
Transformation at Yahoo Foiled by Its Leader’s Inability to Bet the Farm - kanamekun
http://www.nytimes.com/2015/12/03/technology/transformation-at-yahoo-foiled-by-its-leaders-inability-to-bet-the-farm.html
======
humanrebar
> Instead of making a single big bet that might have focused the company on
> something completely different and potentially groundbreaking, Ms. Mayer
> staked out a lot of small and midsize positions, rarely committing to
> anything early enough to make a difference. For Ms. Mayer, original
> programming was just one of dozens of products in a portfolio that remains
> too complex to understand.

Other sources indicate that Mayer is very much a metrics-based decision maker
(a).

I'm wondering if that's the result of putting a metrics-based decision maker
at the head of a technology company. For sustaining innovation, carefully
finding a local maximum seems fine, but in a dynamic field, you also need to
be able to make a big move based on a more qualitative understanding of your
surroundings.

As a technical contributor, I've been on-and-off frustrated my whole career by
quantitative managers asking for promises of real profit before committing to
cleaning up technical debt. There's no honest way to come up with a good
number here. You can't solve the problem thirty times and then present a high
mean and low p-value. "Keep doing what we're doing but maybe 5% better"
requires absolutely no proof, in contrast. You don't have to prove that COBOL-
based system XYZ _won 't_ blow up in your face or that frames-in-frames
webpage mycompany.com/abc _won 't_ eventually look unprofessional and affect
the company's brand.

I'm wondering if Mayer's "inability to bet the farm" is a higher-level version
of the same problem... setting the bar too high for definitive proof creates
barriers to strategic moves into areas with incomplete information.

a) [http://www.businessinsider.com/how-marissa-mayer-figured-
out...](http://www.businessinsider.com/how-marissa-mayer-figured-out-work-at-
home-yahoos-were-slacking-off-2013-3)

~~~
Steko
The article's conceit is that apparently she should have bought Netflix in
2012 which suggests some future article ideas for the author that practically
write themself: maybe Wang Labs could have been turned around by buying out
Microsoft in the 80's; maybe the railroad barons could have bought out Ford
right as the model T was going into production, man we could do this all day!

It's easy to be a visionary with 3 years of hindsight.

~~~
ZanyProgrammer
And the possibility of such an acquisition ruining Netflix. I can't imagine a
lot of Netflix engineers would've been happy to work for a dinosaur like
Yahoo.

~~~
coldtea
Why, aren't they professional engineers, working for pay? Or do they go where
its the most fashionable?

~~~
PeterisP
Experience from other acquisitions shows that this sometimes is the case.

In 'hot' professions, which at the moment include software engineering, pay is
a "hygiene factor" \- it is required but not sufficient to hold or attract
people.

While in theory the company holds all the "intellectual property", in practice
in software-related companies most of their capital simply puts on a hat and
goes away every evening; and [a change of] management, working environment and
company culture may (and does) result in losing those people.

If they eagerly joined company A to do X, then simply buying that company
doesn't neccessarily mean that they will automatically accept working in
company B doing Y even if pay will still be the same. For acquired startups,
it's very likely that their engineers had quit a company like Yahoo just
because they wanted to work for a company like Netflix instead, and would do
that once again if the situation would repeat itself.

------
iaw
I saw the writing on the wall when she cancelled the work from home policy and
forced a lot of parents to either quit or start coming into the office. While,
on the flip side she had an executive package that included day care right off
of her office.

