Since taking the reins at Yahoo, Marissa Mayer has been trying to
convince customers and employees that there is still life in a company
that Silicon Valley long ago left for dead. Yahoo, an Internet pioneer,
missed the boat on social networks and mobile devices as the new
gateways for information and, in recent years, had been losing
advertisers and employees to rivals like Facebook and Google.
to Mayer's turnaround effort is infusing fresh blood and ideas into the
company by buying creative startups and integrating them into the
company. So since she took over last July, she has been on a splashy
shopping spree, spending tens of millions of dollars to acquire six
But in many ways, it has been a tough sell.
part, that's because of the past problems with acquisitions. Yahoo's
neglect of Flickr, a pioneering photo service that was the Instagram of
its time, and Delicious, an early social bookmarking tool that predated
Twitter's rise, are prominent examples of the company's mishandling of
These days, too, Mayer has to compete
against the deep pockets of competitors like Twitter, Google and
Facebook, which are also trying to buy great technologies and hire top
Still, there is evidence that she is making inroads.
entrepreneurs say, she is getting personally involved in acquisitions,
focusing particularly on mobile-minded engineers. She is also trying to
reverse Yahoo's reputation as a company that acquires talent and
innovative technologies and then lets them wither.
Yahoo made headlines when it acquired Summly, a newsreading mobile app
started by a 17-year-old in England, for an undisclosed sum. In October,
it acquired Stamped, a mobile recommendation service.
Stein, who sold Stamped to Yahoo, said he was willing to take a chance
on the company given Mayer's solid track record at Google, where she
helped perfect Web search and was largely credited with the clean
aesthetic of the Google home page.
"After conversations with
Marissa and others, it became very clear that this was a unique moment
in time where we could have a phenomenal impact and affect millions of
people," said Stein, a former Google employee himself, who worked
alongside Mayer on Google's mail products. "There are few opportunities
like that." (The New York Times Co. was a small investor in Stamped.)
said he was now concentrating on building a "major mobile development
center in New York" for Yahoo. He is determined to imbue it with the
ethos of an agile, lean startup, not as an outpost of a large
Stamped's offices are covered in chalkboard paint and
whiteboards, for scribbling down ideas and code, and also feature a
fully stocked kitchen. They are decorated with posters of software
applications the employees admire and aim to compete with. The team has
also installed two large television screens for testing app prototypes
and has built a gaming room with club chairs.
"I feel remarkably
empowered and able to get things done," Stein said. "I'm supported to
the fullest extent by Marissa and the executive team."
other acquisitions include OnTheAir, an online video service; Snip.it, a
clipping service for the Web; Propeld, a maker of location-based apps;
and Jybe, a social recommendation site.
Despite the string of
purchases, some say Mayer's pitch - which could be a part of the biggest
technology turnaround since Steve Jobs' return to Apple in 1996 - seems
as if it's still in rehearsal.
Shortly after Mayer joined the
company last year, one Valley entrepreneur in acquisition talks with
Facebook and Google reluctantly met with Yahoo on the counsel of
advisers, who told him he owed it to investors to hear the company out.
Facebook and Google, the offices were buzzing with activity, the
reception desk checked him in using shiny new tablet computers and the
executives working on the deal were so prepared they "basically knew
what size underwear I wear," said the entrepreneur, who spoke on
condition of anonymity because he is still in talks to sell his company.
Yahoo was completely different. He arrived to an empty parking lot and
deserted offices. He checked in on dusty, clunky desktop computers that
ran outdated Web browsers Worse, company executives made it abundantly
clear that they hadn't even bothered to read his resume.
it depressing," he said. "It was disorganized, they hadn't done basic
due diligence, and offered no clear incentive to go work there."
His conclusion "They would have to be willing to pay me twice what anyone else was willing to pay to work there."
certainly has the cash, having reaped $4.3 billion from the first stage
of its sale of half its stake of Alibaba back to the Chinese Internet
Analysts say Mayer needs to make smart acquisitions to
quickly obtain smart young developers who understand the mobile world to
help Yahoo compete against Facebook and Google, which have stolen its
onetime lead as the biggest seller of display ads.
to be interviewed for this article, but she told analysts last October
that the company was looking for "smaller-scale acquisitions" in the
"size and scale of double-digit millions and low hundreds of millions."
has promised some entrepreneurs that if they join Yahoo, they would
have the option of working from Yahoo's satellite offices in places like
New York, San Francisco and Santa Monica, Calif., instead of the
company's corporate headquarters in Sunnyvale, Calif.
But she will have to do more than offer free snacks and cool gadgets to get Yahoo back on track.
you are a quality startup, Yahoo is still not the place to be," said
Colin Gillis, an Internet analyst at BGC Partners. "It's hardly your
Entrepreneurs say that with Mayer's personal
involvement, those on her team in charge of mergers and acquisitions are
setting up meetings with as many people as possible, particularly the
engineers with mobile expertise who could add muscle and fresh product
ideas to Yahoo's core strengths, which include email, sports and
And she is focusing on proving that Yahoo can be a good place for entrepreneurs.
Yahoo's last big shopping spree - roughly 10 years ago, when it picked
up some of the most promising Web properties of the time, including
Flickr, Delicious and Upcoming.org, a social calendar - many of the
startups languished, deprived of resources and guidance.
got there, I realized we were at capacity and we needed servers," said
Joshua Schachter, the founder of Delicious, who sold his company to
Yahoo in 2005. "It was a process, a big deal to get them. I ended up
sidelined for a year and a half."
It was a similar story with
Flickr. After Yahoo acquired the popular photo-sharing site in 2005, it
faded somewhat while other services like Picasa, acquired by Google in
2004, and Instagram, bought last year by Facebook, quickly gained a
That experience was not lost on other Valley
entrepreneurs. In 2009, Yelp turned down an acquisition offer from
Yahoo, that was 50 percent higher than what Google had bid, simply
because the employees refused to work at Yahoo, according to one person
who was involved in the acquisition talks but was not authorized to
But both Schachter and Caterina Fake, a co-founder
of Flickr, said Yahoo appears to be a much different company than when
they left several years ago. "There was a lot of defeatism and
calcification at the time," Schachter said. "Would that happen now? I
Perhaps to address that question, one of the first
things Mayer did at Yahoo was overhaul Flickr's mobile app, to the
surprise and delight of its fans, who praised the new design.
Fake said that gesture could be interpreted as a sign of good faith that Yahoo has "changed a great deal since we were there."
"They do care about the developers now, which was less true than when we were there," she said.
It remains to be seen whether Mayer's purchases will be enough to right Yahoo's course.
instance, eyebrows rose on news of the company's latest purchase,
Summly. Analysts questioned the uniqueness of the app's technology and
the high price paid to acquire the talent of the company's young
founder, Nick D'Aloisio, who still has a year and a half left of high
"This kid is in London, still in high school, and there
are questions about how good the technology is," Gillis said. "If you're
not buying the technology and you're not buying talent, then what did
you buy? PR? As a public company CEO, that's not what you do."
He added, "But at least she is doing something."
© 2013, The New York Times News Service