The Mayer Factor: A Forecaster's Take on Yahoo's Future
Photo: Joi Ito/Wikimedia Commons
By Sam Scott
Silicon Valley forecaster Paul Saffo, JD ’80, has made a career of peering into the technological future. In the case of Yahoo, best known for its web portal, the future struck him as exceptionally bleak. In November, Saffo, managing director of foresight at Discern Analytics and visiting scholar in the Stanford MediaX research network, penned a piece for the New York Times warning that the “hour is late for Yahoo” in its search for a committed new leader.
We asked Saffo what Yahoo’s July 16 hiring of Google executive Marissa Mayer as CEO means for the company’s future—and why everyone is so aflutter about Mayer, ’97, MS ’99.
You wrote last year that “the odds are long, but with the right leadership and a recognition of its roots, Yahoo could still write a dramatic turnaround story.” How does Mayer’s hiring shift the narrative?
It looks like a move that is both brilliant and desperate on the part of Yahoo. I think this is pretty much their last chance. They’ve gone through CEOs in very short order so this better be right or they’re in big trouble.
I think it’s an inspired hire at a couple of levels that range from deep substance to building brand and attention. All anyone is talking about around Silicon Valley [this week] has been the hire of Marissa, and Wall Street has noticed as well. It hasn’t really affected the [company’s stock] price but suddenly everyone is paying a lot of attention.
Why do people care so much about this story, the new CEO of a company in a downward spiral?
Everybody loves a comeback-kid story; and you have an unusual individual here. [Mayer is] absolutely brilliant. She’s very visible as a personality in the Valley. She has an interesting history, at moments controversial. And in a way her star could never be higher than it was at the moment before she accepted this, [while the] Yahoo star was steadily sinking. It’s just a source of endless fascination.
[For Yahoo,] this is the Hail Mary pass. . . . It’s still going to take time to turn this around, and the question is, is there the time that Marissa and the rest of the Yahoo team will need? I think they’ll cut her slack, but I bet you the market is going to say we’ll give you two quarters—I think she’s got to do something dramatic immediately—and she has maybe 12 months. She doesn’t have to complete the turnaround, but it really has to be convincing within 12 months.
Yahoo’s motive in the move seems obvious, but why would Mayer leave the heights of Google for such a long-languishing competitor?
I think Marissa is the only person who knows why she did it. But lord knows, she has demonstrated that she is extraordinarily hardworking and extraordinarily ambitious.
There’s a contrary narrative that suggests Mayer was a lucky early hire at Google who alienated others with a roughshod management style. How do you read that take?
In Silicon Valley, I’ll take luck any day. There is no question that Marissa is wicked smart and if she’s lucky as well, let’s hope her luck holds. We’ve all heard all the stories about her management style and everything else. She’s had periods in her career when she was a hard manager, but honestly, she was kind of young—still is young—and Silicon Valley is famously full of people who are difficult managers.
For all the hype, can a single person even right a ship as big as Yahoo?
When all the pieces line up right, absolutely, if they have the right combination, you know, of vision and implementation. She’s got a hell of a network in Silicon Valley. A lot of people who worked for her at Google and are in her network have gone elsewhere and I suspect she’s going to be reaching out trying to pull in some of her old team.
One tricky aspect is that, on the bright side, she has the relationship with Google and maybe there is potential there. Even though Google and Yahoo are competitors, there may be ways the two companies can cooperate.
The one thing she is going to have a little problem with is, she has a choice: She can either poach executives from Google or she can try and partner with Google, but I doubt she can do both.
Is collaboration possible? Will Google take her exodus as betrayal?
That has to do with interpersonal relationships between her and her Google colleagues. But Silicon Valley is a place with a long tradition of people walking out the door and starting a competing company. It started with the "Traitorous Eight” who got fed up with Shockley Semiconductor Laboratory and started Fairchild Semiconductor [in 1957].
Of late you have lots of companies that cooperate in situations when they could be competitors. Look at how long Apple and Google cooperated and how long [then Google CEO] Eric Schmidt was on Apple’s board. So I think there’s a real sense in the Valley that one has to be sophisticated about these things.
There are certain execs who don’t like to cooperate, but I think it’s entirely possible that Google and Yahoo could find ways to cooperate, particularly if [Mayer] pushes Yahoo in a direction that doesn’t bump up against Google.
Another aspect of the story is, of course, Mayer’s ascension to the short list of women in Silicon Valley executive offices. How significant is that part of the story to you?
Well, the fact remains we still don’t have enough women in senior management or in the CEO office. And until we do, everybody is always going to remark on that when a woman has the job. I, for one, fervently look forward to the day when women in the CEO slot are so unremarkable that we don’t say this.
That said, on the bright side, we have people like [Facebook COO] Sheryl Sandberg; and then on the downside we have had a string of women CEOs who have been quite dreadful. What always worries me every time is, if a guy fails they go, “What an idiot.” When a woman fails in the CEO job, everybody goes, “Yeah, you know women CEOs.” And so we need some wins here. We need some women CEOs who are just really successful. I am really hoping Marissa pulls this off.
What are Yahoo’s challenges?
What they desperately need, they need a strategy and they need to stick to it and we’ve heard all sorts of rumors about the strategy. They were talking about a media strategy that the interim CEO had been leading. Everybody is saying they are going to a so-called product strategy, whatever that is. They’ve got to pick a strategy and they’ve got to stick with it.
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