Hopes were high when Marissa Mayer was hired as the CEO of Yahoo in 2012. People thought she would turn around the perennially dysfunctional internet giant.
But three years in and Mayer’s time at Yahoo has been marred by slowing growth and internal dissent, leading to plummeting employee morale. Now, some Yahoo investors are demanding a change in management, including the removal of Mayer as chief executive.
We went through a bunch of recent news stories and Nicholas Carlson’s book “Marissa Mayer and the Fight to Save Yahoo!” to put together the story of Mayer’s epic rise to become one of the biggest Silicon Valley power players — and her sudden fall.
➤ Mayer was born in 1975 in a small Wisconsin town called Wausau. Her father was an engineer and mother was an art teacher.
➤ She developed an early talent for math and science, and teachers loved her. Although she was a good presenter, her friends didn’t take her as particularly extroverted. In fact, Mayer once described the child version of herself as “painfully shy.”
➤ Mayer applied to 10 schools and got accepted to all of them, including Harvard, Yale and Stanford. She ended up going to Stanford, where she first took pre-med courses, in hopes of becoming a doctor.
➤ But her life perspective changed when she took an introductory computer science class called CS105. It led her to major in symbolic systems, a famous major whose alumni include LinkedIn’s Reid Hoffman, Apple’s Scott Forstall, and Instagram’s Mike Krieger.
➤ People say she didn’t have a very social life in college. By the time she graduated, Mayer already had 12 job offers lined up. The last offer came from Google, a small startup at the time.
➤ Mayer was planning to take a job at management consulting firm McKinsey at the time. Plus, when she did her own analysis, Google only had a 2% chance of surviving.
But she was fascinated by the people at Google, and thought she’d learn more there. She took the Google offer — and worked there for the next 13 years.
➤ Mayer loved it at Google. During her first two years at Google, she would work 100-hour weeks regularly. She also continued to teach at Stanford for the first few years at Google.
➤ Mayer quickly rose through the ranks. She started out as a part-time member of the UI team, but soon became a product manager, and by 2003 was in charge of Google’s consumer products, including its core search.
➤ Mayer also briefly dated Google co-founder Larry Page. The relationship was very discreet, and they didn’t show any affection in the office. One person described the relationship as, “Two quiet people dating each other quietly.”
➤ Mayer was named VP of search products and user experience in 2005. By then, she was already setting the agenda for the product meetings that involved Larry Page.
➤ She was part of a small group of star executives, called the “secret cabal,” according to Steven Levy who wrote a book on Google.
➤ She was great with the press, and the media loved her back too. There were rumours of Google running a separate PR team just for Mayer. That wasn’t true, but Google did have a group of PR people devoted to promoting her career.
➤ Mayer boosted her public presence by spending her riches conspicuously. She bought the $5 million penthouse suite at the Four Seasons in San Francisco, and another home closer to Google’s Mountain View campus. She’s worn dresses by designer Oscar de la Renta.
➤ But her obsessive attention to detail and data-driven management style created some enemies at Google. A famous designer named Doug Bowman quit over it, saying, “I’ve grown tired of debating such minuscule design decisions. There are more exciting design problems in this world to tackle.”
➤ Frustration continued to grow internally. One of the most powerful Googlers who didn’t get along with Mayer was Amit Singhal, the man behind the algorithms that power the search engine. He went directly to Larry Page and asked him to remove Mayer from the search team.
➤ Mayer was eventually moved to the team that managed Google Maps and local products. She was still one of the top executives, but some people took it as a “demotion,” because she was no longer in charge of Google’s most important product, its search engine.
➤ By 2011, Mayer’s great run at Google was coming to an end. But another great opportunity came: Yahoo’s board wanted her to be its new CEO. Other people discussed were Nikesh Arora, then the chief business officer at Google, and Eddy Cue, Apple’s senior vice president of Internet Software and Services.
➤ Some insiders had reservations about hiring her because Mayer didn’t have a lot of experience managing the finances of a business. She was more of a product person than an operational CEO. Regardless, the board unanimously voted her in as Yahoo’s next CEO.
➤ She started at Yahoo in July 2012. Expectations were so high that people put up posters of Mayer designed in the style of US president Barack Obama’s famous “Hope” posters.
➤ Mayer quickly overhauled Yahoo’s existing management, and brought in her own people. During her first year, Yahoo’s stock went from $15.74 per share to hovering around $28 in August 2013.
➤ But some of that success was due to Yahoo’s partial ownership in Alibaba. Until Alibaba went public in 2014, Mayer was in a safe spot because Yahoo stock was one of the only few ways to invest in the Chinese e-commerce giant.
➤ After Alibaba went public, Mayer and the company came up with a plan to sell Yahoo’s remaining stake, and hoped to avoid having to pay taxes on the sale.
➤ But revenue in Yahoo’s core business has stubbornly refused to pick up, and for the last few months, Mayer has been under fire.
➤ Even so, Mayer is credited for drastically improving some of Yahoo’s product designs and traffic to its core apps. Some people say she changed the internal culture at Yahoo and brought back some excitement.
➤ Investors were spooked in September 2015 when the US Internal Revenue Service declined to rule on Yahoo’s request for a “pre-ruling” that the Alibaba sale would be tax free. That doesn’t necessarily mean that Yahoo would have to pay taxes, but it added uncertainty, sending Yahoo’s stock down 4%.
➤ Top lieutenants have departed, like CMO Kathy Savitt and CDO Jackie Reses. Some have questioned her acquisition strategy too, where she spent roughly $3 billion to buy startups, none of which translated to meaningful growth.
➤ A hedge fund manager, Eric Jackson, sent a 99-page slide explaining why Yahoo needs new management. He suggested dramatically cutting the company’s size and jettisoning businesses like search. In January, activist investor Starboard sent a letter demanding “significant changes” over Yahoo’s management, board, and strategy.
➤ Recent reports say some Yahoo employees are losing their trust in Mayer’s ability to turn the company around. Sources told Business Insider that it plans to lay off more than 10% of its workforce in the coming weeks.
➤ Now, Yahoo is rumoured to be considering a sale of its core business, which includes its online content and advertising units, as a way to unlock the value of the Alibaba stake. Pressure is mounting for Mayer, and the clock is ticking for her to save Yahoo.
ANKUSH TIWARI 