New Yahoo CEO: Fix It and Flip It
We’ve seen much kerfuffle the past day-plus regarding the hiring of ex-Google product guru Marissa Mayer as Yahoo’s new CEO – the fifth Yahoo CEO in about a year. Most of the discussions have built around how Ms. Mayer can or will turn Yahoo around, bringing her Google product magic to a quietly-fading former web star.
In an era and environment obsessed with The Next Big Thing, Yahoo seems like slowly-cooling toast. In fact, the company is one of the largest web/Cloud portals, and it is profitable. But we must also admit that Yahoo is alive mainly because of its long-established, slowly-declining user base. In that way, Yahoo very closely resembles AOL – once the highest-flying web provider of all time, now a reasonably profitable web/Cloud content portal and messaging provider with a hard core of users, trying to find more and better ways to profit from a wide range of content.
But content was never really king when it comes to web/Cloud presence, because content is everywhere and available at low/no cost. The real value of content is its utility within the context of the user experience, partly for the user, but more for those who wish to derive revenue from the user. Google has been able to derive value for users and advertisers from its combined scale and utility in finding, aggregating, and presenting content in a specific user context – i.e, search. Google has found much more limited revenue success in other endeavors, including its own iGoogle content aggregation portal service, which is slated for closure in late 2013.
It’s very possible that Mayer will find/develop/refine some means of improving Yahoo’s ability to deliver content-based value for users and those who wish to profit from users. But in our opinion, the most important and successful thing she is likely to do for Yahoo is to productize and then sell pieces of the company. In fact, we believe that Mayer’s primary mission, and the reason she was recruited, is to review and refine how the various parts or Yahoo are or should be productized, with an eye toward selling off those products. Someone with Google vision and experience is much more likely to see the business and technology opportunities in such a situation. To our way of thinking, it makes little if any sense to poach such a high-profile Cloud/web executive in any other context.