4 ms·

Wow....I feel like I am watching a brilliant game of chess. Marissa Mayer is increasingly showing her genius. It is clear that she understands that Yahoo is a

Wow....I feel like I am watching a brilliant game of chess. Marissa Mayer is increasingly showing her genius. It is clear that she understands that Yahoo is a New Media company. They serve assets to many eyeballs and monetize those assets. It seems that in her case, their main goal is grab up as much quality inventory as she can, and monetize the hell out of it. As their media inventory gets bigger, economies of scale start to kick in. Nike may not want to just advertise on Yahoo & Flickr, but they would be damned if they turn away the potential to reach audiences in Yahoo, Flickr, Tumblr, and now possibly Hulu. Plus I imagine that the more inventory they hold, is the more they can package that inventory to increase the unit price for all properties. Holy crap....this is brilliant and yet so obvious. Why have other CEOs not grasped this and executed on it the way Mayer is. I think this is the one of the few cases, in Corporate America, where going on an M&A spree makes the most sense. Another thing is the more properties she buys, and the better deals she does is the easier it is to buy other deals. Startups loved being bought by Google because YouTube was bought by Google. The same thing is starting to happen. Yahoo! bought Tumblr, so other companies are going to feel comfortable being bought by Yahoo! and that will create more deal flow, resulting in more deals. Hrmmm...I wonder how much cash Yahoo has on their balance sheet - either way, I am sure they can raise a ton of money to do more deals. WoW....just WOW!!!!

