Turning out Marissa Mayer may not have sufficient strategy needed to turn around once top technology Innovator Yahoo!
The reason why Yahoo board picked Marissa Mayer instead of interim CEO Ross Levinsohn is because Marissa planned to return Yahoo to its “tech company” roots. Ross Levinsohn has been actively campaigning for Yahoo more of a content-creating media company. This surprised a lot of people in the industry!
Netscape cofounder, Marc Andreessen said Mayer is an excellent choice for Yahoo, but Levinsohn would have been too … its clear that Yahoo’s board has decided the company should be “products”-led, not content-led.
So you think Marissa Mayer was a great choice?
– Consider this scenario, if there were no proven many product managers in tech industry who can manage companies at scale. Marissa Mayer’s a “products person,” proven product leader and she knows the Internet inside out.
Now, Why Marissa Mayer may turn out to be an excellent choice for Yahoo?
In the middle of an economic slowdown, companies with solid technology such as Apple, Facebook, Google, and Netflix is doing fairly well.
– on average they are trading 42% off their all-time highs. Their median next 12 months PE multiples are contracting, down to ~15X today versus 24X three years ago.
So now let’s take a look at traditional media companies such as CBS, Disney, News Corp, and Comcast.
– All these companies are all at, or near, all-time high stock prices. Their median projected long-term EPS growth rates have come up to 14% today versus 9% four years ago.
Wall Street expects results in months, not years.
Yahoo’s brand has been all things to all people “Jack of all trades, master of none”. Is it a tech company? A media company? No one knows.
Turning Yahoo around is going to be really tough. But can new CEO Marissa Mayer do it?
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