I decided I would never work for a company that hired Marissa Mayer after
that. I screen my employers more carefully than they screen me, and that move
showed she didn't give one shit about any of hers.

~~~
discardorama
> I saw the writing on the wall when she cancelled the work from home policy

Disclaimer: I was at Yahoo when she came and implemented this policy.

It irritates me to see uninformed people making such blanket comments. You
have no idea what the policy was; I do. Let me explain it, in the hope that
you (and others with this mindset) may learn something about it, and maybe
even change their views.

There was a group of Yahoos ( < 200 ) who had a permanent work-from-home
exemption (if you can call it that; there was never much of an enforced policy
earlier). They never came in to an office (except for the occasional IT issue
and package pickup). There were a couple of incidents where these remote
workers were found to be moonlighting. So a study was done to see how many of
these remote workers actually VPNed in. After a month or two, it turned out, a
good number of them were actually working part-time. So a blanket ban was
issued, with the caveat that if you could make a compelling case, you would
still be allowed to WFH. In fact, a colleague of mine continued to work from
home after this policy change. A number of strong people continued to WFH; a
few were let go; and the rest had to hoof it to office.

Now, the mistake Marissa made wasn't with this policy; but it was in how she
didn't go the next step: _holding the managers of the shirkers responsible_.

Which brings me to _my_ thinking about why it's so hard to turn around Yahoo:
the middle management. (Please do me a favor and read PG's excellent post
[http://www.paulgraham.com/yahoo.html](http://www.paulgraham.com/yahoo.html)
after you're done reading this). Yahoo is filled with managers whose sole
contribution is survival. There is no accountability for screwing up. Fucking
up products badly has never gotten anyone fired.

Did you know Yahoo went through 3 different iterations of an attempt at a
"social network"? Each and every time, sane minds pointed out that the concept
was bad, the UX was bad, etc.; and yet the managers prevailed and it went down
in flames, as predicted.

The joke in Yahoo used to be: throw everything into version 1.0, because you
never know if there will be a version 1.1.

Marissa is failing not because she's a bad CEO (having seen Yahoo CEOs like
Terry Semel, I can assure you she's the best they've had in the last 10
years); it's because she has no supporting cast. She trusts people too much.
One manager once said to me (about her): meh, she'll be gone in a couple of
years; I'll still be around. He had been there since 2001, and had no
intention of moving anywhere. Collected fat paychecks by taking credit for
others' work. And he was just one of many, many in there. Over the years I
encountered so many people like him, where you had no idea what actually they
contributed to the company.

/rant

~~~
iaw
So why was step 1 canceling the policy and not eliminating the dead weight? I
stand by my earlier statement: the WFH policy should never have been cut and
it sent a horrible signal to potential employees. Why didn't she hold
accountable both the shirking employees and their managers who let them get to
that point?

She made a knee-jerk reaction and it was a bad call. I think all she had to do
was take the actions you describe as her 'next step.' She may be better than
those before her but that didn't allow her to succeed.

~~~
discardorama
Just to put it in perspective: I have since moved on, and then moved on again.
In both the post-Yahoo companies, the WFH policy is basically the same as that
at Yahoo under Marissa. She just brought it in line with the rest of the
companies in the valley.

As far as potential employees go: in my 14 years of interviewing in the Bay
Area, I have never, ever been asked about the work-from-home policy. That
should tell you how little an impact it has.

------
greyman
The problem is, that Yahoo didn't have any unique technology when she took
over. Creating one almost from scratch and make success with it - in such a
short time of 3 years - is quite difficult. But I tend to agree with the
author's sentiment, that she probably just didn't have any transformation
plan... she just wanted to do incremental improvements in the areas Yahoo was
strong enough.

What I am missing is why it is called a failure after such a short time. Can't
they just let her continue?

~~~
iaw
She's making nearly $1 million a month and hasn't demonstrated any long-term
initiatives that will actually make Yahoo worth anything to it's investors.
They brought her in because they thought she was a golden child and paid her
as such, it's been ~4 years and with no results. Even worse, left to it's own
devices Yahoo probably could have avoided the huge morale issues she created.

She was given huge latitude by the board to make decisions and show that they
were valid. In the end she created an environment that led to an exodus of top
talent.

She's a good high-level executive but not really a CEO.

~~~
jonlucc
I think she even might make a great CEO, but not at Yahoo. They've had a very
difficult problem to solve, and there might be a handful of people capable of
righting the ship.

------
xiaoma
>There’s just one example everyone can think of — Apple — but that effort took
nearly a decade to show results

It didn't take a decade. Apple was _months_ away from bankruptcy when Jobs
went back.

