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Yup... I think she was out of her league in terms of negotiation. She's a talented and user-focused product person, but not a leader/negotiator/employer. As I

by chubot 10y ago

Yup... I think she was out of her league in terms of negotiation. She's a talented and user-focused product person, but not a leader/negotiator/employer. As I noted before, she was never at the senior VP level at Google (i.e. reporting to the CEO). So she just didn't have enough experience at that level. It seems like she got the CEO job based on name recognition, and not a track record of leadership and business acumen. It's interesting to consider the outrage about CEO pay in light of this. Sure, there are plenty of shitty CEOs who don't deserve their compensation. But you have to respect the fact that, at this level, if you aren't sharp, you'll be fleeced by your peers (i.e. De Castro, and whoever negotiated the Mozilla deal). You don't want to work for a CEO who is getting the short end of the stick all the time. In addition to Steve Jobs' talents as a product person, he also never got the short end of any deal. (I'm saying that as a person who has never really used Apple products.) I was astounded that he basically did a reverse takeover of TWO COMPANIES -- Apple when he returned, and Disney via Pixar. He negotiated with all the thugs in the movie and music businesses. There aren't many tech CEOs who can do that. I forget where, but I recall some anecdotes about being on the other side of the table with Bob Iger... saying that those guys basically threatened to physically harm you, and that their threats were actually credible!!! Like you should be scared for your life when messing with those guys :)

