
Diagnosing Yahoo’s Ills: Ugly Math in Marissa Mayer’s Reign - NearAP
http://www.nytimes.com/2015/12/15/business/dealbook/diagnosing-yahoos-ills-ugly-math-in-mayers-reign.html
======
steven2012
You don't get paid $360M over 5 years and get to defend yourself from failure.
She was paid specifically to fix things, and if she can't do it, she should
get 90% of that money clawed back.

That said, I think everyone associated with Yahoo has to come to grips with
the fact it will never again reach it's high status as before. It has a lot of
money, and it just goes to show you that money won't produce innovation. They
need to take that money, break Yahoo up into pieces, sell it, and then
whatever money they have they should fund 100,000 startups and see what rises
from the ashes.

The only other thing that Yahoo has besides it's pile of money is it's brand
name. People know and trust Yahoo. I would probably take that and then expand
horizontally, into things like banking, insurance, etc. Really boring things
that aren't high growth like Uber, but things everyone needs and might be
enticed to join because of the Yahoo name.

Buying things like Tumblr, Polyvore, etc are a waste of time because every
startup in the Valley is hoping to score an oversized buyout from Yahoo, and
then GTFO once their holding period is over. There is zero incentive to
continue innovating after Yahoo touches them, so don't bother buying companies
anymore.

~~~
strayptr
_They need to take that money, break Yahoo up into pieces, sell it, and then
whatever money they have they should fund 100,000 startups and see what rises
from the ashes._

We're a little crazy. Think of the families of the people who work at Yahoo.

We're also a little overbearing. Who are we to say what others should do with
what they own?

~~~
deelowe
Well, if they are a voting share holder, they kind of do get to say what
happens.

> Think of the families of the people who work at Yahoo.

Hope isn't a strategy.

------
GuiA
I can't believe how every time this topic comes up, cutting free food for the
employees is a talking point. Providing basic necessities (food,
transportation, non crowded offices, sick days, etc.) to make sure your
employees are happy and productive seems to me like step 0 of any successful
business venture. Of course don't serve them caviar and foie gras, but I
really don't get why everyone seems to think that cutting a basic cafeteria is
a vital piece of any "let's put the company back in the green" plan.

Well I do get why so many finance people think that way, it just makes me sad
that they're the ones calling the shots.

~~~
ars
It's because the article says they spent $108 million on food per year.

That works out to $38 per person per day. That's a LOT. It should be maybe
1/10 that considering that not everyone will eat the food every day.

~~~
1123581321
Google supposedly spends between $20 and $30 a day.*

Those numbers are from several years ago, so it's plausible that Yahoo needs
to pay more per employee now.

There are certainly ways to do cheaper foodservice, but probably not many ways
to do Google/SV-quality free employee food for much less.

* [http://www.businessinsider.com/yahoos-free-food-budget-5000-...](http://www.businessinsider.com/yahoos-free-food-budget-5000-per-employee-20-million-per-year-2012-7) * [http://www.businessinsider.com/2008/4/googles-ginormous-food...](http://www.businessinsider.com/2008/4/googles-ginormous-food-budget-7530-per-googler)

~~~
trhway
>not many ways to do Google/SV-quality free employee food for much less

may be they brought me into a wrong cafeteria :) - when i went for an
interview at Google, the food was so-so, and in no way beating a $10 lunch at
a typical commercial place (and even less so a $20 lunch at a restaurant). A
colleague of mine went there recently for some business meeting - the same
impression about the food.

~~~
asb
Sure, but that doesn't tell you anything about the cost to Google of providing
that food, including at unpopular times etc.

------
chollida1
Here is the funds presentation about yahoo if you are interested. For what its
worth, I think the fund significantly overplays their hand as to how effective
their turn around plan would be. [https://regmedia.co.uk/2015/12/14/yahoo-
springowl-presentati...](https://regmedia.co.uk/2015/12/14/yahoo-springowl-
presentation.pdf)

The one thing that I do think the report gets right is yahoo's head count is
way too high. They should have a head count of around 4000/people to be in
line with their Peers wrt revenue/employee.

I think the biggest issue Yahoo faces is that their competitors are Facebook,
Google and Microsoft. And Yahoo is trying to run itself like those companies.

When you have huge piles of money coming in every quarter then you can spend
freely on acquisitions to try and buy talent teams and products to jump start
your company. Or put another way, making huge sums of money hides alot of bad
decisions.

Yahoo, unfortunately isn't making piles of money and this makes it very hard
to compete when your closest competitors each have large near monopolies to
generate money. Yahoo just has no margin for error, and its not really clear
that even if they did everything right, that they could turn the company
around.