~~~
Agathos
And how does a columnist get away with writing that sentence without
mentioning IBM?

~~~
danso
By being a not very good tech columnist? The thing that epitomizes Manjoo's
work for me is when he gave a glowing review to the Apple Watch because of how
it helped him deal with all the notifications he got from his other Apple
devices.

------
pmlnr
They could have been 500px, if Flickr was addressed in time ( or just left as
an incubated project instead of forcing integration, see
[http://gizmodo.com/5910223/how-yahoo-killed-flickr-and-
lost-...](http://gizmodo.com/5910223/how-yahoo-killed-flickr-and-lost-the-
internet) ) - and maybe not with a sync-up-everything-on-first run android
app.

They could have been a lot of things but they managed to smash every potential
idea with the tight, corporate-wide integration.

They still have the Yahoo! Finance, which I believe, is without competition.
Focus on that, stay ahead of competition, if all the rest if falling apart
anyway. And start killing the rest of the services which are making less and
less money.

As much as I dislike the decisions Google made with dropping the Reader, Labs,
etc., I understand the reasoning, and that is what Yahoo should have done as
well.

~~~
coldtea
> _They could have been 500px, if Flickr was addressed in time_

Is 500px really anything to write home about though?

Seems even more marginal and doomed to fail than Flickr.

~~~
snowwrestler
Flickr gets, like, 100x the traffic that 500px does.

------
vorotato
I am constantly fascinated by the hyper-polarized views of this CEO placed at
the helm of a drowning company. Either she's at fault for not risking it all
taking out yahoo in a blaze of glory, or fault for risking large sums of money
with tumblr, or she's literally Jesus Christ. I think its wise of them to take
the middle road, and grow but not "risk the farm". Though, what do I know I'm
not in the future looking back.

~~~
colmvp
I don't know what solution they should have done. I'm not paid millions of
dollars but more importantly, I don't know what the structure and politics are
like at at that company.

But I'm amazed by how many people are willing to give Mayer a pass despite so
many people from inside the company at the C and VP level leaving for reasons
that include a confused strategy and mismanagement, specifically from Mayer,
has undermined any attempts at a turnaround.

Here's an excerpt from a Forbes piece:

> But perhaps none of these incidents damaged morale more than Mayer’s
> reorganization of Yahoo’s product teams. When Mayer launched the effort last
> fall, everyone agreed the existing structure had outlived its usefulness—for
> instance, mobile products was partitioned from other groups. But Mayer
> embarked on the process without laying out a grand vision for it. Instead,
> she began sketching out different scenarios in one-on-one meetings with
> various executives, floating one plan by one exec and a different by
> another. Unable to make up her mind, the process dragged on for months. “She
> went through 20 different permutations,” says an executive with knowledge of
> the process. “The product guys were twisting in the wind, not knowing what
> they were going to run.”

> Product releases slowed to a trickle, and a turf war brewed as executives
> became concerned with their futures. Jon McCormack, a star executive who had
> joined Yahoo in January from Amazon and was promised a broad engineering
> portfolio covering critical areas like mobile, landed in the vacuum created
> by Mayer’s indecision. He was gone by the end of February and now works for
> Google. When Mayer announced the new structure in April, it was too late.
> “That was the beginning of everyone losing faith,” says another senior
> executive. “That’s when people started to look for other jobs.”

------
lawnchair_larry
Quite a few armchair CEOs commenting here who would have done better, no
doubt.

------
chollida1
One thing that Yahoo highlights is the importance of why you need to take care
of your share price.

I've seen a few people here ask why a company would care about their share
price after they've gone public. It affects your company both internally and
externally.

Having a rising share price means you can play a different game than the rest
of your competitors.