jonknee 10y ago
> Sure, there are plenty of shitty CEOs who don't deserve their compensation. But you have to respect the fact that, at this level, if you aren't sharp, you'll be fleeced by your peers (i.e. De Castro, and whoever negotiated the Mozilla deal). You don't want to work for a CEO who is getting the short end of the stick all the time. I always assumed there were some shark lawyers behind these deals, does the CEO really ignore advice and go it alone? In Mayer's case it really does seem so, but a non-sharp CEO should still be able to not be eaten alive if they bring good counsel to the table (though I guess that itself is the sign of being sharp!).
- rdtsc 10y ago
  > I always assumed there were some shark lawyers behind these deals, does the CEO really ignore advice and go it alone? The leadership / negotiation prowess includes the ability to pick, hire, delegate and trust good people. It is not a coincidence that she was neither able to negotiate a good deal but also failed to negotiate hiring competent advisors. There is a large overlap there. Perhaps behind De Castro is a competent group of lawyers or advisors as well.
  - jonknee 10y ago
    > It is not a coincidence that she was neither able to negotiate a good deal but also failed to negotiate hiring competent advisors. There is a large overlaps there. Though she did negotiate herself one hell of a contract. When it personally counts she finds competent people to negotiate!
    - rdtsc 10y ago
      That's a good point.
  - chubot 10y ago
    Right, you need to be knowledgeable enough to delegate. It's genuinely a tall order to be able to figure who is a good product leader, who is a good CTO, who is a good CFO, who is a good litigator, head of HR, etc. Those fields are so disparate, and if you don't know enough about them, you won't be able to judge talent. It's exactly the same reason that programmers need to be interviewed by programmers, and programmers prefer to work for managers that were programmers. You really do have to understand something about someone's job if you will manage them (and potentially fire them). People with specialized knowledge will do all sorts of things to mislead you about their job performance -- doesn't matter if it's an engineer, lawyer, or finance person.
- mikeryan 10y ago
  I think it's selling Marissa short to say she just didn't understand the contracts or her legal options and potential consequences. I think she understood the consequences but thought that the risk was worth the reward. In some cases I think personal hubris was involved. I don't do Billion dollar deals but I've done my share of 7 figure ones. At some point in every negotiation you need to tell your attorney that you understand the risks and you're willing to accept those risks or nothing would ever get signed. I think Marissa was convinced the Mozilla deal would be huge for Yahoo. She likely didn't think or care if the company got sold (honestly in that case she's probably out so there's no personal risk for her) and she was convinced DeCastro would be able to do at Yahoo what he was able to do at Google.
  - jonknee 10y ago
    > I think it's selling Marissa short to say she just didn't understand the contracts or her legal options and potential consequences. So she understood the consequences, but just had no clue as to their likelihood or didn't care because she would be set financially? It's horrible either way, she should not be negotiating deals at all.
    - techolic 10y ago
      > but just had no clue as to their likelihood Likelihood is probability based on factors, each of which has different weight and is again based on other factors. In hindsight, the likelihood seems obvious; when she was making the decision, not so much.
    - rgbrenner 10y ago
      there is a favorable interpretation of this for Meyer. they're in a bidding war for mozilla with Google and Bing. Yahoo needs their traffic and is willing to exceed the price of the other buyers.. but it's well known that Yahoo has been struggling for years. So a cautious Mozilla would not take their offer unless it was substantially higher, or had some kind of protection if yahoo fails. Yahoo offers this clause, since Mozilla wouldn't do the deal otherwise. Remember Mozilla wasn't desperate. They could have accepted another offer for at least $300m/year. Yahoo would have been seen as higher risk... people talk every few months about yahoo like it's a miracle they still exist. Now, I don't know what happened. but yahoo agreeing to this does not necessarily mean Marissa is incompetent or didn't care or whatever.
beachstartup 10y ago
i mean, sure, you have to be sharp to be the CEO. and she is sharp. she's earning millions and giving millions to her friends, is she not? i mean, are we looking at the same information here? but giving someone a $58m bonus (severence... lol) for a year of work is not a consequence of 'sharp' vs. 'not sharp', it's a consequence of simply not giving a shit about the money because half (or more) of your motivation is probably pilfering the company coffers for you and your cronies to begin with. none of the yahoo story seems like incompetence to me. it seems like a straight up robbery. everyone calling her incompetent, or dumb, or whatever, has got 'naive' stamped across their forehead.
- chubot 10y ago
  Well yeah, the answer is probably somewhere in between -- it's partly that she gets paid no matter what the deal is, and part naivete. Even if you are purely self-interested, then you will be motivated to: 1) develop a reputation for being a good negotiator, because that will help in future negotiations 2) actually build the company rather than raid it, because that will lead to better jobs down the road / better reputation. I mean, she's not a finance type. Those guys do just raid and rob. Someone who wants to raid companies doesn't join a 10 person startup out of college, toiling away to acquire users.
  - beachstartup 10y ago
    > Someone who wants to raid companies doesn't join a 10 person startup out of college. haha. dude. she's in her 40s and worth $500M (and growing) now. she is obviously pilfering yahoo and enriching herself and her friends. things change. people change. sometimes for the worse. ironically, the corporate raider types are the ones who are currently trying to stop her, because she is killing the golden goose that has lined their pockets for decades. to be quite honest i wouldn't be surprised if her loyalties still lay with the google cabal. you know what one great way to get rid of a major competitor is? become ceo and sack the joint. genius!
    - endemic 10y ago
rsyntax 10y ago
agreed. Jobs' negotiation skills are "legendary" in the valley.
dharmon 10y ago
I think she is what Game of Thrones would call a "summer child". Her entire career prior to Yahoo had been spent at a company where a) they had only experienced an upward trajectory, and b) she was never exposed to the real business side of things (as you pointed out). Basically, she negotiated every deal, acquisition, etc. as if the absolute best case was a certainty, because that was the limit of her experience. Now she knows that cargo-culting free food and fancy parties does not a successful business make.
- jldugger 10y ago
  > Basically, she negotiated every deal, acquisition, etc. as if the absolute best case was a certainty Sometimes the situation calls for rolling the dice and hoping for the best. Before we call her business acumen in to question, we should know the incentives set forth to her by the board, and what agenda they may have set for her. Incentive wise, stock options often push executives towards riskier plans of action. And agenda wise, it may be that she's been brought in to sell to a competitor like Google. Outbidding Google for the FF contract seems like a reasonable plan to buy more things Google is interested in. Recruiting executives from Google to help negotiate a buyout might also be a good plan if they bring enough information with them.
matt4077 10y ago
I seem to remember that many companies handle compensation on the CXO level with a committee of members of the board. It seems they dropped the ball as much as she may have, or she did suddenly show those supposedly lacking skills when dealing with her superiors.
KKKKkkkk1 10y ago
Coming from the Middle East, it's obvious to me that Americans overestimate the difficulty and importance of negotiation, and this is because they never negotiate outside of a business context. The responsibility of the negotiator is to evaluate the available offers and be able to come up with constructive counteroffers. The only way you get screwed is if you act rashly or irrationally. In other words, you're saying that CEOs get astronomical compensation because they can be relied on not to act in gross negligence.
- dredmorbius 10y ago
  How does a middle eastern background help here?
  - jzwinck 10y ago
    In some places you can negotiate for a sack of rice. A television. A taxi ride. A dress. When you live in such places you become used to the ebb and flow of negotiating, the give and take. If the only time you negotiate anything, it's worth millions, you might not be well practiced.
    - dredmorbius 10y ago
      You've explained practice as a component, but not what that yields. What are the lessons of haggling, then?
      - puranjay 10y ago
        If you haggle on an everyday basis, you eventually start trying out different strategies, from lowballing to starting with a high offer to anchoring. Dont know how effectivr that would be in an 8 figure deal, but I reckon the lessons are somewhat applicable
        ghshephard 10y ago
        Jobs's skill in negotiating was such that there was a standing order at Sun that no contract could be finalized with Apple, While Steve Jobs physically present in the room. The objective was to allow his reality distortion field to dissipate, such that a more dispassionate assessment could be made. I'm wondering if that suggests that Steve didn't have a particularly good negotiating strategy, but simply a force of emotive presence. I guess that is actually a form of negotiating, but probably one that is difficult to teach others.

