Despite an impressive track record during her 13-year tenure at Google, Marissa Mayer is still an unknown quantity in her leadership role at Yahoo. On Tuesday, investors should get a better sense of how the rookie CEO plans to turn around the Internet giant.
Mayer plans a pair of all-company meetings (two in order to accommodate employees in time zones across the globe) tomorrow to share the strategies she laid out last week for Yahoo’s board of directors “in an act of radical transparency,” according to an internal memo obtained by the tech blog AllThingsD. Mayer will give “guidance as to where the company is going.”
This is insight the investor community wants just as badly, especially because Yahoo didn’t offer third quarter guidance in its last earnings report to give Mayer time to assimilate into her new role. Yahoo didn't immediately respond to a request for comment about whether or not any details of the meeting would be shared with investors, although Mayer's "radical transparency" will almost certainly lead to more leaks.
“The key here is a focus on getting Yahoo back to execution,” said Ron Josey, an analyst at ThinkEquity.
Although Mayer's most recent focus at Google was on location-related products, analysts expect her to concentrate now on Yahoo's core businesses of search and display advertising. "Looking at her background, I think she will kind of elaborate on her product strategy," said Sameet Sinha, an analyst at B. Riley & Co., LLC. "It’s probably the right approach. They have two customers, the consumer and the advertiser, but without the consumer, there’s no advertiser, so she has to make sure the consumer stays," he said.
Brian Wieser, a senior analyst at Pivotal Research Group, said the investment community would be listening for Mayer to lay out some strategies for a couple of key projects. "I think the ones that are most interesting to me really include things like finding ways to consolidate the display business and finding ways to deepen ties with AOL and MSN," he said.
Mayer's long history in the search business almost certainly will make her a better negotiator when it comes to working with Microsoft on the two companies' search partnership, and investments in behavioral analytics technology could help it in the display-ad space. "Display advertising is extremely competitive but it’s growing a lot faster than it was two years back, and Yahoo’s the market leader," Sinha said.
Analysts also want to hear Mayer lay out a framework for a mobile strategy. Making money from users coming to an online destination from their phones is an ongoing challenge for companies like Facebook, but Sinha said Mayer will do better by focusing on the expereince the user has on his or her desktop first.
"If your core website is good, then people will try to find you on their mobile devices also," he said.
There's also the question of what Mayer plans to do with the cash left over after returning $3 billion of the proceeds from selling part of its stake in Chinese ecommerce giant Alibaba Group to shareholders. “I definitely hope to hear more about her strategy about acquisition,” Sinha said.
Any framework of a cohesive strategy going forward will be welcome news for shareholders. “Investors will be interested in seeing what Ms. Mayer can do compared with the successive string of CEOs that have recently come and gone,” Ralph Schackart, an analyst at William Blair & Co. LLC, wrote in a research note shortly after Mayer’s hiring in July.
"For us on Wall Street to get super-excited, I think we need to see better execution and this… would be her first debut," Josey said "It’s something we've been waiting to hear from her since she joined."
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