Should Yahoo CEO Marissa Mayer be fired?

30 Nov 2015 | Author: | No comments yet »

If Yahoo Sweeps Mayer Out, Who’s In?.

SunTrust Robinson Humphreys Internet equity analyst Robert Peck, in a report issued Monday, said the investment banking firm had discussions with tech industry people and investors about the situation. SAN FRANCISCO — Marissa Mayer’s nearly four-year attempt to turn around Yahoo needs a turnaround itself, repeating a pattern of futility that has hobbled one of the Internet’s best-known companies for the past decade.With Yahoo (NASDAQ:YHOO) CEO Marissa Mayer potentially on the ropes over the Web portal’s poor financial showing in recent months, an analyst on Monday released a roster of 10 potential replacements — and the list sports prominent names including former Yahoo executives Ross Levinsohn and Dan Rosensweig. Like her predecessors as Yahoo CEO, Mayer has been unable to snap the company out of a financial funk, despite spending billions on acquisitions and new projects.

Investors and analysts alike have voiced their concerns regarding Marissa Mayer’s ability to facilitate a much-needed turnaround for the company’s core business and as such have called for her ouster. The most frequently mentioned were Scout Media chairman Ross Levinsohn, a former Yahoo interim CEO, and Chegg CEO Dan Rosensweig, a former Yahoo COO. “Most of the people that mentioned their names cited not only their public CEO leadership, media and technology acumen, but also their deep intimacy with Yahoo’s inner workings,” Peck wrote. “Much as Jack Dorsey was seen as uniquely qualified to be Twitter’s CEO for his intimate knowledge of Twitter, many point to Mr Levinsohn and Mr.

Others on SunTrust’s list: CBS Interactive CEO Jim Lanzone, former DoubleClick CEO David Rosenblatt, Google President-Americas Margo Georgiadis, General Electric CMO Beth Comstock and Linda Yaccarino, the chairman of Advertising Sales and Client Partnerships at Comcast’s (NASDAQ:CMCSA) NBCUniversal. “We underscore that we are unclear what the board and CEO might do and compile this list merely to address the investor questions we are getting on “if not Ms. Activist investor Jeffrey Smith, of hedge fund Starboard Value, is urging Mayer to abandon a spinoff of the Yahoo’s most valuable asset — a $30 billion stake in Chinese e-commerce giant Alibaba Group — and sell the company’s Internet business instead.

If Mayer continues down her current course, Smith is threatening to lead a shareholder mutiny aimed at overthrowing Yahoo’s board next year — a rebellion that, if successful, could lead to her ouster. She has pledged that Yahoo’s revenue will eventually increase at the same clip as overall digital-advertising revenue, something the company hasn’t come close to doing yet. The research firm noted a few important characteristics to evaluate the potential CEO on, based on its discussion with investors and industry experts. It still might happen if Mayer’s big bets on mobile applications and online video pay off and Yahoo gets the all-clear from the feds to use Google’s search technology to attract more traffic and sell more advertising. According to several industry experts, the company should be led by an individual with a good public CEO experience, and a particular focus on the internet space that could lead Yahoo toward long term growth.

Other names on the “not likely” to be interested list: AOL CEO Tim Armstrong, Ariana Huffington and Softbank COO and former Google executive Nikesh Arora. Mayer’s approval rating among those who posted on the employer-review website Glassdoor.com has fallen to 73 percent from 99 percent after her July 2012 hiring. Rosensweig for the same attributes.” On Nov. 19, a significant Yahoo investor, Starboard Value, called for the troubled Web-portal operator to sell its ailing core Internet search business. Mayer has repeatedly expressed confidence that Yahoo is heading in the right direction, most recently during her October review of the company’s disappointing quarterly performance. “I have very aggressive expectations for Yahoo’s core business,” she said. “We have the right talent, the right strategy and the right assets to drive long-term sustainable growth for our investors.” Yahoo’s revenue fell 8 percent from the previous year after subtracting the company’s advertising commissions, its steepest decline since Mayer became CEO.

Some unsubstantiated reports suggest that Yahoo plans to unveil a digital assistant to compete against Apple’s Siri, Google Now and Microsoft’s Cortana. Now Mayer is drawing up plans for another major shake-up, one likely to eliminate hundreds of jobs as Yahoo sharpens its focus on “fewer products with higher quality,” as she said in October. The big purge: Many investors believe Yahoo remains bloated, given that its net revenue has fallen from $5.4 billion in 2008 to a projected $4 billion this year.

The departures have included two of Mayer’s top lieutenants, former marketing and media chief Kathy Savitt and former development and acquisitions chief Jacqueline Reses. In an apparent attempt to placate Wall Street, Mayer plans to jettison an unspecified number of services that have either been losing money or are barely making money. The about-face in Starboard’s position follows the Internal Revenue Service’s decision in September not to rule on the tax-free status of the Alibaba spinoff until after the transaction occurs, which could mean a tax bill of billions of dollars for Yahoo if the IRS ultimately rejects tax-free status for the transaction. “Given the overwhelming likelihood that the Aabaco spin is treated as tax-free,” Peck said SunTrust maintains a buy rating and price target of 40 on Yahoo stock. Mayer bought dozens of startups to bring in more engineering expertise in mobile devices and overhauled Yahoo’s apps for weather, sports, Flickr and email. She made big splashes by hiring former NBC News anchor Katie Couric to handle online-video reports and acquired the trendy blogging service Tumblr for $1.1 billion.

National Association of Realtors (NAR), the firm that reveals monthly housing index, announced that pending home sales for October represents an increase of 3.9% from an year-ago period. That holding — in retrospect, Yahoo’s best investment ever — soared in value as Alibaba’s e-commerce bazaar boomed, prompting investors to snap up Yahoo shares in order to profit while Alibaba was still privately held. In a press release, NAR chief economist, Lawrence Yun announced that major contributors for sales growth were recorded in the West and Northeast region “which hasn’t seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country.” Competitive metro regions, especially in South and MidWest weighed down the growth in contracts signing in October due to increased housing prices and low inventory concerns.

However, the overall house buying activity is on an upward track as existing home sales have been pushed up by more than 5 million for eight consecutive months. None of Yahoo’s services rank among the top 50 free apps in Apple’s store, and the company’s expansion into original video programming resulted in a $42 million charge to account for the duds. Kessler likens Mayer’s plight to a star quarterback who signs with a National Football League franchise that’s in the doldrums. “When the quarterback starts out, people get very excited about the potential and opportunities,” he says. “But when the performance on the field turns out to be less than stellar, people are understandably going to blame the quarterback that came in with so much fanfare.”

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