Why Yahoo and Marissa Mayer's Over Reliance On Alibaba Could Spell Trouble

DavidGilbert99 writes "Marissa Mayer has been in charge at Yahoo for one year now. In that time she has seen the share price rise 70% and she's made some headline grabbing acquisitions — notably Tumblr for over $1 billion last month. However, look beneath the surface and things are not going so well. In this week's quarterly results, we saw ad sales fell by 12% year-on-year and as Alistair Charlton says in IBTimes UK: ' Yahoo earned $846m in cash by redeeming its shares in the group, representing a significant chunk of Yahoo's $1.07bn revenue for the quarter, down 1% on last year. ... The next few years will be a balancing act as the stabilizing wheels are removed and Yahoo, with dozens of acquired startups patching up the rust, will have to make progress under its own steam.'"

Comments

Income source

[schneidafunk]

What exactly does Yahoo sell? Do they even have a mission statement? Personally I do not understand why they didn't sell to Microsoft when they had the chance.

Re:Income source

[Anonymous Coward]

Ads. The same Google sells and Microsoft's Bing group sells. Yahoo is behind in the game, but the balance can change very quickly. The reason for that being that in the end it's about how much traffic you get and social network effects can make traffic grow or shrink at an exponential rate.

Re:Income source

[xxxJonBoyxxx]

>> What exactly does Yahoo sell?

As a Yahoo webmail user, it appears that they sell an annoying little ad that looks just like an email entry and gets inserted into your list of emails. When people click on it (I've done it myself a couple of times by accident), some stupid mark gets charged and the clicker makes a mental note to never buy anything from that advertiser again.

Re:Income source

[Minwee]

What exactly does Yahoo sell?

Yahoo! Sells! Exclamation! Marks!

Yahoo! Mission Statement

[eldavojohn]

What exactly does Yahoo sell? Do they even have a mission statement?

From several investor calls she has said:

“Yahoo is about making the world’s daily habits more inspiring and entertaining,”

Which is a little more positive and slightly better than Yahoo!'s previous mission statement:

"Now open up all your little fucking birdie mouths because Papa Yahoo!'s got a big juicy unwanted browser toolbar to slam down your goddamn throats."

Confusing luck with talent

[Anonymous Coward]

Most of those "superstar" business executives are no better than their college classmates. They just happened to land in the right company at the right time.

I don't believe that Mayer has CEO super powers. She was lucky to have worked at Google at a time when it was poised to take off. Putting her in charge of a wounded beast like Yahoo is a completely different ball game though. I don't know that she actually has the chops to handle that kind of situation.

The problem with Yahoo is that it's an aimless company. Essentially an answer to a question nobody asked. Everything that used to make Yahoo special, somebody else now does better. They either get back on top in search (unlikely) or find something new to excel at.

Re:Confusing luck with talent

[TheRaven64]

There's an old stock market scam. You open 100 accounts. You invest randomly. After a week, roughly half will be turning a profit. You close the ones that aren't, and do another round of random investing. Again, roughly half make a loss, half a profit. After a few rounds of this, you have lost quite a lot of money, but you have one account that looks really stellar - huge returns on investment. You then open this up to investment, with the disclaimer that past performance does not guarantee future results, and wait for the money to roll in (you can then invest this in your own companies, or just take it and run away).

Much the same applies with CEOs. You take a few thousand business graduates each year and put them in management positions. They all make random decisions. Then you cherry pick the handful that have made decisions that turned out well. Then you say 'Superstar CEO, please pay enormous salary'.

Duh...

[Anonymous Coward]

They've existed by cashing out their own property ever since she came on board. It's corporate cannibalism designed to make her look great at the expense of the company and its employees.... yet she is lauded as the second coming of Joan of Arc or something. The next few years will see her jump ship just before the company takes yet another nosedive, which will probably be attributed to her loss of leadership. It's fucking disgusting to anyone who is paying attention.