The managerial culture of yahoos


Yahoo is under new management, and according to the business media this week it's up to talented Marissa Mayer to "pull a Steve Jobs" to turn around the company.

Marissa is clearly no Steve, though that's not entirely a bad thing. Where Steve was the industry's iconoclastic, Baby-Boomer bad boy and college dropout who started out in his parent's garage, Marissa is the preternatural Gen-X good girl. She's also blonder and decidedly more beautiful than Steve, if that matters.

Unlike risk-taking, laterally shifting Jobs, Mayer has been on a single fast track. She graduated with honours from Stanford and went on to get a Master of Science degree in computer science, specializing in artificial intelligence. Soon after she joined Google as employee number 20 in 1999 and moved up the corporate ladder from engineer to senior management.

For all that, I don't expect that dramatic turnaround to happen at Yahoo under her watch. It's not that Marissa Mayer isn't a smart enough product developer or because she's a woman or lacks political savvy. She's got it all and more. She's even expecting a baby; how could anyone not love that? I also predict that after she leaves at Yahoo her future will be as golden as she is.

I wish her luck. But turning companies around isn't about skilled management. Apple is a good example. Its board swapped out Jobs in the mid-80s to bring talented management on side, and look how that worked out. Fortunately, Apple still had Jobs playing safety in the background. Yahoo is pretty much an orphan in that department.

And just where is Yahoo these days? What kind of company is it? What actually would "save" Yahoo and why should we care? Since its inception in 1994 or 1995 (depending on how one defines inception), Yahoo has bounced around as much as its name suggests. By 2000 Yahoo was at the top of its game with its stock topping out at $500 a share before settling in at $475.

After that, it survived the dotcom meltdown and launched into an eight-year run of acquisitions and new product development, trading in a couple of CEOs along the way. By 2008 Microsoft made a $44.6 billion bid for the company and later that year co-founder Jerry Yang, sitting in the CEO's chair for just 18 months, resigned.

Enter Yahoo's first female CEO, Carol Bartz, a very Steve Jobs-like Boomer who, in an effort to stem the red ink, slashed staff even deeper than Yang had, and read the riot act to the rest. By 2010 she was voted "the most overpaid CEO" at $47.2 million and by the end of the next year she'd been fired. Over the phone no less. So I guess that fix didn't take.

Meanwhile, Mayer's old alma mater Google followed a remarkably similar path in acquisitions and new products. And its new product strategy has not been an across-the-board success.

Of course there are Google's blockbuster hits like its search engine, Analytics, Google Maps and Earth, the Android OS and Chrome browser. But products like Google+ are languishing far behind competitors like Facebook, and then there's Twitter, running a race with no competition at all from Google or anyone else.

And the list of discontinued Google products is as long as your arm. It includes Google Buzz, Video Player, Google X (a Max OS X-like interface), University Search, Google Sets (a colour-coded organizing system), Search Mash, Google Trends and something called Google Lively, a 3D animated chat feature. To say that product development is the key to success would be accurate only to a point. In Google's case there may be such a thing as product over-development, though it can certainly afford it.

And from the outset Google has been as much of an innovation buyer as it's been an innovator. Among its purchases include building blocks for its famous search engine, Ad Sense, Blogger, Google Earth, Picasa and even Android.

But this kind of deep product development is likely something that Yahoo can't afford, either in time or money. Yahoo needs a winner out of the box. It could have been either content, something that players like the Huffington Post are better at, or product. But Yahoo's board has chosen product.

Conveniently, Marissa Mayer has been sitting on the Yahoo board, which certainly would have provided a natural opportunity to make personal contacts and lobby her own point of view, before being chosen as the new CEO. It wouldn't be much of a stretch to conclude that she tilted the table toward product, since that's the part of the business she knows.

But all of this is just so much ancient history now. Where can Yahoo go from here?

Well, at the end of the day it's all about the product, perception and the customer. Going back to the old marketing gurus, Al Ries and Jack Trout, there are only three leaders in any segment leaders and only one of those is the outright dominant player.

In desktop operating systems it's Microsoft Windows vs. Apple OS vs. Linux. Ever since 1985, when it was laid over the ubiquitous MS-DOS, Windows has remained the dominant player. In mobile OS it's iPhone vs. Android vs. Blackberry, and we can all see how that's going.

Today Google still dominates the search engine category. Yahoo dominates, well, nothing.

And it won't take inventing another line extension (or add-on product) to "save" Yahoo. It will take inventing another completely cool new category, like the iPad or even humble little Pinterest.

In case you missed it, the operative word here is "cool." The Internet, as a whole, is now two decades old and a rapidly maturing industry. It has moved from Gen-Xers, to Gen-Y, to even younger cohorts, and they all have their own sense of cool. The Internet is now moving, inexorably, from form and function to fashion. And fashion is arguably one of the most arbitrary, highly specialized and competitive businesses there is.

One thing that Yahoo is definitely not, and that's fashionably cool. And unfortunately, as glossy an insider as she seems to be, neither is Marissa Mayer. Yes, she's probably a very agreeable public face and a capable manager and has good product development skills.

But greatness in business requires that special je ne sais quoi of leadership that managers, no matter how great, never seem to have: that mix of gnaw-your-leg-off competitiveness with an uncanny instinct for inspirational design.

So, sorry, Yahoo. I just don't get why we'd need you any more.

Comments

  1. How about because it is more stable, easier to use and more secure than Google or almost anything else out there currently?

    Don't mess with my Yahoo!

    ReplyDelete
  2. I would say that's a good start. Security has also one of BlackBerry's strongest suits, and it's failed to capitalize on that strength as well. So far, the only company that's made a success of stability (safety and reliability) has been Volvo. Perhaps, with a good marketing company...

    ReplyDelete

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