Yahoo COO Dismissed

 Further problems for Yahoo and CEO Marissa Mayer make its comeback less likely.

I saw recently on Linkedin where Marissa Mayer gave COO Henrique de Castro his walking papers. It’s unfortunate, as it indicates a couple of things:

1. The organization is still struggling a year  and a half or so after Mayer came on board

2. Her current strategy isn’t working

de Castro was Mayer’s first major hire as president and CEO of Yahoo. He was previously Google’s VP of Partner Business Solutions, and his role at Yahoo was to increase advertising revenue. From what I’ve been able to see on this, Yahoo’s display advertising revenue fell by 7% in the last quarter of 2013. They now sit third behind both Google and Facebook, respectively. de Castro was given a $64.6M severance package as well as an uncharacteristically cold exit.  From what has been reported by Bloomberg the separation as well as ReCode the announcement from Mayer were both very sudden and cold.  Even though Mayer brought him over from Google to help her turn Yahoo around, it’s clear the she and de Castro didn’t see eye-to-eye on the operation vision and direction taken over the last 18 months.

Yahoo is in bigger trouble than most people thought.  More than I thought…  This is the one good thing about Google, though.  They have a very diverse mission and product portfolio.  Yahoo was all about search.  Back in the mid to late 1990’s they were the “Google” of their day, if you will, leading the search industry with MSN (now Bing), Lycos and Excite falling, literally, far behind them.  Their biggest issues have been, at least in my opinion, timing (they went public in 1996), lack of an appropriate product diversity, and weak management.

Timing has been an issue for Yahoo simply due to events near the time of its birth. They were created in 1994, went online in 1995, and then shortly after that, Internet bubble burst.  Yahoo’s product portfolio was largely in Internet properties, apps, portals, as well as search, and its revenues tanked. Unfortunately, strategies implemented by CEO’s Jerry Yang (1996 – 2009) and Carl Bartz (2009-2011) didn’t do much for the organization, and it has continually floundered. Marissa Mayer has been on board now for about 18 or so months.

Frankly, I think she is running out of time. She needs to get something together quickly – I’m thinking she might have 6-12 months left to produce some results – or she may also be out of a job, and Yahoo’s board may have some tough decisions to make.  Mayer has to get it together, show clear vision and direction, along with a personnel strategy to get the job done. While she did have that in place with de Castro, his failure to execute isn’t helping her; and she may have to go back to the drawing board (or at least she better before the Board does…)

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  • larrymcj

    While Yahoo!’s primary business is Search (ads) I feel that Marissa has failed in two ways. First, in not listening to the hue & cry of her followers (those who use search but arrive there from other parts of Yahoo!, like news). When Marissa recently redesigned the Yahoo! homepage we all know the Yahoo! faithfuls screamed and threatened to go elsewhere for their daily dose of media content, which brings me to the second mistake.

    Yahoo! needs to get into media content in a big way, and unless they land a big name here, they’ll continue a downward spiral, as evidenced by their lame decision to pursue Katie Couric. With Katie’s terrible ratings these days, why would Marissa even consider her? The fact that Yahoo!s CEO is behind this decision points to the immediate need of someone to be hired to avoid these types of mistakes.

    • Christopher Spera

      I think Yahoo!’s primary business used to be search. Its not the engine that it used to be. Nobody yodels “yahoo-ooh-hooo” and longer when they get to the site (I wonder if anyone other than me remembers the yodel contest of 1997…?). Google has too large of a cut of the pie at this point.

      I agree that Marissa could have chosen someone other than Katie Couric to represent the media side of the business. I am still trying to figure that one out. Katie doesn’t know a THING about on line media. Video and print, yes. However, I have seen nothing about her knowledge of online media, be it print, streaming audio or streaming video. Its not like taping a show on TV. Its a bit different. You have the chat room component to work in, and I don’t know how Katie would react to someone in the chat room calling her an ugly name because they disagreed with something she said. it happens with TWiT, Chris Pirillo and other online personalities all the time.

  • Jonathan Maybury

    I am not a big fan of Yahoo, the name alone dose not fill me with confidence, it sounds like a cowboy outfit that dose not take things seriously.

    The few times I have had them because of the provider I was using at the time,

    I have always found the pages to be lacklustre, the only thing I can remember as of being outstanding was a music program called “Last FM” of which they split-up with for some other rubbish that was not a patch on Last FM.

    From then on I thought that yahoo was a dead loss, and not worth my time.

    If they were to go bust, I don’t think the world would miss them to be honest.

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