by chubot 10y ago

jonknee 10y ago

> Sure, there are plenty of shitty CEOs who don't deserve their compensation. But you have to respect the fact that, at this level, if you aren't sharp, you'll be fleeced by your peers (i.e. De Castro, and whoever negotiated the Mozilla deal). You don't want to work for a CEO who is getting the short end of the stick all the time. I always assumed there were some shark lawyers behind these deals, does the CEO really ignore advice and go it alone? In Mayer's case it really does seem so, but a non-sharp CEO should still be able to not be eaten alive if they bring good counsel to the table (though I guess that itself is the sign of being sharp!).

rdtsc 10y ago
> I always assumed there were some shark lawyers behind these deals, does the CEO really ignore advice and go it alone? The leadership / negotiation prowess includes the ability to pick, hire, delegate and trust good people. It is not a coincidence that she was neither able to negotiate a good deal but also failed to negotiate hiring competent advisors. There is a large overlap there. Perhaps behind De Castro is a competent group of lawyers or advisors as well.
- jonknee 10y ago
  > It is not a coincidence that she was neither able to negotiate a good deal but also failed to negotiate hiring competent advisors. There is a large overlaps there. Though she did negotiate herself one hell of a contract. When it personally counts she finds competent people to negotiate!
  - rdtsc 10y ago
    That's a good point.
- chubot 10y ago
  Right, you need to be knowledgeable enough to delegate. It's genuinely a tall order to be able to figure who is a good product leader, who is a good CTO, who is a good CFO, who is a good litigator, head of HR, etc. Those fields are so disparate, and if you don't know enough about them, you won't be able to judge talent. It's exactly the same reason that programmers need to be interviewed by programmers, and programmers prefer to work for managers that were programmers. You really do have to understand something about someone's job if you will manage them (and potentially fire them). People with specialized knowledge will do all sorts of things to mislead you about their job performance -- doesn't matter if it's an engineer, lawyer, or finance person.
mikeryan 10y ago
I think it's selling Marissa short to say she just didn't understand the contracts or her legal options and potential consequences. I think she understood the consequences but thought that the risk was worth the reward. In some cases I think personal hubris was involved. I don't do Billion dollar deals but I've done my share of 7 figure ones. At some point in every negotiation you need to tell your attorney that you understand the risks and you're willing to accept those risks or nothing would ever get signed. I think Marissa was convinced the Mozilla deal would be huge for Yahoo. She likely didn't think or care if the company got sold (honestly in that case she's probably out so there's no personal risk for her) and she was convinced DeCastro would be able to do at Yahoo what he was able to do at Google.
- jonknee 10y ago
  > I think it's selling Marissa short to say she just didn't understand the contracts or her legal options and potential consequences. So she understood the consequences, but just had no clue as to their likelihood or didn't care because she would be set financially? It's horrible either way, she should not be negotiating deals at all.
  - techolic 10y ago
    > but just had no clue as to their likelihood Likelihood is probability based on factors, each of which has different weight and is again based on other factors. In hindsight, the likelihood seems obvious; when she was making the decision, not so much.
  - rgbrenner 10y ago
    there is a favorable interpretation of this for Meyer. they're in a bidding war for mozilla with Google and Bing. Yahoo needs their traffic and is willing to exceed the price of the other buyers.. but it's well known that Yahoo has been struggling for years. So a cautious Mozilla would not take their offer unless it was substantially higher, or had some kind of protection if yahoo fails. Yahoo offers this clause, since Mozilla wouldn't do the deal otherwise. Remember Mozilla wasn't desperate. They could have accepted another offer for at least $300m/year. Yahoo would have been seen as higher risk... people talk every few months about yahoo like it's a miracle they still exist. Now, I don't know what happened. but yahoo agreeing to this does not necessarily mean Marissa is incompetent or didn't care or whatever.

