Firing Marissa Mayer from Yahoo would be a huge mistake

The New York Times Magazine ran a scathing article about Marissa Mayer two weeks ago, adding fuel to the meme that she’s failing at leading Yahoo out of their lost decade — and that she has to get fired.

It’s complete bullshit and, frankly, embarrassing for the Gray Lady to have published.

tl;dr: Marissa has accomplished a ton, and she should be judged after seven years & $10b in acquisitions–not 30 months and $2b. This piece was designed to sell books and get page views — it doesn’t match the reality of how hard these turnarounds are.

Six not-so-quick points regarding Yahoo under Marissa follow.

[ Click to Tweet (can edit before sending):  ]

  1. Talent & Acquisitions
    Yahoo was a complete disaster when MM joined: A half-dozen or so folks have tried to shepherd the company during the last decade and at no point has anyone succeeded at making the place in any way competitive at acquiring startups or talent.

In our business, the most talented people have an array of absurd options. If you’ve done anything with moderate success, or if you have elite technical ability (top 20%), you are looking at everything from becoming a venture capitalist (short hours, high pay, no stress) to creating your own startup funded by the insane amount of cash sloshing around the streets of the Bay Area (higher stress but complete control of your destiny).

Heck, I know people in the top 25% of the tech market who have joined Google, gotten paid six figures and literally do 20 hours of work per week. Google prints money and I’m told that they are more than happy to pay you to not compete with them. The way they think, I’m told, is that if there is a chance that you’ll do something productive in the actual 1,000 hours you work there per year it’s worth them not maximizing their value on your time. They are probably right, too: a .001% improvement on tens of billions of dollars in advertising revenue is huge!

Today people actually want to sell their companies and go work for Yahoo. This is 100% due to what Marissa has done. She made the place liveable again. It’s not in the top 20 places anyone would choose to work in the Valley — but you would no longer get laughed at for saying you were going to work at Yahoo.

On the measure of ’desirability to talent,’ Marissa’s tenure is a huge success.

  1. The Steve Jobs comparison
    The piece was given the insane title “What happened when Marissa Mayer Tried to Be Steve Jobs,” and goes to painstaking lengths to paint Marissa as being delusional in thinking she is Steve Jobs.

I’m not BFFs with Marissa, but we hung out a half-dozen times when she was coming up at Google. She’s a geek who got lucky enough to join one of the super-unicorn rocket ships that leave Silicon Valley every five years or so.

She does not think she is Steve Jobs — the article just fabricates that to make her look silly. That’s what the link-baiting press does today: they literally make shit up to get you to click the headline.

In this case, the author isn’t an NYT employee. He’s an up-and-coming writer from the masters of linkbait: Business Insider. Yes, the same Business Insider that brought you the headline & slide show of “why people hate jews!”

[ ]

The story comes to the conclusion — and makes it the headline — because Marissa pointed out to her board and team that Steve Jobs didn’t make the iPod until he was well into his second tenure at Apple.

Oh yeah, Marissa read a Steve Jobs quote at an all-hands meeting.

News flash: every F-ing CEO in the Valley quotes Jobs at every meeting. Steve Jobs is our collective Jesus — he’s worth quoting!

  1. The Henrique De Castro disaster
    In an effort to get Yahoo’s revenue issues fixed, she bet on a former Googler named Henrique De Castro. In order to get him, Yahoo had to give him a $60m package to make up for the lost Google stock options he would leave behind.

It’s a sick amount of money, to be sure, but over four years that’s $15m per year. It’s maybe 4x what he should get — but we live in competitive times and Marissa took a big risk.

It looked even worse because, I think (someone please confirm if they can — it’s not public/clear), the value of that stock almost doubled during his short tenure. He walked away with over $100m for 15 months of work.

Sickening to be sure, but Marissa has to make bets like this when running a company at this scale.

If she had three or four examples like this it would be a proof point. With only one example, it’s just “gotcha!!! journalism.”

  1. The Content Strategy
    Mayer has no idea what she is doing when it comes to content — but she’s learning. She made a bunch of bad bets on bad talent like former NYT journalist David Pogue. Pogue is considered a laughing stock in the gadget industry. He’s the type of reporter that has no following and has never had to generate page views for himself.

So, he got a huge pay day (probably $1m a year), trading on his NYT gig. Good for him, bad for Marissa.

Marissa made a similar mistake hiring Katie Couric, who although delightful on TV, has exactly zero pull online.

So, she learned a valuable lesson that I learned a decade ago: being famous in one medium rarely translates into a second (see Michael Jordan/baseball, William Shatner/singing, etc).

The truth is, Yahoo’s best business move is to go all in with content — and specifically video content. So, Marissa is doing exactly that and she’s learning that she — like 99% of Silicon Valley — has zero talent in picking content.


Now she can simply hire someone who is an expert in the content business — and she will.

The CEO shouldn’t be picking the programming. That’s why TV networks & movie studios buy their content from producers, production companies, etc.

Marissa has either learned this or will come to that conclusion when she reads this sentence: the better you know technology the worse you probably know good art. Get help.

  1. The Personality Quirks
    Here’s a shocker: a powerful tech lead, worth hundreds of millions of dollars, has a couple personality quirks and might not have the highest EQ.

