Yahoo COO Dismissed

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

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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