Marissa Mayer's plan to rewire Yahoo

The new CEO has an ambitious plan to transform Yahoo into a mobile content portal, with social baked in and deep personalization to drive the user experience and monetization.

Google VP Marissa Mayer speaks at LeWeb.
Yahoo CEO Marissa Mayer Stephen Shankland/CNET

After six months at the helm, Yahoo CEO Marissa Mayer can claim a small victory. The company showed revenue growth for the first time in 4 years, up 2 percent year-over-year. However, Bloomberg's poll of analysts was looking for a 3 percent revenue boost from the year-ago quarter.

Nonetheless, Yahoo's fourth-quarter financial results indicate that Yahoo isn't going backward. Since Mayer's appointment, Yahoo's ratings have improved -- the stock price is up more than 30 percent and the cloud hanging over employee moral has largely dissipated. In fact, according to Mayer, 95 percent of Yahoo's employees are now optimistic about the company's future.

Six months into the job, Mayer has sprung for free food worldwide, ditched the BlackBerry , instituted weekly company update meetings, recruited ex-Googlers, revamped sales, launched flagship products including Yahoo Mail and Flickr, and signed deals with top content providers, such as NBC Sports and Wenner Media.

But Mayer's most important job is to articulate a vision of what Yahoo can be beyond what she has described as giving "end users something valuable and delightful that makes them want to come to Yahoo every day." That mission statement is not different from that offered by her many CEO predecessors at Yahoo.

Yahoo's iconic San Francisco billboard that no longer exists. Daniel Terdiman/CNET

A year ago, then Yahoo CEO Scott Thompson said the company needed to improve the user experience for its 702 million monthly visitors with better interfaces, faster speed, and deeper, more relevant content, and deliver better results for advertisers.

Like every other company making its living on the Internet, Mayer is placing mobile at the center of her product strategy. Yahoo currently has 200 million unique monthly users on mobile devices, Mayer said, and this is just the first phase of a shift to mobile.

In an interview with Bloomberg's Erik Schatzker at the World Economic Forum in Davos, Switzerland last week, Mayer predicted that Yahoo will be one of -- if not the -- predominant platforms in the mobile era. She indicated that Yahoo was well positioned with its comprehensive content and mobile apps for email, weather, news, sports, financial information, games and photos.

"The nice thing at Yahoo is that we have all the content that people want on their phones. We have these daily habits," Mayer said. "I think whenever you have a daily habit and providing a lot of value around it, there is opportunity to not only provide that value to the end user but to create a great business."

The idea to focus Yahoo on mobile and social echoes how Yahoo co-founder Jerry Yang described the future of the Web portal five years ago.

"At Yahoo we want to be most essential starting point for your life," and "take the complexity of the Web and simplify your life through very powerful technologies," Yang said. Yahoo would be rewired from the inside out, providing developers access to Yahoo assets that would make the consumer experience deeply social and personal.

Yang and his successors weren't able to achieve that goal, but Mayer appears ready to take on the task of completely rewiring Yahoo, optimizing its content for mobile devices, baking in social and location services, and utilizing deep personalization to improve the user experience and monetization potential.

"With the Web becoming so vast, there's so much content and there's so much social context, and now with mobile, there's so much location context and activity context," Mayer said in her interview at Davos. Yahoo's role is to provide "a feed of information that is ordered, the Web is ordered for you and is also on your mobile phone."

"In the future you become the query, using profile input to inform the result," she added.

On the social and search front, Mayer said that key partnerships will bring "a lot of strength to bolster what is on Yahoo side," which includes industry leading news, sports and finance content sites.

Speaking to analysts after the earnings report today, Mayer cautioned that achieving more substantial growth will take multiple years to achieve. It's another way of saying don't expect Yahoo to generate revenue on the scale of Google, Apple, or Facebook as its mobile advertising gets rolling. But Mayer's effort to rewire Yahoo and reinvent the notion of an Internet portal could have a big payoff. As she said signing off from the earnings call: "The best is yet to come." Time will tell.

 

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