Internaly it helps hire and retain good employees. Ask anyone who started at
Microsoft in 1990 and worked their for a decade, or Google from 2004 until
2014. I'd bet most of them would have gladly given up their salary for more
option grants.

Externally it means Facebook can pay 15 Billion for WhatsApp. I'm sure Yahoo
was very interested in WhatsApp, but

    
    
      1) couldn't justify paying 15 Billion almost 1/2 of their value for the app
    
      2) Who in their right mind would take Yahoo stock over FB stock?
    

Sadly everything is going wrong for Yahoo,

    
    
      - Alibaba's shares have dropped since they went public
    
      - it now looks like they are going to have to pay around 20% of their Alibaba holdings in tax ( about 7 Billion).
      - Anyone who is going to buy some of their assets is going to have to pick up some money loosing businesses to get a deal done, which will make negotiations much tougher and probably mean the teams that get picked up are going to be cut down
    

My new favorite theory that is floating around is that Alibaba actually
acquires Yahoo's Alibaba stake and Yahoo's front page. Microsoft still
acquires the search assets and mail. Google acquires Flickr and the fantasy
sports and finance are spun out into a new company./

~~~
sbierwagen
Maybe throw some line breaks into that second <pre> block.

------
jv0010
The hindsight comments are valid however it's definite to say that yahoo had
and has a lot more issues to get itself into a competitive position.

The comment about boring tenure definitely is big call to say the least and if
one is to judge Marisa about her efforts over her career prior and during
yahoo she was the CEO they needed.

Going into yahoo and transforming it is a big call and to draw parallels to
Apple should not be compared. It's safe to say anyone going into yahoo would
know that plugging the holes in the company was the main agenda and at least
keeping momentum of operations and brand was a realistic fix, which Marisa did
extremely well.

Tech companies with the latest and greatest innovative product is what all
general spectators love to grade a company. It's sexy it gets media attention
and creates a lot of noise within communities.

The fair way to look at her role would have been to stop the ship from sinking
and if she is to be judged as a person which this article does, her career is
dynamic and adaptable and it's safe to say no matter what the outcome any will
want her with open arms.

~~~
Retric
I don't think these comments are valid. They boil down to, how dare you
succeed without being bold. Yahoo, is a profitable company, but without the
20x multiple from crazy investors it looks like a failure.

~~~
jv0010
It may be profitable but the lack of being dominant in hardware / social /
media services / search etc is on the tip of everyone's tongue. So yes I agree
it's always beneficial to invest in the latest and greatest bold attributes to
success helps, especially in technology as it allows new connectivity, data
and information generation is a big expectation and in 2015 to put this on the
shoulders of Marisa is only 1 factor of a role as a CEO. Talent to grow is a
company wide thing and a great move Marisa has done is addressing the
importance of hiring talent and restructuring the way it operates. Whether
it's too late or not yahoo will always be the sum of its total operation which
are the holes the yahoo Ceo addressed at the early stages.

------
jfoster
I'm not convinced betting the farm was even necessary. What would be wrong
with continuing business as usual whilst attempting a larger initiative that
could deliver long term growth?

------
kingmanaz
Hated when they killed YUI. Spent several months learning the library and
showcasing a YUI3 portal to coworkers and suddenly development was halted and
Yahoo's pages pulled. Poof.

------
ZanyProgrammer
What a silly article. Yahoo has been doomed for quite sometime, and I doubt
anyone could've turned it around. But then I'm not a clickbaity tech journo.

------
fredgrott
I do not think author understood the challenge that turning-around Yahoo
presents:

1\. Decimation of core revenue by everyone moving to mobile. 2\. Core
management not suitable to face future challenges. 3\. Non manager employees
not pulling in the same direction.

It was not her job to bet the farm, it was her job to revamp the people
infrastructure and management infrastructure so that some innovative solutions
bubble up from the middle that might be tried..

------
devit
Well, the only valuable thing that Yahoo has is the brand and multi-service
portal, so what they need to do is to buy or partner with other companies to
make great Yahoo! Thing services and improve their existing ones, perhaps by
spinning them off while keeping the Yahoo! branding and some stock.

For that, they'd need a CEO with great deal-making and people skills and an
intuitive grasp of what the average person cares and is going to care about.

Marissa Mayer doesn't really seem a great fit, since she seems more of an
introvert great at perfecting a product, as opposed to someone great at
communicating and making deals, and she is also probably not very close
herself to the average Yahoo user.

She could possibly try to innovate in advertising technology though, although
I'm not sure if it's possible to much better there.

------
seunosewa
When you bet the farm, you win, or you're fired. Especially as a Yahoo CEO. So
she's wise not to.

