The rise and fall of Marissa Mayer, from the once-beloved CEO of Yahoo to a $4.48 billion sale to Verizon
AP Photo/Lionel Cironneau
Hopes were high when Marissa Mayer was hired as CEO of Yahoo in 2012. People thought she would turn around the perennially dysfunctional internet giant.Five years years later, and Mayer's time at Yahoo was marred by slowing growth and internal dissent, leading to plummeting employee morale and calls for her resignation. Plus, under her watch, Yahoo experienced historically large security breaches that placed millions of customers at risk.Advertisement
Today, the Mayer era comes to a close, with Verizon's $4.48 billion purchase of Yahoo fully finalized. Now that the deal is officially done, Mayer is officially out as CEO. She will not join the combined Yahoo/AOL entity that will be called "Oath," either.
We went through a bunch of recent news stories and Nicholas Carlson's book - "Marissa Mayer and the Fight to Save Yahoo!" - to put together the story of Mayer's epic rise to become one of the biggest Silicon Valley power players, and her sudden fall from grace.This is an update to a story originally written by Eugene Kim.
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But most importantly, Mayer won't be the CEO of Yahoo anymore. The deal is done, the Mayer era of Yahoo is over, and the Verizon era begins. And so, the rise and fall of Marissa Mayer is complete.
In the final quarter of 2016, Yahoo disclosed two massive security breaches that compromised 500 million and 1 billion user accounts, respectively. For a moment, concerns were floated that these might cause Verizon to pull out from the deal. Ultimately, the deal price was lowered by $350 million, to $4.48 billion.Advertisement
The deal includes Yahoo's core business, which will get merged with Verizon's AOL into a new entity called "Oath." Verizon isn't getting Yahoo's stakes in Alibaba or Yahoo Japan, though. Those are getting placed into a spinoff company called "Altaba."
Early 2016 saw months of rumors and speculation that everybody was looking into buying Yahoo, from Comcast to Disney to AT&T to private-equity firms. Finally, in July 2016, it was announced that Verizon would be buying the company for $4.83 billion.Advertisement
A hedge fund manager, Eric Jackson, sent a 99-page slide explaining why Yahoo needs new management. He suggested dramatically cutting the company's size and jettisoning businesses like search. A few months later, activist investor Starboard sent a letter demanding "significant changes" over Yahoo's management, board, and strategy.
Along the way, Mayer lost key lieutenants, like CMO Kathy Savitt and CDO Jackie Reses (shown here). Some have questioned her acquisition strategy, too, where she spent roughly $3 billion to buy startups like Tumblr and Polyvore, none of which translated to meaningful growth.Advertisement
Investors were spooked in September 2015 when the IRS declined to rule on Yahoo's request for a "pre-ruling" that the Alibaba sale would be tax-free. That doesn't necessarily mean that Yahoo would have to pay taxes, but it added uncertainty, sending Yahoo's stock down 4%.
But revenue in Yahoo's core business has stubbornly refused to pick up, putting Mayer directly in the line of fire.Advertisement
Even so, Mayer is credited for drastically improving some of Yahoo's product designs and traffic to its core apps. Some people say she changed the internal culture at Yahoo and brought back some excitement.
But some of that success was due to Yahoo's partial ownership in Alibaba. Until Alibaba went public in 2014, Mayer was in a safe spot because Yahoo stock was one of the only few ways to invest in the Chinese e-commerce giant. After Alibaba went public, Mayer and the company came up with a plan to sell Yahoo's remaining stake, and hoped to avoid having to pay taxes on the sale.Advertisement
Mayer quickly overhauled Yahoo's existing management, and brought in her own people. During her first year, Yahoo's stock went from $15.74 per share to hovering around $28 in August 2013.
She started at Yahoo in July 2012. Expectations were so high that people put up posters of Mayer designed in the style of US President Barack Obama's famous "Hope" posters.Advertisement
Some insiders had reservations about hiring her because Mayer didn't have a lot of experience managing the finances of a business. She was more of a product person than an operational CEO. Regardless, the board unanimously voted her in as Yahoo's next CEO.
By 2011, Mayer's great run at Google was coming to an end. But another great opportunity came: Yahoo's board wanted her to be its new CEO. Other people discussed were Nikesh Arora, then the chief business officer at Google, and Eddy Cue, Apple's senior vice president of internet software and services.Advertisement
Mayer was eventually moved to the team that managed Google Maps and local products. She was still one of the top executives, but some people took it as a "demotion" because she was no longer in charge of Google's most important product: its search engine.
Frustration continued to grow internally. One of the most powerful Googlers who didn't get along with Mayer was Amit Singhal, the man behind the algorithms that power the search engine. He went directly to Larry Page and asked him to remove Mayer from the search team.Advertisement
But her obsessive attention to detail and data-driven management style created some enemies at Google. A famous designer named Doug Bowman quit over it, saying, "I've grown tired of debating such minuscule design decisions. There are more exciting design problems in this world to tackle."
Mayer boosted her public presence by spending her riches conspicuously. She bought the $5 million penthouse suite at the Four Seasons in San Francisco, and another home closer to Google's Mountain View campus. She's worn dresses by designer Oscar de la Renta.Advertisement
She was great with the press, and the media loved her back, too. There were rumors of Google running a separate PR team just for Mayer. That wasn't true, but Google did have a group of PR people devoted to promoting her career.
Mayer was named VP of search products and user experience in 2005. By then, she was already setting the agenda for the product meetings that involved Larry Page. She was part of a small group of star executives called the "secret cabal," according to Steven Levy, who wrote a book on Google.Advertisement
Mayer also briefly dated Google cofounder Larry Page. The relationship was very discreet, and they didn't show any affection in the office. One person described the relationship as, "Two quiet people dating each other quietly."
Mayer quickly rose through the ranks. She started out as a part-time member of the user interface team, but soon became a product manager. By 2003, she was in charge of Google's consumer products, including its core search.Advertisement
Mayer loved it at Google. During her first two years, she would work 100-hour weeks regularly. She also continued to teach at Stanford for the first few years at Google.
Mayer was planning to take a job at management-consulting firm McKinsey at the time. Plus, when she did her own analysis, Google only had a 2% chance of surviving. But she was fascinated by the people and thought she'd learn more there. She took the Google offer — and worked there for the next 13 years.Advertisement
People say Mayer didn't have a very social life in college. By the time she graduated, Mayer already had 12 job offers lined up. The last offer came from Google, a small startup at the time.
But her life perspective changed when she took an introductory computer-science class called CS105. It led her to major in symbolic systems, a famous major whose alumni include LinkedIn's Reid Hoffman, Apple's Scott Forstall, and Instagram's Mike Krieger.Advertisement
Mayer applied to 10 schools and got accepted to all of them, including Harvard, Yale, and Stanford. She ended up going to Stanford, where she first took premed courses, in hopes of becoming a doctor.
Mayer developed an early talent for math and science, and teachers loved her. Although she was a good presenter, her friends didn't take her as particularly extroverted. In fact, she once described the child version of herself as "painfully shy."Advertisement
Mayer was born in 1975 in a small Wisconsin town called Wausau. Her father was an engineer and her mother was an art teacher.
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