It would be like Canada trying to fight a war with the US, no matter how well
you execute, you'll loose in the long run as your enemy has almost unlimited
funds compared to yourself.

Unfortunately during Mayer has destroyed alot of value during her tenure.
Without Alibaba and Yahoo Japan, Yahoo is down almost 40% since she started.

Bring in a new CEO, cut head count very deeply so you don't have to do it
again.

------
staunch
> _" Marissa Mayer is a hero for taking on the challenge at Yahoo."_ -Marc
> Andreessen

Only in the confused world of Silicon Valley is accepting $100M+ to fail
considered heroic. Giving the money back would be kind of heroic.

Steve Jobs took a nearly bankrupt company and turned it into the richest
company in history. And he didn't care about making money off it at all, or
he'd have been the richest person in the world too. That's heroic.

Elon Musk put 100% of his personal fortune into risky world-changing startups.
That's heroic.

~~~
gramakri
> Elon Musk put 100% of his personal fortune into risky world-changing
> startups. That's heroic.

I wasn't aware that Elon Musk put in 100% of this personal fortune in his
ventures. Source?

~~~
trhway
[http://www.businessinsider.com/how-elon-musk-overcomes-
chall...](http://www.businessinsider.com/how-elon-musk-overcomes-
challenges-2013-3)

"In 2008, struggling Tesla nearly collapsed during the financial crisis. When
Tesla needed cash to fund the Model S, Musk chose to bankrupt himself — giving
up the money he earned from his success with PayPal — rather than let it die.
He sunk his last $35 million into the company, the New York Times reported."

------
grandalf
I hope Yahoo! succeeds. My $0.02 on how to fix it:

\- fix the navigation across all Yahoo! properties. Google does a solid job of
this. It's clear what is google, what is gmail, what is google analytics, app-
engine, etc. Yahoo has no such clarity.

\- apply SEO to the Yahoo! site. If I search for "yahoo domains management",
Google (or Yahoo) should take me to the correct landing page.

\- Yahoo for "business" services are very opaque and it's not clear where to
go to see a unified list of things one has access to, particularly domains.
Google also does a solid job of this (though worse over time, oddly).

\- When I see the Yahoo logo I sort of cringe. Make it smaller and less
obtrusive. Purple means "visited link" on the internet.

\- Don't let scammers use your affiliate program. The BitTorrent installer
installs malware that makes Yahoo the default search in all browsers on the
user's computer. This is a horrible representation of your brand.

\- The smart TV developer portal has been down for a few days (at least). I
wanted to make an app for my new TV but can't read the documentation.

\- People inside the company probably know all these things. If they are not
incentivized or rewarded for doing something about them, that is probably the
root of whatever cultural problems exist there. Everyone should feel some
pride and ownership, and want to fix obvious glaring issues. Someone should
probably have presented you with plans to fix all these things. Promote that
person.

~~~
jpadkins
those are all tiny product details that won't fix the company. I am not saying
you are wrong, I am saying there is a bigger reason why all those product
defects exist. It's the culture. It's the talent.

~~~
rezashirazian
I don't know, I think what he is saying are small steps toward the overall
goal of fixing the company.

There isn't a magic bullet with Yahoo. They gradually lost their dominance and
succumbed to irrelevance. The fix will also be gradual and with small steps

------
karmacondon
The media's Mayer pile on is getting old. Every article is focused on her
personally, as opposed to the company as a whole. I understand how echo
chamber effects and memes work, but this seems a bit extreme even for the
internet.

It's like blaming someone who dropped a last second touchdown pass for losing
the game. Yes, it would have been nice if that player could have done a better
job. But it would also have been nice if everyone else on the team hadn't made
any mistakes either, making a last second play unnecessary.

She was very well compensated for failing, but that doesn't mean that she
acted in bad faith. Many executives have compensation packages that are
heavily based on performance. Apparently hers wasn't. Ultimately there is a
lot of blame to go around for the demise of Yahoo!, not the least to other
half dozen CEOs they've had in the last decade or so. You win the fight today
based on the preparations and positioning you did years ago. For all her
mistakes, that's not on Mayer.

