Marissa Mayer’s position as the CEO of the once tech giant Yahoo! Is on shaky ground after her decisions and strategies have failed to regain the strength of Yahoo Inc. after a consecutive drawback in fourth quarter. Yahoo Inc. after turning in another quarter with adisappointing performance warns the investors of a possible fall in revenues. The turnaround plan devised by Marissa Mayer has faltered to such a large extent that even the lucrative holiday advertising period won’t help.
Now in her fourth year as head of Yahoo Mayer’s continued reign as CEO is in doubt as investors have lost faith in her leadership. Though she plans to adopt a new strategy to reset the organization’s focus on fewer but higherquality properties instead of a scattered approach. She discusses the plan to shift more focus and energy into mobile.
Mayer’s tenure at Yahoo! has been hindered by weak demand by advertisers over all. Her strategy to invest in high profile content for the company such as obtaining rights to live stream NFL games, has failed to catch user attention. Also, the development plans of a mobile application suite have also failed this young CEO in her attempt to develop strong strategies for the growth of Yahoo Inc. Yahoo is reported to have expereinced an increase in its operating margins of 7% in the third quarter but that did not create a significant impact because sales declined by 8% which was the largest decline in her four year tenure.
Considering the previous dip in the revenue stream, Yahoo! still has some positive opportunities. It is largely felt that the leadership is to be blamed for the unimpressive performance of Yahoo Inc. In the strongest quarter of the year for advertising companies, seasonally, having numbers falling this steeply is a shocking situation. However, Mayer acknowledges the fact that is having a difficulttime developing and growing Yahoo’s core buisness in advertisment.
The CEO still sees some light at the end of the tunnel by the end of 2016. By narrowing their focus on higher quality properties as a company overall, Yahoo! is expected to rise with somewhat good strength since it is now not planning to cater to such a crammed portfolio. More details and specifications are expected to come from Marissa Mayer in the coming year regarding the company’s plans to switch to a narrowed approach to cater to its core advertising business.
The company’s shares have plummeted by 16% and are reported to have experienced an added after shock of 1.2% to its fragile position. Yahoo! has decided to cut its costs by severing ties with online video content and this is expected to help with Marissa’s strategic plan. The company also failed in its video series which in fact took a considerable portion of its expense budget.
The good news is, Yahoo! is set to re-enter the search business again. With a three year agreement with Google, the world’s leading search engine will provide Yahoo! with search ads for its desktop as well as mobile platforms. Yahoo! can easily select the search queries it has to send to Google without any limitations. Google would be paying Yahoo for the ad displays as a percentage of its gross revenue depending on the positioning of the ads.
With more aspiring leadership, Yahoo! has the potential to become a more successful smaller company. Although the Internal Revenue Service ruled against the tax plan proposed by Yahoo!, it still plans to stick to the divestiture of its Alibaba position.