Yahoo is Changing, Thanks to Marissa Mayer

4 minute read
Dan Berthiaume avatar

Change is afoot at Yahoo, and new CEO Marissa Mayer (formerly VP and public face of key Yahoo rival Google) deserves the credit. In a discussion during the most recent Yahoo earnings call that has generated rave reviews from high tech and financial pundits alike, Mayer laid out how and why she plans to institute some significant changes -- designed to shake Yahoo out of the type of situation former President Jimmy Carter called a “malaise.”

The Q3 fiscal 2012 earnings report results were mixed. Revenue was US$ 1.2 billion, down 1% year-over-year, but net income was US$ 3.6 billion, compared to US$ 293 billion a year earlier. Following is a review of some of the significant changes Mayer says she will institute at Yahoo.

Who Needs a Mobile Platform?

Yahoo is planning to up its mobile activities in a big way, but launching a proprietary platform is not part of the mix. As reported by The Street, Mayer said “one of the advantages here is that we don't have a mobile operating system because it allows us to operate and innovate and provide our products across all the different platforms.”

However, Yahoo is eyeing a more cohesive and coherent mobile strategy. PaidContent quotes her as saying Yahoo has 76 apps across Android and iOS, but this must change. Mayer cited Yahoo’s leadership in providing content already prized by mobile users, such as weather, videos and games. Moving forward, the company will attempt to better position itself in the mobile arena based on the strength of these services.

Searching for Revenues

The Street also reported Mayer saying search is a top priority for Yahoo, with potentially “more upside” than display. Yahoo hopes to continue powering the Microsoft Bing search engine and recognizes there is an opportunity to “improve monetization” from search, although there are already “very compelling” opportunities around search-related brand advertising.

No Pivot Required

According to The Telegraph, Mayer said “I don't think this is a situation in which there's a giant pivot and we go into a completely different business.” Instead, Yahoo plans to partner with a variety of companies providing complementary technologies and services, and also refocus on how it delivers basic online services.

Small Deals are the Best Deals

MarketWatch reports that Mayer said Yahoo plans to boost growth through small acquisitions. “We don't have particular acquisitions in mind today,” Mayer said. “We do need the flexibility where we see something that lines with our business and provides terrific growth and we can make that acquisition.” Mayer made it clear that Yahoo is “looking for smaller scale acquisitions that align well overall with our businesses."

Learning Opportunities

Careful Expansion

Yahoo, which just left the South Korean market, plans careful expansion in local and international markets, according to paidContent. “We will stay where we see opportunities for growth on desktop or mobile,” said Mayer, and “withdraw where we don’t see growth.” Mayer did not rule out local expansion but said it requires “deep investment, a lot of people, energy and time to build terrific listings.”

Customers, Not Content

Mayer joined Yahoo in July 2012 to much fanfare. In a guest column for CMSWire, content management author/consultant Gerry McGovern opined that her arrival would coincide with Yahoo shifting its focus from content to customers. “A content focus generally leads to dead ends and a whole raft of bad practice,” he wrote. "Focus on the customer instead and what they want to do."

“The difference in approach and thinking may seem subtle and academic, but it is critical to success," he wrote. "Content thinking and technology thinking are classic organization-centric approaches. People don't want to get to the 'book a flight' tool. They want to get to Dublin from London .. for most people, content or technology is not the end, not the point.”

By stating a desire to focus on providing consumers platform-agnostic mobile access, deepening search functionality and partner with companies that provide things its customers want but don’t currently have, Mayer seems to be steering Yahoo away from content and toward the customers. Since the customers have the wallets, it is probably a wise course to follow.

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