happy employees do better work, but apparently Yahoo had never practiced this before Mayer.
Creativity & Innovation
When Mayer came onboard, Yahoo was heavily invested in HTML5 mobile development. Not a bad strategy…when it works. Unfortunately for Yahoo, their strategy wasn’t working. So Mayer and one of her executives took the reins and moved from an HTML5 development platform to one that focused on building native applications. Apparently this proved mildly successful, and currently over 500 million users have adopted at least one of Yahoo’s mobile platforms.
The Right Investments
Most companies talk about mobile investments. Mayer doesn’t just talk about it, she demonstrates an unequivocal commitment to it. With over half of Yahoo’s 1 billion plus users using its digital mobile applications such as Flickr, Mayer knows that one of the best investments is in mobile development. From mobile advertising to focusing on native applications, her insistence on mobile development helped to earn Yahoo $1.2 billion from its mobile offerings alone. This might be more rewarding if Yahoo were making a healthy profit.
Disregarding Yahoo’s finances from previous decades of incompetence, Mayer is playing the long game. For her, short-term quarterly financial gains aren’t as important as the long-term health of Yahoo. So if investors want to see returns tomorrow, they should hire someone to gut the company and turn the headquarters into a Wal-Mart. But if they want to see Yahoo become a major player again and more money in a few years, they should stick with Mayer.
Bloomberg TV: Yahoo’s Mayer: Artificial Intelligence Is Next Big Thing
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