Yahoo's new CEO, a longtime Google exec, becomes one of Silicon Valley's most powerful female figures even as she faces big challenges in crafting a content strategy for the troubled web giant.
Since becoming Yahoo CEO two years ago, Marissa Mayer has been the center of intense scrutiny. A former Google executive, Mayer was drafted to turn around the once great Yahoo, but her tenure has been marred by odd strategic decisions, attempts to jump onto the premium TV bandwagon, courting star journalists and celebrities, management issues and flat revenues, according to a lengthy piece in The New York Times Magazine.
One of the notable revelations from the piece is Yahoo courting Gwyneth Paltrow — a best-selling author of cookbooks and head of the successful lifestyle blog Goop — to be a contributing editor of Yahoo Food. Mayer eventually “balked” at hiring the Oscar-winning actress, as she “disapproved of the fact that Paltrow did not graduate college.” The Times piece notes that Mayer “habitually asked deputies where they attended college.”
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Mayer’s initial appointment in the summer 2012 was met with a great amount of positive press, and Yahoo’s stock rose during her first six months on the job. Tech industry analysts believed that she had put the company on the right path to her stated aim of competing more regularly with the Big Four — Apple, Google, Facebook and Amazon — of Internet businesses.
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After the honeymoon period, Mayer’s gargantuan task at Yahoo became apparent. The Times piece outlines how, given its competitive disadvantages, Yahoo could not compete with Google on search or Facebook on social media, so Mayer devised a strategy to buy up hot startups (she outbid Facebook for Tumblr) and make more premium must-read and must-see content on Yahoo’s existing platforms to sell ads against.
At the beginning of 2013, Mayer became more and more interested in the content side of the business, asking that “programming decisions be run by her” and meeting people like Anna Wintour, editor-in-chief of Vogue, to look at content collaboration possibilities. Mayer also became “infatuated” by the success of Netflix’s move into premium TV production following the success of House of Cards and Orange Is the New Black and called on her Yahoo content team to commission similarly high-quality shows. The Times notes that “[o]ne Yahoo executive was forced to explain that only a company that sold subscriptions to consumers could expect to make money off such expensive productions.”
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Undeterred, Mayer pursued a strategy of snapping up top-tier video content and creating digital magazines. Yahoo revived the critically acclaimed Community and is in talks to bring back Enlisted. The company also paid an estimated $10 million per year to exclusively show Saturday Night Live‘s 38-year archive all on its Yahoo Screen platform. The aborted talks with Gwyneth Paltrow were also part of the same strategy. Similarly, Mayer hiring ex-CBS Evening News anchor and Today show host Katie Couric as Yahoo’s “global anchor” in a $5 million-a-year deal was part of an attempt to create more original video content.
Mayer’s content ideas have so far failed to take off, and only the company’s stake in Chinese Internet giant Alibaba, which partially went public a few months ago, has kept the more strident criticism of her strategy at bay. There is a growing chorus of shareholders who believe Yahoo should sell its Alibaba stake, shrinking the company from a market cap of $30 billion to $5 billion, and then merge with AOL. Mayer is so far resisting such calls, but time isn’t on her side anymore.
