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Mayer could pull off 'epic turnaround' at Yahoo

Sharon Gaudin | July 18, 2012
On Marissa Mayer's first day as CEO at Yahoo, she has to figure out which problem to tackle first to right a company that has been buffeted by scandal, financial trouble and, possibly worst of all, growing market invisibility.

Olds said Mayer's experience makes her the right person to take over control of Yahoo.

"I think that she's finally the right hire for Yahoo," he added. "She has the right pedigree and experience, plus she knows how to work in a large organization. Being Google's 20th employee, she also knows how to foster the corporate culture of an innovative and successful company. Bringing Yahoo back is a tall order, but I think she's the right person for the job."

By all expectations, it will be a big, messy job ( ) .

Last September, Yahoo pushed out then-CEO Carol Bartz. In January, the company hired Scott Thompson, president of eBay's PayPal division, as its CEO. Five months later, Thompson was out amid a public scandal surrounding the inaccurate reporting of his academic credentials. For the second time in eight months, the company was, not only in an embarrassing spot, but was without a CEO.

If that was all Mayer has to contend with, that would be a challenge. However, Yahoo has seen its share of industry troubles, as well.

The company started out as an Internet pioneer but slowly slid into the online background. Industry upstarts, like Google, Facebook and Twitter, have overshadowed Yahoo and it has lost user mindshare over the years.

Tuesday afternoon, Yahoo reported revenue for the second quarter of 2012 of $1.2 billion, essentially flat compared to the same quarter a year ago. Income for the period was $190 million, down $1 million from the same quarter of 2011.

"It's a bit of a train wreck," said Enderle. "But this could be an epic turnaround. Mayer is more qualified to run Google than [Google CEO Larry] Page is. She has better people skills and has the rounding needed by a CEO. You basically have the person who should be running Google running Yahoo. Pretty much anything can happen."

Over the course of the last eight months, reports surfaced both Microsoft and Google were trying to buy Yahoo. Some analysts thought selling would be a great option for the struggling company.

But now with Mayer at the helm, analysts say that option is likely off the table.

"I think bringing her in makes it obvious that selling the company isn't what the board has in mind," Olds said. "And I don't think she would have signed up for the job if it entailed taking Yahoo to the chop shop and selling off the parts. I think the only way they could land her was with a challenge that she couldn't get anywhere else - a place where she can prove herself, apart from Google and the vast success she's experienced there."


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