bernardom 13y ago
I agree. The other contributing factor here: Yahoo's in a position to bet the farm. They're not growing, and haven't been for years. (Look at their financials: http://www.marketwatch.com/investing/stock/yhoo/financials http://www.marketwatch.com/investing/stock/yhoo/financials) Analysts only expect sales to increase 1-3% over the next few years: http://www.thestreet.com/story/11933654/3/4-big-stocks-ripe-for-a-sharp-pullback.html http://www.thestreet.com/story/11933654/3/4-big-stocks-ripe-... She was pulled in to make big moves.... and is making them!
tomkarlo 13y ago
Except Hulu doesn't have much inventory, at least on an exclusive basis. It has eyeballs and distribution. The assets belong to the studios and networks. A roll-up is not exactly a new strategy, especially in media. You attempt to build economies of scale by amassing audience and distribution. Historically, however, the prices you pay (especially once folks figure out what you're doing) often prove to be inflated later on.
- redler 13y ago
  As an acquisition, Hulu is essentially a bag of content contracts with expiration dates. The infrastructure has value, but it's probably incidental to an acquirer like Yahoo. The challenge is to turn that bag into a property with lasting value; Yahoo is in a much better position to multiply that value than the group of current owners whose half-hearted "coopetition" has resulted in the fickle and watered-down service we currently enjoy.
  - marcamillion 13y ago
    Thank you! News Corp, Comcast, etc. They don't have the experience selling online display media like Yahoo! Guess who else does? No one!!!! So they have an incentive to cooperate. As I said earlier, if Mayer makes a deal without locking up long-term contracts, then on the surface that seems like a dumb deal. Given what I have seen of her so far, I would be surprised if she did that. She is doing good so far.
just2n 13y ago
It sounds to me like she's trying to build another Google. It's really (almost impossibly) hard to dethrone innovators without actually doing any innovation. It's equally difficult keeping talent when the corporate culture isn't hacker-centric. While buying your way into the party is a nice first step, what do you do when you don't have the talent pool to continue to innovate and can't even grow it? Especially when you don't allow remote work, and this industry is increasingly going remote (even if only part-time)? I'm seeing a lot of big talk (primarily via money) from Yahoo, but I don't feel convinced that this is going anywhere. Without a focus on the people and innovation, what do you do after you buy a bunch of startups? So far Yahoo's response has been "buy them and let them operate independently." People go to work at Google to work at Google, not to work at a subsidiary of Google. So if I wanted to go work for Hulu, I'd want to work for Hulu, not Yahoo. Yahoo hasn't been an engineer's company for a very, very long time, and I don't see them taking strides to fix that, so it's hard to say what's going to happen.
- seanlinehan 13y ago
  In order to change the company's product trajectory, culture, and perception there are many stages that they must go through to get to the ultimate goal. At this point in time, Yahoo does not have the public perception that they are a cool company to work for, especially for engineers. This makes it a near impossible task to attract the talent necessary for internal innovation. However, if they buy cool companies, show that they are working on things internally (Flickr redesign), and prove that management is competent, they will be able to transition to internal innovation. Of course, it is a big jump to go from buying companies to transforming their culture to match the perception that they are attempting to create. Perhaps removing the ability to work remotely was a bad first step, perhaps not. I imagine that Mayer knew what she was doing here and it will likely turn out to be a positive move. The big question is what other steps they take internally to truly change the culture. It could be a big flop, but if anybody knows a little something about company culture it would be Mayer.
  - drgath 13y ago
    > At this point in time, Yahoo does not have the public perception that they are a cool company to work for, especially for engineers. That's the thing, it's all public perception and not based in reality. I've worked at Y! for ~4 years (software engineer) and love it. As Marissa has publicly stated, Y! is the world's largest startup, so there's a ridiculous amount of opportunity to work on fun and challenging problems.
untog 13y ago
Is "buy lots of big properties so you can advertise across all of them" really CEO genius? It's something that Yahoo was doing for years before Meyer even came on board- they bought Flickr and Delicious, and tried to buy Facebook. Granted, none of those were hugely successful, but we're still yet to see whether Tumblr and (maybe) Hulu will be. I'm not sure that buying Hulu is such a slam-dunk, anyway. They are entirely at the mercy of the TV networks- if they pull content, Hulu is worth very, very little. People use Hulu largely because they have to.
- anoncow 13y ago
  Not a ceo, but buying hulu looks like a good idea if they have the cash. Better than rolling out a new one from scratch. I would say simple business decisions may make a good businessperson.
  - camus 13y ago
    You cant roll out a Hulu from scratch. It is basically a venture between content providers. How much TV content does Yahoo produce ? none. It is a huge mistake to buy Hulu. I dont know how much they'll be paying for this but it is worth 0 money, just like Tumblr.
    - anoncow 13y ago
      This may very well be true. But you shouldn't discount some points. 1. Yahoo will negotiate some kind of licensing agreement. 2. Yahoo will benefit from a known name and existing users.
    - rhizome 13y ago
      It's not like the content providers are going to abandon a rather large channel with a lot of momentum.
    - marcamillion 13y ago
      I don't understand why this criticism keeps coming up. Isn't it safe to assume that anyone that is buying Hulu would know that the content is what is most important? I assume that to be the case for Mayer, so I assume she wouldn't buy Hulu without the content. That doesn't make sense. Unless....she knows something that we don't know...like Yahoo is going into the original content creation business like Netflix - but even then, we would still be years away from Hulu recovering from the networks pulling their stuff. Give them a little credit please.
smacktoward 13y ago
It is clear that she understands that Yahoo is a New Media company. They serve assets to many eyeballs and monetize those assets. That is pretty much the exact same thing as Terry Semel's vision for Yahoo was. Remember him?
- dakrisht 13y ago
  Wonder what Jerry Yang has to say about all of this
- marcamillion 13y ago
  Yes...but for whatever reason, he couldn't execute. Perhaps he didn't have the geek cred that Mayer has - so no one would make the deals with him. Tumblr is a major coup for her, and if she pulls of Hulu...that would be crazy too.
camus 13y ago
Genius? Tumblr is not worth what they paid for and it sounds like the next myspace deal. Hulu makes 0 profit. There is no genius in just buying random stuffs. It is so short sided ( stock pumping ) it can only lead to a crash . There is 0 strategy just a big bubble.
moshdixx 13y ago
Hahaha hold your horses dude. What is so genius about buying a bunch of gigantic companies ?
nilkn 13y ago
Making acquisitions like this isn't CEO genius. Far from it. Yahoo was making acquisitions before Mayer. It's what happens after the acquisitions are made that will determine whether Yahoo just blew billions of dollars or actually pushed their company forward into the next generation.
- marcamillion 13y ago
  sigh It's not about the fact that she is making acquisitions. It is a well known fact that CEOs like to be self-aggrandizing by doing big deals. The difference is the TYPE of deals she is doing. All of her deals, so far, fit into Yahoo's strengths. Also...the fact that she is able to do these deals at all, is testament to her genius. Many others before her tried, but couldn't do these deals. So there must be something different about her than everybody else that tried. Edit: And yes, the story is yet to be told about how these acquisitions turn out. But with the refocus on product, recent redesign and refactor of Flickr and the way she is consolidating Yahoo's focus around products that give quality display media inventory. That is the genius. It is easy to dismiss it, but if it were so easy, why did no one else do it - including 2 of the founders!

