Is Yahoo's Marissa Mayer a failure?
Is Yahoo's chief executive officer Marissa Mayer a failure? Or was she just handed an unsolveable task?
"Both," says Aswath Damodaran, professor at New York University's Stern School of Business.
"She was given the impossible job (of turning around the troubled Internet pioneer). But at the same time, she took it on, said she would change things, and failed."
As Yahoo's dismantling proceeds – Verizon is still on track to buy its digital assets for US$4.8 billion (NZ$6.85b) while the remaining Alibaba-invested company gets renamed Altaba – questions arise about both the tenure and future of the Google-trained white knight that had promised to ride to the rescue.
* How Yahoo came up with its new name Altaba
* Textbook case of how not to run an internet company
* Hackers stole data from more than 1 billion Yahoo accounts
* Verizon buys Yahoo, marking end of an era for internet trailblazer
On the one hand, under Mayer, Yahoo stock soared 180 per cent since she was named CEO in 2012, from US$15 to US$42.
"If my broker could do that for me every time, I'd call him a genius," says Michael McDermott, a professor of business management. "Given a very difficult if not impossible situation, I'd say she did OK."
Mayer was in many ways brought in to right a sinking ship. She was Yahoo's seventh CEO, a list that included former Warner Bros executive Terry Semel "who couldn't even be bothered to move to Silicon Valley from Los Angeles for the job", says Paul Saffo, longtime tech-world observer and forecaster.
"The company was in such chaotic shape (when Mayer joined) that you would have needed someone with the temperament and intuition of Steve Jobs to even have a chance at a turnaround," Saffo says. "Her biggest mistake might have been taking the job. It was a suicide mission."
But on the other hand, everything from repeated hacking scandals, ill-advised acquisitions such as the US$1.1-billion purchase of social media site Tumblr and high-salary but underutilised hires such as Katie Couric and former New York Times tech columnist David Pogue all point to a spotty chief executive tenure that could stain Mayer's resume.
"Her flaw was that she should have recognised a few years ago that she was throwing good money after bad things, and if she'd done so she would have likely got twice what she's getting now for Yahoo assets," Damodaran says. In fact, Yahoo's stock topped out at nearly US$52 in the fall of 2014.
"But, ultimately, people are human," he says. "You offer someone millions to take a job, and of course they're going to say yes."
Tech world watchers echo a few similar refrains when asked about Mayer and her Yahoo tenure, namely that she was noticeably lacking in the kind of experience required to take on the challenge and that, in the end, the job required a borderline genius.
While Mayer had been an early employee and fast-rising star at Google, "she had no experience as a CEO, and being a tech company CEO requires deep intuition about where things are going. Like when Jobs said everyone has a phone with a stylus, but we're not going to do that", Saffo says.
Yahoo was founded by Jerry Yang and David Filo in 1994 as a curated guide to the burgeoning World Wide Web. Yahoo's homepage was among the first true online sources for news. But Google's arrival signalled a sea change for search companies, one that placed a priority on the power of algorithms over curation.
"Marissa was sticking with Yahoo's DNA and hiring big names, but that was never going to help in the battle with Google," says Saffo.
Making matters worse was an internal culture that seemed to create tension and the wrong kind of competition between layers of vice presidents. In the past few years, Yahoo was hit by a number of lawsuits from male employees who claimed they not only were discriminated against, but that all managers were forced to stack-rank their employees for the purpose of incessant firings.
Mayer and her team "were just not very good at listening, and in any turnaround you have to do an awful lot of listening", says Rita Gunther McGrath, a professor at Columbia Business School. "That wasn't her strong suit."
While Yahoo was a "basket case" upon Mayer's arrival, McGrath notes that among the CEO's poor decisions was one "to go around her own cyber security team", a move that ultimately led to more than a billion users having their information hacked.
On Monday, a Securities and Exchange Commission filing revealed that Mayer, who will have earned more than US$300 million as Yahoo CEO and should receive US$55 million if terminated, will be stepping down from Yahoo's board of directors along with five others when the Verizon sale goes through.
Mayer will not be on the new Altaba company's board, and there is only speculation as to what the executive could do next.
Just how much her Yahoo misadventure will taint her career is also a subject of debate.
"Was there a lot of hubris in her time at Yahoo, of course, but sometimes hubris can pay off," Damodaran says. "I could imagine some small tech company snapping her up as CEO. She's had experience in that position now, and in many ways tech companies like hiring big names."
Saffo says he believes that things might not be so simple. Despite some efforts, Silicon Valley suffers from a reputation as being a predominantly white and male enclave, with few minorities and women in executive positions and in crucial investor roles.
"Marissa took on an impossible mission, and you can't criticise someone for being a risk-taker," he says. "But Silicon Valley has a bit of a double standard when it comes to women. So, will she be judged as a risk-taker who failed, or as a woman who failed?"
Mayer also could be about to head off the "Glass Cliff", a phenomenon first identified by two British professors who found that companies are more likely to appoint women and minorities in leadership roles when the firms are not doing well.
"When things are dire, boards somehow think that bringing in a woman will be better for team building, because they'll listen better and have better social intelligence," McDermott says.
"Then they get fired because of performance or because the business model can't be turned around. And then the company brings in a tough guy."
Yahoo did not immediately respond to a request for comment.
- USA TODAY