On Marissa Mayer's first day in the big chair at Yahoo, she has to figure out which problem to tackle first in order to right a company that has been buffeted by scandal, financial trouble and, possibly worst of all, growing market invisibility.
Marissa Mayer, the new CEO of Yahoo. (Photo: Robert Galbraith / Reuters)
"On Mayer's first day, she should be meeting with her direct staff and addressing the Yahoo troops," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "She needs to get employees excited and provide some timetables for when her new team will execute to any new deliverables, like a new vision and strategy."
Yahoo announced late Monday that 37-year-old Mayer, a top-line executive at Google, was starting as the company's CEO on Tuesday. She is Yahoo's third CEO in less than a year, and industry analysts agree she has a huge job ahead of her.
Mayer herself announced on Twitter on Monday that leading Yahoo won't be her only new job: She is pregnant and is due in October.
"Mayer has a successful track record and reputation for being able to plan and execute to what end users want, which is exactly what Yahoo has lacked for so long," Moorhead said. "But Mayer has no experience as a CEO, and she needs to be aware of potential blind spots. Great product people don't always make great CEOs, and she needs a plan to get a few, quick wins under her belt."
So what should be Mayer's biggest goals in her new job? Analysts agree there are a few specific goals that she needs to achieve.
First: Shore up employee and investor morale.
"Both groups need to have confidence in her and her leadership," said Dan Olds, an analyst at Gabriel Consulting Group. Added Rob Enderle, an analyst at Enderle Group: "People need to believe Yahoo can be saved."
Part of the task of improving morale, both inside and outside of the company, will mean laying out her vision for Yahoo and how it can climb back to the top.
"Mayer needs to first establish an inspiring yet believable vision that clearly articulates what business Yahoo is in and why they will win," Moorhead said. "Then she needs to do a roll call to see who on her executive staff is in and who needs to be shown the door."
Mayer was Google's 20th hire and the company's first female engineer. In her 13 years at Google -- which amounts to most of her career -- she rose to become a top executive who led the company's critical Location and Local Services group.
She also was a public face for Google, giving interviews and speaking to enthusiastic crowds at Google conferences and industry events.
Olds said Mayer's experience makes her the right person to take over Yahoo.
"I think that she's finally the right hire for Yahoo," he added. "She has the right pedigree and experience. Plus, she knows how to work in a large organization. Being Google's 20th employee, she also knows how to foster the corporate culture of an innovative and successful company. Bringing Yahoo back is a tall order, but I think she's the right person for the job."
By any measurement, it will be a big, messy job.
Last September, Yahoo pushed out then-CEO Carol Bartz. In January, the company hired Scott Thompson, president of eBay's PayPal division, as its CEO. Five months later, Thompson was out amid a public scandal surrounding the inaccurate reporting of his academic credentials. For the second time in eight months, the company was not only in an embarrassing spot, but was without a CEO.
If those were the only issues that Mayer had to deal with, she would be facing a big challenge. But Yahoo has had its share of business troubles, as well.
The company started out as an Internet pioneer but slowly slid into insignificance. Yahoo has lost user mindshare over the years, as one upstart after another -- from Google to Facebook and Twitter -- has come along and pushed the company into the background.
Tuesday afternoon, Yahoo reported revenue of $1.2 billion for the second quarter of 2012, essentially flat compared to the same quarter a year ago. Income for the period was $190 million, down $1 million from the same quarter of 2011.
"It's a bit of a train wreck," said Enderle. "But this could be an epic turnaround. Mayer is more qualified to run Google than [Google CEO Larry] Page is. She has better people skills and has the rounding needed by a CEO. You basically have the person who should be running Google running Yahoo. Pretty much anything can happen."
Over the course of the past eight months, there have been various reports saying that either Microsoft or Google was trying to buy Yahoo. Some analysts thought selling would be a great option for the struggling company.
But now with Mayer at the helm, analysts say that option is likely off the table.
"I think bringing her in makes it obvious that selling the company isn't what the board has in mind," Olds said. "And I don't think she would have signed up for the job if it entailed taking Yahoo to the chop shop and selling off the parts. I think the only way they could land her was with a challenge that she couldn't get anywhere else -- a place where she can prove herself, apart from Google and the vast success she's experienced there."
