Commentary
10/27/2015
10:36 AM
Larry Loeb
Larry Loeb
Commentary

Yahoo Exec Exodus Signals Uncertain Future

A steady stream of executives exiting Yahoo in recent months shows a lack of confidence that CEO Marissa Mayer can turn things around.



10 Google Milestones: From Stanford Dorm To Alphabet
10 Google Milestones: From Stanford Dorm To Alphabet
(Click image for larger view and slideshow.)

Yahoo CEO Marissa Mayer's "turnaround" strategy for the Sunnyvale, Calif.-based company may be hitting some big snags. High-level executives appear to be leaving in droves.  

Recent notable departures include chief development officer Jacqueline Reses, who left for Jack Dorsey's reinvigorated Square, and senior VP of marketing partnerships and platforms Lisa Licht.

Additionally, chief accounting officer Aman Kothari and chief marketing officer Kathy Savitt left the company in September. Savitt played an "active role" in the company's media business, apart from the CMO responsibilities, according to Yahoo. Senior VP of advertising and data platforms Scott Burke left in August, according to reports. He was with the company for 10 years.

And the list goes on.

As with many Silicon Valley companies, Yahoo has a long history of executive departures over the company's lifetime. But this latest round appears to be a pattern that shows a stunning lack of confidence by top level executives in Mayer's ability to pull off her grand goals for Yahoo.

When asked for a comment on the recent trend of executive departures, a Yahoo spokesperson told InformationWeek that the company will not "comment on rumors or speculation."

A possible reason for the long list of execs jumping ship is Yahoo's decision not to partner with Microsoft (a big company investor) and instead combine its search engine with Google, Mayer's previous employer.

(Image: Alija/iStockphoto)

(Image: Alija/iStockphoto)

Mayer announced the Google deal on Oct. 20 as part of Yahoo's third-quarter earnings report, which missed Wall Street's estimates. Yahoo's stock dropped 1.6% following the announcement.

The deal with Google was not unexpected because Yahoo and Microsoft renegotiated their search engine agreement in April to allow Yahoo to try out other ad providers. 

Microsoft attempted to buy Yahoo in February 2008 for $31 a share, valuing the company at $45 billion. Could be that some employees may have thought that Microsoft would try again, considering how Bing and Yahoo search were cutting deals before the Google partnership solidified. If Microsoft did buy Yahoo, it would have lifted the share price -- something stock-vested employees would be happy about. However, with Microsoft now out of the picture, that scenario will not come to pass.

[ Read Yahoo Malvertising Attack Points To More Flash Problems. ]

Shares of the company are down since the beginning of the year. Other challenges for Yahoo include the IRS's decision that Yahoo's stake in Alibaba Group of China is going to be taxable when it is spun off, and the fact that Tumblr, the $1.1 billion blogging platform that Yahoo bought in 2013, doesn't look like it's going to generate the revenue Mayer wants to see.

Brian Wieser, a senior analyst at Pivotal Research Group, talked to the San Jose Mercury News about the departures and their significance for the company. "The fact that Yahoo hasn't figured out the right approach to turn the business around or produce a satisfactory strategy, frankly, would cause some people to look for greener pastures," he said.

He went on to say, "I think there were a lot of people who were attracted to the company by Marissa Mayer's presence, but it's safe to say that very little has gone right for the company."

Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek. He has written a book on the Secure Electronic Transaction Internet ... View Full Bio
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