The legacy of Marissa Mayer
SAN FRANCISCO — The slow demise of Marissa Mayer as Yahoo CEO reached its inexorable end Tuesday.
Nearly five years after she took on the job of turning around the gasping Internet icon, Mayer exited the scene with the completion of Verizon's acquisition of Yahoo. A new business, combining Yahoo and Verizon property AOL, called Oath, will be run by AOL CEO Tim Armstrong.
Mayer resigned when the transaction closed. "Verizon wishes Mayer well in her future endeavors," Oath said in a statement.
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In a Tumblr post titled "Nostalgia, Gratitude & Optimism," Mayer said, "Looking back on my time at Yahoo, we have confronted seemingly insurmountable business challenges, along with many surprise twists and turns." She said Yahoo had successfully navigated those hurdles "and mountains in ways that have not only made Yahoo a better company, but also made all of us far stronger."
The 42-year-old Mayer leaves with more than $200 million worth of Yahoo stock and options — and a golden parachute worth $23 million — according to securities filings.
Mayer, who all but vanished the past year after a highly-visible start at Yahoo, had no further comment.
Her resignation was inevitable, analysts say, once Verizon agreed to buy Yahoo's digital assets for $4.8 billion — since amended to $4.48 billion following the disclosure of two large customer-account hacks under her watch — and the remnants of Yahoo was renamed Altaba. "Mayer took on a challenge that may not have been solvable," says Jeff Kagan, an independent tech analyst. "She tried her best, but it wasn’t good enough."
The legacy of Mayer, once hailed as a Google-trained savior when she was tapped as Yahoo CEO in July 2012, was decidedly mixed. Under Mayer, company shares rocketed 254%, from $15 to $53.12, outpacing the tech-laden Nasdaq Composite's 112% gain.
The stock performance was greatly boosted by a Yahoo's prior investment in Chinese e-commerce company Alibaba, which went public in 2014 in the biggest global IPO ever. Even so, it was a welcome respite from the performance of past CEOs. She was the Silicon Valley company's seventh CEO, a list that included Scott Thompson (disputed resume), Ross Levinsohn (interim) and Terry Semel (who commuted from Southern California.) And she was inheriting a ship taking on water: Google and Facebook had eviscerated Yahoo's once-healthy share of online advertising worldwide. Yahoo's net ad revenue is projected to decline to $3 billion this year from $3.32 billion in 2015, according to eMarketer.
"She had a fairly good run, but got all the bad breaks," says Bill Klepper, a management professor at Columbia Graduate School of Business. "How can you stop a Russian hacker? And she got hit twice."
Marissa Mayer's diminishing legacy at Yahoo
As Yahoo scrambled to compete in an era increasingly dominated by mobile apps and social media, it welcomed a charismatic figure in Mayer who had earned her bona fides as an early Google employee. She hit the ground running with an aggressive strategy of acquisitions and executive hires, and graced a magazine spread in Vanity Fair as one of the world's most recognizable female CEOs.
But Mayer's Sisyphean task was undercut by a series of miscues, some of which she had a hand in. There were two massive data breaches that affected hundreds of millions of Yahoo accounts. The wisdom of acquisitions such as the $1.1 billion purchase of social media site Tumblr were questioned. And high-salaried employees like Katie Couric, paid a reported $10 million a year, didn't bring in viewers or generate much buzz.
"She came in with a very, very daunting task," says Greg Sterling, a contributing editor at Search Engine Land, a site that covers the search industry. "She was asked to revive the ad business when Facebook came along with superior technology and Google made a push into display ads."
Yahoo’s core business was squeezed by chief rivals Google and Facebook, and by upstarts Instagram and Snapchat.
"Every successful company rides the growth wave until it crests and falls. The secret is to create the next growth wave before the first one collapses," analyst Kagan says. "This has been the challenge of so many companies like AOL, BlackBerry, Nokia and more. It was the challenge of every Yahoo CEO — they all failed."
No matter how one sliced the numbers, it didn't add up for Mayer & Co. Google and Facebook last year owned 33% and 14%, respectively, of the $190.6 billion digital advertising market worldwide. Yahoo and Verizon's AOL and Millennial Media units owned 1.6% and 0.7%, respectively, according to research firm eMarketer.
Then were the internal politics at Yahoo, where former executives criticized Mayer's management style as brusque and inflexible.
And yet a strong personality and vision was necessary for Yahoo to move on — and Mayer provided it, Sterling and others argue.
"She did a good job in building a search business that didn't exist, and re-establish Yahoo's credibility in the market," Sterling says. "She re-invigorated flagging morale and the brand name. People, in time, will see her as someone who shepherded the company to its next phase, as part of Verizon."
For Mayer, the next phase is anyone's guess. While some expect her to lay low for a while and make tech investments, others foresee an eventual comeback as CEO. "She's young; we haven't seen or heard the last of Marissa," Sterling says.
Follow USA TODAY's San Francisco Bureau Chief Jon Swartz @jswartz on Twitter.