Yahoo’s New CEO – Corporate
Renewal – Current Event
When
the outlook of a corporation begins to look gloomy or investor expectations are
not being met, there are three directions that a company can take. First, the company can do nothing. I know this sounds funny being listed
as a specific direction, but this is the case many times. Maybe it would be to costly to turn it
around or maybe it can’t be turned around or maybe the problem is not realized
until it is too late. Second, the
CEO and other executives scrap the strategy and begin with a new strategy. This can be costly. Third, the board can get rid of the CEO
and bring in new blood. All three
are different directions and are a part of corporate renewal. Which direction to choose can be left
to the board or company executives.
Yahoo
has been going through a corporate renewal phase of its own over the last 5-6
years. Yahoo has had five
different CEO’s over the past five years.
This sounds like they have taken the third direction I mentioned earlier
to the extreme. This has
happened because of yahoo’s inability to beat out the competition. Yahoo was an early entrant into the
Internet industry but has not been as insightful as Google or Facebook. Advertisers are now paying more than
ever for marketing space on the Internet, yet yahoo has failed to attract such
advertisers. Yahoo’s image and
financial growth has been taking a hit for many years now. However, Yahoo feels that it has its
leading lady whom will take them out of the rut and put them back in the driver
seat.
Marissa
Mayer is the 37-year-old ex-Google executive that has been charged with the
monumental task of turning around Yahoo.
Up until know she was mainly known as Google’s 20th
employee. Mayer has an impressive
resume and is looked up to in the industry by many of her peers. There are many that sing her praises
and know she is up to the task.
Stock’s rose by 2% upon the announcement of her new position at Yahoo.
How
does this change in direction affect Yahoo now and in the future? This question can’t be answered fully
right now because there are too many variables. Obviously there is more excitement around Yahoo and there
will be many that are eager to see the new direction or strategy that Mayer
will implore. Investors should be
more optimistic as well as good employees that add value to the firm. I am sure this was the case when the
other CEO’s were hired as well.
The difficult part for Mayer will be to show improvement quickly and to
come up with a strategy that all will help to fulfill. This is a place that many employees
have been before so Mayer is going to have to earn respect quickly and show
that this time it will be different, in a good way.
References:
Mark, this brings up a great point. Yahoo for a long while now seems to be having trouble finding its footing in this market. From great blunder in their choosing of execs or not taking advantage of the dynamic search engine market. Yahoo in my opinion seems to be a dinosaur in the search engine market and seems to have trouble adapting. If you look at their search engine they seem to still be stuck in the early 2000's. They try to feed you so much info ont he search engine page and seems like google and bing seem to popular due to their ease of use. It will be iteresting what Mayer has in planned for such a historic brand as yahoo is.
ReplyDeleteI agree Jose. I can't remember the last time I used yahoo to search for anything. I don't even know what there search page looks like. It used to be the one and only. Mayer seems to be sharp and it will be interesting to see if she can make any changes.
DeleteHi Mark, you bring about more thinking on this news. I think a new CEO will bring one corporation completely different new ideas and thinking, but the result always cannot be correctly predicted ahead of time. Hope Yahoo’s new CEO can explore new creativity and innovating ideas, and make Yahoo to have better performance in future. In my opinion, it is impossible to rely on just one person to change a company completely. To make a company different, it needs to collaborate with the collective wisdom to arrive at the goals.
ReplyDeleteGood point Raymond. I also think that it takes more than just changing the CEO to bring about change but it certaintly won't hurt. It can be very difficult to see how the change will reflect on Yahoo.
DeleteFrankly, I don't see a way out for Yahoo. Their main business model of being able to sell more ad space on the website has been challenged by literally every other website in the world.
ReplyDeleteThe search engine is not their own anymore so that must be paying some fees to use that service and it could be cheaper for them to rent service rather than investing large sum of money in maintaining the infrastructure required. However, they have lost their edge in whole scheme of things going around. Chat engine market which was popular in youth has been captured by Skype and other more efficient - free from junk and spam chat engines.
Personally, other than finance.yahoo.com, I don't really feel like using Yahoo anymore.
I wonder, what else Yahoo is doing ....... If we they are doing and we are not aware, may be it is not publicly known.
I think, they will need to come up with radically new stream of money making business strategy which will give them some chance to survive??
Sameer you have made some points that I have thought. The new CEO has her work cut out for her. Great points on the aspects of their business that have been taken away by more efficient and better overall competition. I think the new CEO will have to reinvent the company in order to survive. They are simple being outdone by their competition. I imagine they have vast resources and put them in play in another arena.
DeleteYahoo entered the market in 1995 while Google followed yahoo in 1998. Even though Yahoo had the first mover advantage & disadvantage, Google got the late mover advantage. Yahoo has many weakness amongst which I think are Yahoo's email, search engine & web portal are major weaknesses. Due to poor management of their weaknesses they are not able to capture advertisement market. Even though they have new CEO who was the product manager & executive at Google. Success of Google was not due to only one person but it was because of the strong team of smart people they had in Google. Therefore Yahoo needs to hire group of smart and talented people who has some innovative ideas to make Yahoo profitable in the future.
ReplyDelete