Analysis

Yahoo CEO Marissa Mayer's turnaround plan: 3 takeaways

The new head honcho unveils her strategy for rejuvenating the struggling company, but many investors and commentators say Yahoo is hopelessly muddled

This week, new Yahoo CEO Marissa Mayer unveiled her turnaround plan for the beleaguered company in a highly anticipated speech at Yahoo headquarters in Sunnyvale, Calif. Yahoo hired Mayer two months ago, hoping that the former Google executive could bring the Google touch to Yahoo, which has been losing an increasingly heated battle for advertising dollars. Mayer promised "an act of radical transparency" in presenting her plan, but the speech was closed off to the press. More worryingly for Yahoo, media reports (based on interviews with attendees) indicate that the strategy itself was frustratingly opaque. Here, 3 takeaways from Mayer's comeback pan:

1. Mayer tried to define what Yahoo is
Yahoo's biggest problem is that it lacks a core identity. After shedding its primary function as a search engine, the company "proceeded to miss the boat on every big internet trend since," and its "home page remains cluttered and sorely lacking a brand of its own," says Nicole Perlroth at The New York Times. So "first and perhaps most importantly, Mayer tried to answer that age-old question of what Yahoo" is, says Kara Swisher at AllThingsD. The answer: "Yahoo is a company that excels at personalization in its various arenas, from email to content to advertising." In non-tech speak, that implies that Yahoo users will keep coming to the site because it's customized to offer what they want to see, read, and buy.

2. Mayer laid down a slew of goals
In addition to focusing on "personalization," Mayer pledged to boost Yahoo's profile on mobile phones, which are increasingly becoming the go-to platform for internet use. Mayer said she wants Yahoo to become "a part of users' everyday routines," says Swisher. She also said Yahoo would do more "aqui-hires, where it buys small companies not for their products, but for their engineering talent," says Nicholas Carlson at Business Insider. Possibly to that end, Mayer announced that chief financial officer Tim Morse would be replaced by Silicon Valley veteran Ken Goldman. Morse had been brought on to cut costs (i.e. fire people), and a shift in personnel may mean the new Yahoo is looking to invest.

3. Mayer didn't offer enough specifics
Mayer "spoke in such vague platitudes that she might as well have been running for political office," says Jonathan Berr at InvestorPlace. Personalization and integrating Yahoo into users' everyday routines are noble goals, but "exactly how these wondrous events will occur remains unclear." Yahoo still "remains the proverbial work in progress," says Charles Cooper at CNet. At some point Mayer is "going to have to get a lot more specific about where — and how — Yahoo gets to there."

Sources: AllThingsD, Business Insider, CNetInvestorPlaceNew York Times

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