beachstartup 10y ago

i mean, sure, you have to be sharp to be the CEO. and she is sharp. she's earning millions and giving millions to her friends, is she not? i mean, are we looking at the same information here? but giving someone a $58m bonus (severence... lol) for a year of work is not a consequence of 'sharp' vs. 'not sharp', it's a consequence of simply not giving a shit about the money because half (or more) of your motivation is probably pilfering the company coffers for you and your cronies to begin with. none of the yahoo story seems like incompetence to me. it seems like a straight up robbery. everyone calling her incompetent, or dumb, or whatever, has got 'naive' stamped across their forehead.

chubot 10y ago
Well yeah, the answer is probably somewhere in between -- it's partly that she gets paid no matter what the deal is, and part naivete. Even if you are purely self-interested, then you will be motivated to: 1) develop a reputation for being a good negotiator, because that will help in future negotiations 2) actually build the company rather than raid it, because that will lead to better jobs down the road / better reputation. I mean, she's not a finance type. Those guys do just raid and rob. Someone who wants to raid companies doesn't join a 10 person startup out of college, toiling away to acquire users.
- beachstartup 10y ago
  > Someone who wants to raid companies doesn't join a 10 person startup out of college. haha. dude. she's in her 40s and worth $500M (and growing) now. she is obviously pilfering yahoo and enriching herself and her friends. things change. people change. sometimes for the worse. ironically, the corporate raider types are the ones who are currently trying to stop her, because she is killing the golden goose that has lined their pockets for decades. to be quite honest i wouldn't be surprised if her loyalties still lay with the google cabal. you know what one great way to get rid of a major competitor is? become ceo and sack the joint. genius!
  - endemic 10y ago

rsyntax 10y ago

agreed. Jobs' negotiation skills are "legendary" in the valley.

dharmon 10y ago

I think she is what Game of Thrones would call a "summer child". Her entire career prior to Yahoo had been spent at a company where a) they had only experienced an upward trajectory, and b) she was never exposed to the real business side of things (as you pointed out). Basically, she negotiated every deal, acquisition, etc. as if the absolute best case was a certainty, because that was the limit of her experience. Now she knows that cargo-culting free food and fancy parties does not a successful business make.

jldugger 10y ago
> Basically, she negotiated every deal, acquisition, etc. as if the absolute best case was a certainty Sometimes the situation calls for rolling the dice and hoping for the best. Before we call her business acumen in to question, we should know the incentives set forth to her by the board, and what agenda they may have set for her. Incentive wise, stock options often push executives towards riskier plans of action. And agenda wise, it may be that she's been brought in to sell to a competitor like Google. Outbidding Google for the FF contract seems like a reasonable plan to buy more things Google is interested in. Recruiting executives from Google to help negotiate a buyout might also be a good plan if they bring enough information with them.

matt4077 10y ago

I seem to remember that many companies handle compensation on the CXO level with a committee of members of the board. It seems they dropped the ball as much as she may have, or she did suddenly show those supposedly lacking skills when dealing with her superiors.

KKKKkkkk1 10y ago

Coming from the Middle East, it's obvious to me that Americans overestimate the difficulty and importance of negotiation, and this is because they never negotiate outside of a business context. The responsibility of the negotiator is to evaluate the available offers and be able to come up with constructive counteroffers. The only way you get screwed is if you act rashly or irrationally. In other words, you're saying that CEOs get astronomical compensation because they can be relied on not to act in gross negligence.

dredmorbius 10y ago
How does a middle eastern background help here?
- jzwinck 10y ago
  In some places you can negotiate for a sack of rice. A television. A taxi ride. A dress. When you live in such places you become used to the ebb and flow of negotiating, the give and take. If the only time you negotiate anything, it's worth millions, you might not be well practiced.
  - dredmorbius 10y ago
    You've explained practice as a component, but not what that yields. What are the lessons of haggling, then?
    - puranjay 10y ago
      If you haggle on an everyday basis, you eventually start trying out different strategies, from lowballing to starting with a high offer to anchoring. Dont know how effectivr that would be in an 8 figure deal, but I reckon the lessons are somewhat applicable
      - ghshephard 10y ago
        Jobs's skill in negotiating was such that there was a standing order at Sun that no contract could be finalized with Apple, While Steve Jobs physically present in the room. The objective was to allow his reality distortion field to dissipate, such that a more dispassionate assessment could be made. I'm wondering if that suggests that Steve didn't have a particularly good negotiating strategy, but simply a force of emotive presence. I guess that is actually a form of negotiating, but probably one that is difficult to teach others.