~~~
iaw
She's received $1 million a month since she started. What does being fired
matter after a few months? It's better, in my opinion, to bet big and fail
than be crippled by paralysis.

~~~
Touche
Better for who? I don't see any reason why you would want to "bet big" at an
established company. Betting big and failing puts you in a worse position.
Sell the company to someone else and let them "bet big" if they want, or do
what a lot of failed companies do and make a lot of money as it slowly
unwinds.

~~~
iaw
So what's better? A slow death or a fast one?

As an investor I'd rather a fast death, salvage what capital I have remaining
after the death, and invest it elsewhere. A slow death means that the long-
term value of my money keeps decreasing over time as it's trapped in a weak
investment with the hope that it may improve.

As an employee, I'd rather work for a company trying to accomplish something
big than keeping the boat floating in the same direction. What's the
difference between working for Yahoo and Comcast in this context? Both of them
aren't doing anything all that innovative or interesting.

As an investor and an employee it's better to bet big and fail then to never
try. If the company was established _and_ successful I'd agree with you fully,
but the company wasn't successful for nearly a decade before they brought her
in. This, in my opinion, invalidates the 'stay the course' strategy.

~~~
kdamken
Well for her as the CEO, it seems a slow death might be favorable as she
continues banking her $1 Million a month.

------
JulianMorrison
Ugh, now I'm worried Yahoo will drag down Tumblr, which is a genuinely unique
and useful thing.

~~~
soylentcola
Tumblr is certainly popular but it always reminded me of LiveJournal: a sort
of simplified blog-lite with the ability to comment or follow pages/people
that you like. For the blogger, there's the ability to go as simple as just
posting links and images or customize your layout to some degree.

The thing that always struck me when I looked through tumblr is that
essentially all of the "comments" are just the equivalent of likes or retweets
and less actual comment threads. Always seemed like sort of a waste but I
guess people use it more like a "richer" version of Twitter without the
character limit and with easier embedding of media.

~~~
wan23
The lack of comment threads is a feature. It prevents other people from
interjecting into the story you want to tell with your blog. For example, if
you post something on YouTube it's kind of inevitable that someone will come
along and comment that they hate your face, whereas on Tumblr you can write
that comment but you have to reblog the item to your own blog to do it. Also,
your reblogs are pushed to your followers' streams but people viewing the
original post don't see it, so if you write something nasty it just makes you
look bad.

~~~
JulianMorrison
Tumblr has long supported connecting to Disqus for comments. It's just that
they are a superfluous, community breaking misfeature, so nobody enables them.

------
swang
I wonder if a big problem is that Yahoo couldn't really plant their flag on
(for example) video and completely change the company towards that rapidly.
Too many people still use the current version of their site and changing that
could have alienated people

Yahoo is still relatively popular in some Asian countries because they prefer
the everything on the same site web portal.

------
fiatmoney
You can make a large amount of money by successfully riding down a declining
business, even in the technology sector. It's just not true that bold moves
that "bet the farm" are a generally winning strategy, although pundits do like
that it generates a lot of drama.

Of course, the former isn't really Yahoo's approach either.

------
Kluny
Am I the only one who thinks Yahoo is never going to get anywhere until they
change the goddam stupid name?

------
uptownfunk
Glad I didn't pursue that role as apm lol. But always easy to say shoulda
coulda woulda

