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CMO Zone

Yahoo Now Appears Headed Toward A Sale Of The Company

The reporting surrounding Yahoo has taken a very negative turn in the last month. An example is the New York Times’ piece this weekend about a “brain drain” at Yahoo and declining employee morale. Another is last week’s CNBC hearsay story about Yahoo’s programmatic video business being “rife with ad fraud.” A growing number of […]

Greg Sterling on January 11, 2016 at 7:38 pm
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The reporting surrounding Yahoo has taken a very negative turn in the last month. An example is the New York Times’ piece this weekend about a “brain drain” at Yahoo and declining employee morale. Another is last week’s CNBC hearsay story about Yahoo’s programmatic video business being “rife with ad fraud.”

A growing number of reports like these are contributing to a perception that Yahoo’s time as an independent company, or at the very least, CEO Marissa Mayer’s tenure, is coming to an end.

Six months ago, Yahoo was showing momentum in mobile and other areas of the business, though core display advertising continued to struggle. Then tax uncertainty and a reversal surrounding the spinoff of the company’s remaining Alibaba shares, as well as persistent criticism of Yahoo management by hedge fund and Yahoo investor Starboard Value LP, have fueled a change in perceptions of the company and its outlook.

A drumbeat of rumors lately suggest the company is preparing to sell itself, perhaps to AOL buyer Verizon. However, company representatives deny that it is currently pursuing a sale. A restructuring with significant layoffs is also supposedly imminent — as much as 10 percent of the company’s current workforce, or 1,000 people.

Regardless of which of these scenarios is true or partly true, it does appear that CEO Marissa Mayer’s time at the company is probably coming to an end. Some institutional investors are taking the position that she’s had her chance to turn the company around and hasn’t succeeded.

I believe that Mayer has probably made mistakes but done about the best job possible with what she inherited. The major challenge she faced was more powerful rivals in Facebook and Google. Yahoo was never going to be able to reclaim its prior leadership in the display ecosystem.

It’s not clear who might have been able to do a better job or what the strategy should have been. Mayer’s ability to make big acquisitions was limited by investors’ demands that Alibaba cash be returned to them. So potentially bolder moves (save Tumblr) were arguably foreclosed by investors.

Mayer wisely acquired Flurry and Brightroll (the source of the alleged ad fraud article) and emphasized mobile, video and native advertising. Indeed, Yahoo helped popularize and make the case for native.

The increasingly critical perceptions of Yahoo, fueled partly by real events but also by negative coverage and rumors, creates an atmosphere of self-fulfilling prophecy. A sale of the company or of its most valuable assets now has the feeling of inevitability.

And while that might be good for shareholders, it would undoubtedly be bad for most employees — and probably ultimately for Yahoo itself.


Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.



About The Author

Greg Sterling
Greg Sterling is a Contributing Editor to Search Engine Land, a member of the programming team for SMX events and the VP, Market Insights at Uberall.

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Channel: CMO ZoneYahooYahoo: Business Issues

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