------
WalterBright
I've tried several finance portals, and Yahoo's is far and away the best. With
a single url, I can get a snapshot of the stocks I'm interested in, thumbnails
of the day's performance, links for more detail, etc.:

[https://finance.yahoo.com/quotes/GSC,AAPL,EBAY,JPM,NOK,LLY,S...](https://finance.yahoo.com/quotes/GSC,AAPL,EBAY,JPM,NOK,LLY,SPY,XLK,YHOO/view/v1)

~~~
PhantomGremlin
Finance is still usable, but has been getting worse.

For example, they used to have "basic charts" that were clear and easy to
comprehend. Then they removed that feature (but kept the link in the sidebar
for many months). The remaining "interactive charts" are IMO not as easy to
comprehend. Also they are missing features. E.g. with the old charts it was
easy to quickly see when historical stock splits had occurred. With the new
charts you have to hover over each big "S" icon.

It all smacks of 2nd rate people putting in a 3rd rate effort, just to show
they're doing something. But what they're doing is by no means an improvement
to what was there previously.

Edit: forgot to mention that, compared to Yahoo, Google Finance is a pathetic
joke. It's a night and day difference. It's like Google is actively trying to
be bad.

Surely there must be a finance portal that's better. I wouldn't mind paying
for something good.

~~~
WalterBright
I am a little surprised, since the people who code those sites are likely to
be investors, so wouldn't they notice immediately if they aren't good?

------
tlogan
I wonder why people think Yahoo! was not fixable.

I have been using Yahoo! Email (from time when it was sbcglobal), Flickr,
reading Yahoo! Finance, and having Yahoo! News as my home page. I do not use
any of these any more.

Here is my list how to fix Yahoo!:

1) fix Yahoo! Email (MS did it with outlook.com - Yahoo! could do the same)

2) fix Flickr (i.e., API should work, iPhone upload, some IA, etc.)

3) fix Yahoo! Finance (I remember that they disabled Yahoo! groups for stocks
at one point of time - after that flop they never recovered)

4) fix Yahoo! News

I'm not really sure what needs to be "fixed" but something so I can start
using the above service again.

Or maybe to build something new.

------
vessenes
In 2007, Jobs famously told Yahoo it had to choose a path

    
    
        Yahoo needed to decide whether it would focus foremost on media or technology, 
        Jobs told the small group of assembled executives, according to one 
        executive who attended the meeting. -- BusinessWeek, 2009
    

I can't find the quote now, but one exec said they knew he was right, but they
just couldn't decide. I think this conundrum continues to be at the heart of
the Yahoo! problem -- they just can't decide.

The SpringOwl proposal essentially says Yahoo should just get with the program
and be a Media company. And, I like that pitch. The playbook is essentially:

1) Massively cut staff, and some other one-time things like real estate

2) Stop trying to compete on hard tech like search, because they can't beat
Google or Facebook

3) re-monetize the home page and create a more walled garden by creating apps
that kick ass over competitors (note these are now media competitors) and are
directly fed by the media channels that are working: they like finance and
sports to start.

To me, this plan reads well, although I don't buy the austerity on top of
layoffs angle -- who would continue to work there? One way or the other,
you're going to have to provide a competitive comp, upside and lifestyle story
unless they move to Kansas.

I don't know if it really gets the value creation they say it will, but if
well executed, I think this is a believable way for Yahoo! to carve out its
best shot at a niche and audience. If I imagine a Yahoo Finance app made by
truly great devs up against any number of competitors, I think it could be a
win. Same with say fantasy sports apps, team-oriented apps, all those could
tie together very well.

------
interesting_att
The article brings up the important point on Yahoo's acquisitions. For the
billions it spent, it got barely anything in return. The real canary in the
coal mine was Summly. Mayer paid 30M for an app that licensed its core machine
learning (which is why she bought the app in the first place). Unsure how
anyone could have expected Tumblr to be a smart acquisition at that price.

------
rdlecler1
Yahoo is the MySpace of search. She raised it's profile but ultimately there's
very little Marisa could have done to change that. If NetFlix was clearly such
a great investment at the time it would have been worth what it is today.

------
aj7
Mayer was given garbage. She realized this very quickly. The aim then shifted
to maximal extraction of money from the corpse. This is best accomplished with
a a lot of smiles and earnest window dressing.

------
sremani
I am genuinely curious, Tencent (of China) looks very similar to Yahoo! esp.
being portal business, why are they flourishing and why the heck can Yahoo!
not copy Tencent's strategy. It looks very obvious to me, that Yahoo should be
more like Tencent and probably have Hulu/Vimeo, Whatsapp/Telegraph or whole
slew of mobile apps and games etc.

~~~
azurezyq
Tencent is one of the most successful social network company ever, which Yahoo
is nowhere close. The social as of Tencent as a business has been good for
years. If Yahoo just copies the product and the strategy to launching more
social + mobile apps, it still needs more years until successful (if it can).
Think about G+.

------
webdevb
Not surprising, considering her policy on banning telecommuting :
[http://www.pcworld.com/article/2038639/why-yahoos-
telecommut...](http://www.pcworld.com/article/2038639/why-yahoos-
telecommuting-ban-is-still-bad-for-business.html)

------
martin1975
Perhaps it's time for Icahn to 'save' Yahoo?