bernardom 13y ago

I agree. The other contributing factor here: Yahoo's in a position to bet the farm. They're not growing, and haven't been for years. (Look at their financials: http://www.marketwatch.com/investing/stock/yhoo/financials http://www.marketwatch.com/investing/stock/yhoo/financials) Analysts only expect sales to increase 1-3% over the next few years: http://www.thestreet.com/story/11933654/3/4-big-stocks-ripe-for-a-sharp-pullback.html http://www.thestreet.com/story/11933654/3/4-big-stocks-ripe-... She was pulled in to make big moves.... and is making them!

tomkarlo 13y ago

Except Hulu doesn't have much inventory, at least on an exclusive basis. It has eyeballs and distribution. The assets belong to the studios and networks. A roll-up is not exactly a new strategy, especially in media. You attempt to build economies of scale by amassing audience and distribution. Historically, however, the prices you pay (especially once folks figure out what you're doing) often prove to be inflated later on.

redler 13y ago
As an acquisition, Hulu is essentially a bag of content contracts with expiration dates. The infrastructure has value, but it's probably incidental to an acquirer like Yahoo. The challenge is to turn that bag into a property with lasting value; Yahoo is in a much better position to multiply that value than the group of current owners whose half-hearted "coopetition" has resulted in the fickle and watered-down service we currently enjoy.
- marcamillion 13y ago
  Thank you! News Corp, Comcast, etc. They don't have the experience selling online display media like Yahoo! Guess who else does? No one!!!! So they have an incentive to cooperate. As I said earlier, if Mayer makes a deal without locking up long-term contracts, then on the surface that seems like a dumb deal. Given what I have seen of her so far, I would be surprised if she did that. She is doing good so far.

just2n 13y ago

It sounds to me like she's trying to build another Google. It's really (almost impossibly) hard to dethrone innovators without actually doing any innovation. It's equally difficult keeping talent when the corporate culture isn't hacker-centric. While buying your way into the party is a nice first step, what do you do when you don't have the talent pool to continue to innovate and can't even grow it? Especially when you don't allow remote work, and this industry is increasingly going remote (even if only part-time)? I'm seeing a lot of big talk (primarily via money) from Yahoo, but I don't feel convinced that this is going anywhere. Without a focus on the people and innovation, what do you do after you buy a bunch of startups? So far Yahoo's response has been "buy them and let them operate independently." People go to work at Google to work at Google, not to work at a subsidiary of Google. So if I wanted to go work for Hulu, I'd want to work for Hulu, not Yahoo. Yahoo hasn't been an engineer's company for a very, very long time, and I don't see them taking strides to fix that, so it's hard to say what's going to happen.

seanlinehan 13y ago
In order to change the company's product trajectory, culture, and perception there are many stages that they must go through to get to the ultimate goal. At this point in time, Yahoo does not have the public perception that they are a cool company to work for, especially for engineers. This makes it a near impossible task to attract the talent necessary for internal innovation. However, if they buy cool companies, show that they are working on things internally (Flickr redesign), and prove that management is competent, they will be able to transition to internal innovation. Of course, it is a big jump to go from buying companies to transforming their culture to match the perception that they are attempting to create. Perhaps removing the ability to work remotely was a bad first step, perhaps not. I imagine that Mayer knew what she was doing here and it will likely turn out to be a positive move. The big question is what other steps they take internally to truly change the culture. It could be a big flop, but if anybody knows a little something about company culture it would be Mayer.
- drgath 13y ago
  > At this point in time, Yahoo does not have the public perception that they are a cool company to work for, especially for engineers. That's the thing, it's all public perception and not based in reality. I've worked at Y! for ~4 years (software engineer) and love it. As Marissa has publicly stated, Y! is the world's largest startup, so there's a ridiculous amount of opportunity to work on fun and challenging problems.

