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[Mayer] highlighted various signs of promise. ... Display advertising revenue was down 6 percent, but the number of ads sold had actually increased by 24 percen

by HillRat 12y ago

[Mayer] highlighted various signs of promise. ... Display advertising revenue was down 6 percent, but the number of ads sold had actually increased by 24 percent. Good news, everybody! We're doing more and making less! Yahoo isn't a products company -- it's a pile of cash with long audience reach. This isn't a bad thing (and indeed was the situation at Apple when Jobs returned), but it does mean that the company has lots of options but no core mission. The danger is that such a company can kill its cows while searching for stars. It's hard to avoid the conclusion that Mayer has failed to develop any kind of coherent strategy, let alone execution. Instead, she appears to have substituted chaotic action as a metric of progress (new home pages every day! Purple everywhere!), mistaken her hobbies as evidence of expertise (e.g., deciding Yahoo could become a destination for high-end prêt-à-porter fashion consumers), and taken on high-concept strategies without any kind of plan for generating revenue and income (e.g., going deep on content). This doesn't even get to Yahoo's constant overpaying for startups that are inevitably killed by indigestion -- I like to say that VCs operate on the greater fool theory, and right now the greatest fool is Yahoo. Couple this with what is evidently a tendency to micromanage without attention to detail, a constant reworking of HR aspects without any comprehension of how such changes affected loyal employees, and an almost imperial demeanor -- no surprise that her tenure is already being prepped for postmortems. Mayer's failures have at best led to drift and at worst burned the little remaining daylight left for Yahoo. Were I a major shareholder at the company, I think I'd rather have little Bobby and his nickel in charge than Marissa and her $2.08 billion.

smacktoward 12y ago
> It's hard to avoid the conclusion that Mayer has failed to develop any kind of coherent strategy, let alone execution. This has been my impression since she got the gig -- that she doesn't really have a strategy, just a collection of tactics. So she runs around doing stuff and hoping that some of it will improve things. For all the comparisons to Jobs, this approach shows a key difference, namely that Jobs had a strategy. When he took over Apple the first thing he did was brutally cut down the company's product lines. By the time he was done Apple really only sold four products: consumer and pro Mac, consumer and pro PowerBook. That was the entire Apple product line. This was a strategic decision: cut down to four products and absolutely nail the implementation of those products, rather than trying to have a half-baked product for every possible customer.
- HillRat 12y ago
  Really good point -- I had forgotten Apple's proliferation of incomprehensibly-named Power Macs and how Jobs reduced the line to the bare minimum. And, indeed, part of his strategy was to kill off Apple's actually innovative product, the Newton MessagePad, which had finally hit a solid implementation with the 2000. As much as I loved the Newton, killing it was a sound tactic in pursuit of a sound strategy. By contrast, think of Jobs at NeXT: he pursued a failing strategy because he was trying to innovate for innovation's sake (trying to build a 3M workstation without a proven market; building a totally-automated, world-class factory without enough orders to keep it operating; obsessing over minutiae like the handrail design at NeXT headquarters). The result was fantastic technology but a company whose promises had to wait for Jobs' return to Apple. I like to think that Jobs' failure at NeXT was an educational experience for him; however, with Mayer, I'm not sure she can pull off a second act after what I expect to be an unceremonious ouster from Yahoo.
  - tim333 12y ago
    Was NeXT a failure? From Wikipedia it was founded in '86 and got bought in '96 by Apple for $429m plus 1.5m Apple shares for Jobs. I wouldn't mind failing like that.
    - HillRat 12y ago
      I'm a bit late in catching up on this, but NeXT really was a commercial failure. It sold a number of its workstations to government agencies (notably CIA) and scientific teams , but in the early '90s exited the h/w business to concentrate on selling NeXTSTEP and, later OpenStep. The strategy switch was the result of the company's failure to compete with workstation manufacturers like Sun, and the company's rapid drawdown of its cash. By the time NeXT exited the hardware business, they had revenues of about $125m/year, but operating at a loss; Canon, which was already into NeXT to the tune of $100m, floated another $30m plus a $55m line of credit. Jobs was also funding NeXT and his other project, Pixar, out of his own bank account, which left him severely depleted. (Previously, Ross Perot and, later, a consortium of universities had also invested in the company for about $150m combined.) By cutting the hardware business, developing a mildly popular web server (WebObjects), and selling off assets like the Deer Park HQ, Jobs was able to eke a minor profit out of NeXT, but nothing that would justify the massive valuation investors accepted during its early days. Apple's purchase was indeed partially for its technology -- Apple had played around with a competing OS, Be, for its new OS layer, but ultimately passed -- but also to lure Jobs back.

by HillRat 12y ago

smacktoward 12y ago

> It's hard to avoid the conclusion that Mayer has failed to develop any kind of coherent strategy, let alone execution. This has been my impression since she got the gig -- that she doesn't really have a strategy, just a collection of tactics. So she runs around doing stuff and hoping that some of it will improve things. For all the comparisons to Jobs, this approach shows a key difference, namely that Jobs had a strategy. When he took over Apple the first thing he did was brutally cut down the company's product lines. By the time he was done Apple really only sold four products: consumer and pro Mac, consumer and pro PowerBook. That was the entire Apple product line. This was a strategic decision: cut down to four products and absolutely nail the implementation of those products, rather than trying to have a half-baked product for every possible customer.

HillRat 12y ago
Really good point -- I had forgotten Apple's proliferation of incomprehensibly-named Power Macs and how Jobs reduced the line to the bare minimum. And, indeed, part of his strategy was to kill off Apple's actually innovative product, the Newton MessagePad, which had finally hit a solid implementation with the 2000. As much as I loved the Newton, killing it was a sound tactic in pursuit of a sound strategy. By contrast, think of Jobs at NeXT: he pursued a failing strategy because he was trying to innovate for innovation's sake (trying to build a 3M workstation without a proven market; building a totally-automated, world-class factory without enough orders to keep it operating; obsessing over minutiae like the handrail design at NeXT headquarters). The result was fantastic technology but a company whose promises had to wait for Jobs' return to Apple. I like to think that Jobs' failure at NeXT was an educational experience for him; however, with Mayer, I'm not sure she can pull off a second act after what I expect to be an unceremonious ouster from Yahoo.
- tim333 12y ago
  Was NeXT a failure? From Wikipedia it was founded in '86 and got bought in '96 by Apple for $429m plus 1.5m Apple shares for Jobs. I wouldn't mind failing like that.
  - HillRat 12y ago
    I'm a bit late in catching up on this, but NeXT really was a commercial failure. It sold a number of its workstations to government agencies (notably CIA) and scientific teams , but in the early '90s exited the h/w business to concentrate on selling NeXTSTEP and, later OpenStep. The strategy switch was the result of the company's failure to compete with workstation manufacturers like Sun, and the company's rapid drawdown of its cash. By the time NeXT exited the hardware business, they had revenues of about $125m/year, but operating at a loss; Canon, which was already into NeXT to the tune of $100m, floated another $30m plus a $55m line of credit. Jobs was also funding NeXT and his other project, Pixar, out of his own bank account, which left him severely depleted. (Previously, Ross Perot and, later, a consortium of universities had also invested in the company for about $150m combined.) By cutting the hardware business, developing a mildly popular web server (WebObjects), and selling off assets like the Deer Park HQ, Jobs was able to eke a minor profit out of NeXT, but nothing that would justify the massive valuation investors accepted during its early days. Apple's purchase was indeed partially for its technology -- Apple had played around with a competing OS, Be, for its new OS layer, but ultimately passed -- but also to lure Jobs back.