Yahoo Inc. reached
inside the ranks of rival Google Inc. in
its latest changing of the guard, appointing longtime Web-search executive
Marissa Mayer as its new chief and returning the struggling Internet company to
a leader with deep technology experience.
The appointment showed how Yahoo, a onetime pioneer of Web search
and online advertising, is going back to its Silicon Valley Internet roots.
Yahoo's board selected Ms. Mayer because "she stands for the
user," in contrast with a string of the company's previous CEOs who had
little experience with consumer websites, said a person with direct knowledge
of the company's CEO search.
In particular, Yahoo's board members—including the three newest
directors led by hedge fund manager Dan Loeb, who joined in May—pushed the
Sunnyvale, Calif., company to find a product expert who could make Yahoo more
relevant to today's Internet users, said this person.
Ms. Mayer, 37 years old, had long been on the Yahoo board's
shortlist of CEO candidates, said people familiar with the matter.
Talks with the Google vice president increased in the past few
weeks after an initial approach on June 18. The board felt that someone with
Ms. Mayer's stature—she was employee no. 20 at Google and helped design the
look of the now-dominant search engine—would especially help Yahoo attract new
talent to develop new Web services, said the person familiar with the CEO
search.
In naming Ms. Mayer, Yahoo passed over interim CEO Ross Levinsohn,
who had overseen the company following the exit in May of Scott Thompson, a
former president of eBay Inc.'s PayPal, over some misstated credentials. Mr.
Levinsohn, who couldn't be reached, has a background in media and ad sales.
Inside Yahoo, reactions to Ms. Mayer's appointment ranged from
shock and delight among some company's employees who work on its various Web
services, to disappointment among some employees in the company's important
sales arm who had been following a relatively new strategy initiated by Mr.
Levinsohn.
Other managers privately expressed concern that yet another CEO
would lead to reorganizations and attrition could accelerate.
In recent years, the company has gone through a revolving door of
CEOs, including Mr. Thompson and Carol Bartz, who was
removed in September. Ms. Mayer becomes Yahoo's sixth CEO in five years,
including two interim CEOs.
As head of 17-year-old Yahoo, Ms. Mayer will try to orchestrate
one of the most notable turnarounds in corporate America. Yahoo's revenue has
receded in the past few years as companies like Google and Facebook Inc. have
siphoned away users and advertising dollars.
Yahoo has also faced pressure from activist investor Mr. Loeb,
while co-founder Jerry
Yang and other directors have left the board. That has resulted in an
almost brand-new board, opening the way to Ms. Mayer's recruitment.
After Ms. Mayer joins Yahoo's board, nine of the company's 12
directors will have joined this year, including four since May.
In an interview, Ms. Mayer said, "Yahoo is a company with an
amazing following, terrific brand and huge amount of potential."She added
that she is "just very excited to work with the many talented employees at
Yahoo to take those products to the next level."
In a statement, Yahoo chairman Fred Amoroso cited Ms. Mayer's
"unparalleled track record in technology, design, and product
execution" and said those make her "the right leader for Yahoo."
In a statement, Yahoo chairman Fred Amoroso cited Ms. Mayer's
"unparalleled track record in technology, design, and product
execution" and said those make her "the right leader for Yahoo."
Ms. Mayer's departure is the latest exit from Google, where
executives like Sheryl Sandberg have
jumped ship in recent years to companies such as Facebookthough Google retains
a deep bench of talent. Ms. Mayer is the most visible departure since Google
co-founder Larry
Page, who she once dated, was appointed CEO of the Internet search giant in
April 2011.
Ms. Mayer said after she broke the news of the Yahoo job to
Google's leaders, she received positive encouragement from Mr. Page, executive
chairman Eric
Schmidt, and company co-founder Sergey Brin.She also posted on Google's
social networking service Google+, writing that she's "incredibly
excited" to be taking on the new job.
In a statement, Mr. Schmidt praised Ms. Mayer as a "great
product person" and added that "Yahoo has made a good choice."
He added that he gives Ms. Mayer and Yahoo his "best wishes."
Wall Street appeared to welcome the move, with Yahoo's stock
rising 2% to $15.96 in after-hours trading after the CEO appointment became
public.
Yahoo's strategy has shifted in recent months under its changing
leadership, causing some investors to wonder what the company's direction will
be. With Ms. Mayer, analysts expect a focus on Yahoo's core online advertising
business.
"Marissa gets both search and display advertising," said
BGC Partners analyst Colin Gillis.
Ms. Mayer made clear Monday that "advertising will continue
to be the main revenue source" at Yahoo. She described Yahoo's position in
online display and search advertising as "strong" and added that she
hopes to "inject some innovation and some new ways of advertising"
into its business model.
Ms. Mayer said didn't know whether Mr. Levinsohn would be staying
but said she had reached out to him on Monday. She said she planned an initial
visit to Yahoo headquarters as CEO on Tuesday, her first day as CEO.
With Ms. Mayer's selection, there now are 20 female CEOs of
Fortune 500 companies, according to Catalyst, a nonprofit New York group that
researches women's issues. Altogether, 41 women run Fortune 1000 companies,
Catalyst figures show.
Ms. Mayer joined Google in 1999 and led many of its well-known
products including the look of the search engine. Most recently, she was
responsible for initiatives related to local businesses and spearheaded
Google's acquisition of Zagat, the business-reviews site and spearheaded
Google's acquisition of Zagat, the business-reviews site.
Last year, after Mr. Page became Google CEO, he promoted a handful
of executives to lead business units such as Android, Chrome and commerce and
local initiatives—but not Ms. Mayer. She has a computer-science master's degree
from Stanford University and recently joined the board of Wal-Mart
Stores Inc. WMT -0.27%
Ms. Mayer is known as a talented manager with an occasionally
brusque style that can make her difficult to work for, according to people who
have worked under her. She has an obsessive attention to detail, often
micromanaging details down to the shade of colors in new product designs, these
people say.
She's well-known throughout Silicon Valley, in part for her
elaborate parties that regularly draw the tech elite. They include a Halloween
pumpkin carving bash and an annual winter holiday party where she erects an
ice-skating rink in the backyard of her
Source : The Wall Street Journal | Management