untog 13y ago

Is "buy lots of big properties so you can advertise across all of them" really CEO genius? It's something that Yahoo was doing for years before Meyer even came on board- they bought Flickr and Delicious, and tried to buy Facebook. Granted, none of those were hugely successful, but we're still yet to see whether Tumblr and (maybe) Hulu will be. I'm not sure that buying Hulu is such a slam-dunk, anyway. They are entirely at the mercy of the TV networks- if they pull content, Hulu is worth very, very little. People use Hulu largely because they have to.

anoncow 13y ago
Not a ceo, but buying hulu looks like a good idea if they have the cash. Better than rolling out a new one from scratch. I would say simple business decisions may make a good businessperson.
- camus 13y ago
  You cant roll out a Hulu from scratch. It is basically a venture between content providers. How much TV content does Yahoo produce ? none. It is a huge mistake to buy Hulu. I dont know how much they'll be paying for this but it is worth 0 money, just like Tumblr.
  - anoncow 13y ago
    This may very well be true. But you shouldn't discount some points. 1. Yahoo will negotiate some kind of licensing agreement. 2. Yahoo will benefit from a known name and existing users.
  - rhizome 13y ago
    It's not like the content providers are going to abandon a rather large channel with a lot of momentum.
  - marcamillion 13y ago
    I don't understand why this criticism keeps coming up. Isn't it safe to assume that anyone that is buying Hulu would know that the content is what is most important? I assume that to be the case for Mayer, so I assume she wouldn't buy Hulu without the content. That doesn't make sense. Unless....she knows something that we don't know...like Yahoo is going into the original content creation business like Netflix - but even then, we would still be years away from Hulu recovering from the networks pulling their stuff. Give them a little credit please.

smacktoward 13y ago

It is clear that she understands that Yahoo is a New Media company. They serve assets to many eyeballs and monetize those assets. That is pretty much the exact same thing as Terry Semel's vision for Yahoo was. Remember him?

dakrisht 13y ago
Wonder what Jerry Yang has to say about all of this
marcamillion 13y ago
Yes...but for whatever reason, he couldn't execute. Perhaps he didn't have the geek cred that Mayer has - so no one would make the deals with him. Tumblr is a major coup for her, and if she pulls of Hulu...that would be crazy too.

camus 13y ago

Genius? Tumblr is not worth what they paid for and it sounds like the next myspace deal. Hulu makes 0 profit. There is no genius in just buying random stuffs. It is so short sided ( stock pumping ) it can only lead to a crash . There is 0 strategy just a big bubble.

moshdixx 13y ago

Hahaha hold your horses dude. What is so genius about buying a bunch of gigantic companies ?

nilkn 13y ago

Making acquisitions like this isn't CEO genius. Far from it. Yahoo was making acquisitions before Mayer. It's what happens after the acquisitions are made that will determine whether Yahoo just blew billions of dollars or actually pushed their company forward into the next generation.

marcamillion 13y ago
sigh It's not about the fact that she is making acquisitions. It is a well known fact that CEOs like to be self-aggrandizing by doing big deals. The difference is the TYPE of deals she is doing. All of her deals, so far, fit into Yahoo's strengths. Also...the fact that she is able to do these deals at all, is testament to her genius. Many others before her tried, but couldn't do these deals. So there must be something different about her than everybody else that tried. Edit: And yes, the story is yet to be told about how these acquisitions turn out. But with the refocus on product, recent redesign and refactor of Flickr and the way she is consolidating Yahoo's focus around products that give quality display media inventory. That is the genius. It is easy to dismiss it, but if it were so easy, why did no one else do it - including 2 of the founders!