The piece points out the “GOTCHA!” meme where Marissa eliminated work-from-home jobs (couple of hundred), while at the same time building a nursery next to her office.

Yeah, that’s bad timing and a little clueless — but certainly not intentional. The fact is, at that time Yahoo had a ton of folks who needed to go and the remote folks were a good starting point for a company that needed to cut thousands of jobs.

You know the number one complaint from most savvy shareholders of Yahoo stock? Marissa hasn’t cut enough people! Damned if you do, damned if you don’t.

If you’re a new mom trying to balance a baby and firing a bunch of other parents who work from home? BBQ sauce. You’re roasted.

Now, there is a personality trait that many have documented in the past: Marissa making folks wait for her. Jason Shellen, a seasoned tech executive mentioned this when he was on This Week in Startups.

Watch this clip about “waiting for Marissa” (52 minutes in) from June of 2013 (a year into Marissa’s tenure):

A number of my friends mentioned this to me back in the day. Making adults wait outside your office is just insulting. Running behind 30 minutes or an hour? Acceptable. Rescheduling? Acceptable.

This is quirk, and a bad one, but I have to think that Marissa has self-corrected and thought “gee, do I want people considering coming to work for me to think I’ll debase them by making them wait outside my office like students waiting for a headmaster at a private school? No.”

In a related personality section they talk about Marissa being massively late for a meeting with ad executives. That’s just unforgivable if you’re trying to turn around a company. Again, I’m sure Marissa is learning that no matter how rich, powerful, or successful you are you have to keep up social graces.

Martin Sorrell, the most important man in all of advertising, actually took Mayer to task on stage about not returning his emails during that same event. He told Mayer that Sheryl Sandberg from Facebook always responds to him.

Seems obvious to me, but Sheryl’s a serious extrovert, and I would guess Marissa’s an introvert. Could be that simple.

[ SIDENOTE: You know what, I’ve emailed Marissa and Sheryl about a half-dozen times in the past five years each (normally to invite them to a keynote/fireside chat at the LAUNCH Festival, sometimes about a startup I’ve invested in).

Looking back on it, Sheryl has personally gotten back to me each time and Marissa has literally not returned an email from me in years. Not that I’m anyone important, and certainly I’m all of 1.3% as important as Sir Martin Sorrell (a literal Knight). However, Marissa did respond to my emails when she was coming up. Whatever.  ]

She probably needs to work on some style issues. I mean, you should never underestimate anyone. Which means you should be gracious to everyone.

But look, the article’s biggest thread is about her personality traits — which is why it’s the biggest section here. The truth is Marissa is probably half as quirky as the average person in her position of power.

Which leads one to a small set of conclusions: 1. She’s a woman, so they treat her even more harshly, 2. She’s craved the press for a decade, doing a ton of fashion magazine pieces, so she is bankable for page views.

It’s probably a little of both. Live by the press, die by the press.

  1. Finding a YouTube (or Instagram)
    Marissa has two simple jobs: 1. Stabilize Yahoo’s core businesses (i.e. get Yahoo Mail, Yahoo Finance, Yahoo Sports, Yahoo Search, etc. to grow within 50% +/- its competitors), and 2. Keep buying companies in the hopes of finding a YouTube or Instagram.

Google’s $1.6b purchase of YouTube is the greatest in the history of acquisitions in any industry. YouTube would be worth $75b if it were a public, standalone company right now — and growing.

Facebook’s $1b purchase of Instagram was one of the 10 best acquisitions of all time. Instagram would be worth at least $25b if it were a public, standalone company right now — and growing.

If Marissa can keep Yahoo steady, the board and shareholders should give her $2b a year to acquire companies for the next 10 years.

If you can make three or four big bets a year, over 10 years, I think you can find your YouTube.

It is worth noting, that with the exception of search and gmail, Google’s other biggest hits were acquired: Android (2005, $50m), Applied Semantics (2003, $102m; became AdWords) and YouTube.

Heck, we just found out that Google bought — didn’t really build — their self driving car:

Google has spent tens of billions on 170 acquisitions we know of (they probably have covertly bought dozens more).

Marissa should be given the ability to do something similar if the goal is to truly bring Yahoo back to prominence. Chances of Yahoo buying a transformative product? 50%+!

Chances of building a transformative product? I’d say well under 10%. Perhaps 1%.

OK, my 600-word piece is now 2,000 so I will stop.
In summary

Conclusion: The piece is a hit job and Marissa is doing an amazing job. If you’re a shareholder who thinks there is a better option than supporting the person who has saved the sinking ship in under three years, then you are a complete moron.

To those morons calling for her ouster here’s a simple test: how did the last couple of CEOs with the job do? Oh yeah, they ran it into the ground!

If I was on the board (would never happen), I’d advocate for seven years and $20b in acquisitions.

Don’t believe what you read, even in the New York Times.

best @jason

PS – The LAUNCH Festival, which Marissa passed on for year four of four 🙁 , is taking place on March 2-4th. We have 10,000 folks coming … make us the largest startup conference in the world.

PPS – The LAUNCH Ticker will save you an hour per day of reading the news, and the LAUNCH Ticker Pro will introduce you to three under-the-radar startups per week. My private research team is second to none in the startup space, so signup here:

Leave a Reply