April 8, 2016  /  Larry Hirschhorn

In this post I explore the reasons why Marissa Mayer, the CEO of Yahoo!, Inc., has failed to revitalize the company. When she took office in 2012, third quarter revenue was $1.2 billion. Third quarter revenue in 2015 was also $1.2 billion. I point to several possible limitations of her leadership. First, while some journalists have suggested that she was too cautious and did not make a “big bet,” I argue that CEOs make big bets only when facing crises. Yahoo, paradoxically, did not face a crisis because it owned so many shares in Alibaba, the Chinese Amazon. When the latter went public, Yahoo made a windfall profit of $9.4 billion at a time when its annual operating income was only $200 million.

 

I suggest as well that Mayer tended to focus too much on organizational processes rather than business ideas. This reflected her managerial rather than her leadership orientation. This stance was reinforced by her conception of the leader as a servant— that is, someone who removes obstacles to her follower’s work, as well as her belief that a company’s culture is like DNA. It cannot be changed. Instead, it can only become the best version of itself.

 

Finally, I argue that Mayer's engineering background and orientation led her to see Yahoo as a portal and the web as infrastructure, discounting the emotional content of the web as a system that blurs the distinction between fantasy and reality. Drawing on a personal experience I had with Second Life, the virtual reality website, and the Oscar nominated short film Stutterer, I suggest that while art always takes us to the boundary between fantasy and reality, the web has made this boundary more permeable and intensified our experience of crossing it.

 

I suggest that while Google succeeded by building a company based on the engineering orientation, Yahoo's failure signals that there is room for only one Google. I end with the question of whether or not Mayer could use the concept of the emotional web as a foundation for more creative business thinking.

 

The full blog post may be read here.

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