http://www.bloomberg.com/news/articles/2016-02-02/yahoo-hold...
As I noted before, she was never at the senior VP level at Google (i.e. reporting to the CEO). So she just didn't have enough experience at that level.
It seems like she got the CEO job based on name recognition, and not a track record of leadership and business acumen.
It's interesting to consider the outrage about CEO pay in light of this. Sure, there are plenty of shitty CEOs who don't deserve their compensation. But you have to respect the fact that, at this level, if you aren't sharp, you'll be fleeced by your peers (i.e. De Castro, and whoever negotiated the Mozilla deal). You don't want to work for a CEO who is getting the short end of the stick all the time.
In addition to Steve Jobs' talents as a product person, he also never got the short end of any deal. (I'm saying that as a person who has never really used Apple products.) I was astounded that he basically did a reverse takeover of TWO COMPANIES -- Apple when he returned, and Disney via Pixar. He negotiated with all the thugs in the movie and music businesses. There aren't many tech CEOs who can do that.
I forget where, but I recall some anecdotes about being on the other side of the table with Bob Iger... saying that those guys basically threatened to physically harm you, and that their threats were actually credible!!! Like you should be scared for your life when messing with those guys :)
I always assumed there were some shark lawyers behind these deals, does the CEO really ignore advice and go it alone? In Mayer's case it really does seem so, but a non-sharp CEO should still be able to not be eaten alive if they bring good counsel to the table (though I guess that itself is the sign of being sharp!).
The leadership / negotiation prowess includes the ability to pick, hire, delegate and trust good people.
It is not a coincidence that she was neither able to negotiate a good deal but also failed to negotiate hiring competent advisors. There is a large overlap there.
Perhaps behind De Castro is a competent group of lawyers or advisors as well.
Though she did negotiate herself one hell of a contract. When it personally counts she finds competent people to negotiate!
It's exactly the same reason that programmers need to be interviewed by programmers, and programmers prefer to work for managers that were programmers. You really do have to understand something about someone's job if you will manage them (and potentially fire them).
People with specialized knowledge will do all sorts of things to mislead you about their job performance -- doesn't matter if it's an engineer, lawyer, or finance person.
I think she understood the consequences but thought that the risk was worth the reward. In some cases I think personal hubris was involved.
I don't do Billion dollar deals but I've done my share of 7 figure ones. At some point in every negotiation you need to tell your attorney that you understand the risks and you're willing to accept those risks or nothing would ever get signed. I think Marissa was convinced the Mozilla deal would be huge for Yahoo. She likely didn't think or care if the company got sold (honestly in that case she's probably out so there's no personal risk for her) and she was convinced DeCastro would be able to do at Yahoo what he was able to do at Google.
So she understood the consequences, but just had no clue as to their likelihood or didn't care because she would be set financially? It's horrible either way, she should not be negotiating deals at all.
they're in a bidding war for mozilla with Google and Bing. Yahoo needs their traffic and is willing to exceed the price of the other buyers.. but it's well known that Yahoo has been struggling for years. So a cautious Mozilla would not take their offer unless it was substantially higher, or had some kind of protection if yahoo fails. Yahoo offers this clause, since Mozilla wouldn't do the deal otherwise.
Remember Mozilla wasn't desperate. They could have accepted another offer for at least $300m/year. Yahoo would have been seen as higher risk... people talk every few months about yahoo like it's a miracle they still exist.
Now, I don't know what happened. but yahoo agreeing to this does not necessarily mean Marissa is incompetent or didn't care or whatever.
Likelihood is probability based on factors, each of which has different weight and is again based on other factors. In hindsight, the likelihood seems obvious; when she was making the decision, not so much.
It worked for them in the short term. The traffic enabled them to raise more money and eventually IPO.
Mayer probably thought a similar shoot-the-moon risk was necessary for Yahoo.
Amen to that!
but giving someone a $58m bonus (severence... lol) for a year of work is not a consequence of 'sharp' vs. 'not sharp', it's a consequence of simply not giving a shit about the money because half (or more) of your motivation is probably pilfering the company coffers for you and your cronies to begin with.
none of the yahoo story seems like incompetence to me. it seems like a straight up robbery. everyone calling her incompetent, or dumb, or whatever, has got 'naive' stamped across their forehead.
1) develop a reputation for being a good negotiator, because that will help in future negotiations
2) actually build the company rather than raid it, because that will lead to better jobs down the road / better reputation.
I mean, she's not a finance type. Those guys do just raid and rob. Someone who wants to raid companies doesn't join a 10 person startup out of college, toiling away to acquire users.
haha. dude. she's in her 40s and worth $500M (and growing) now. she is obviously pilfering yahoo and enriching herself and her friends. things change. people change. sometimes for the worse.
ironically, the corporate raider types are the ones who are currently trying to stop her, because she is killing the golden goose that has lined their pockets for decades.
to be quite honest i wouldn't be surprised if her loyalties still lay with the google cabal. you know what one great way to get rid of a major competitor is? become ceo and sack the joint. genius!
I believe that is now known as "Elop-ing."
It is not like she'll need to quickly look for a job and will be ruined if nobody hires her afterwards. She could retire any second and do nothing for the rest of her life, which she might as well do.
Quite opposite, in fact. The only way for her to get to the billionaire club would be if Yahoo was a wildly successfully turnaround. She clearly wanted to be Big Boss pretty bad, though.
uh, does it matter? that's how it ended up.
Basically, she negotiated every deal, acquisition, etc. as if the absolute best case was a certainty, because that was the limit of her experience. Now she knows that cargo-culting free food and fancy parties does not a successful business make.
Sometimes the situation calls for rolling the dice and hoping for the best. Before we call her business acumen in to question, we should know the incentives set forth to her by the board, and what agenda they may have set for her. Incentive wise, stock options often push executives towards riskier plans of action.
And agenda wise, it may be that she's been brought in to sell to a competitor like Google. Outbidding Google for the FF contract seems like a reasonable plan to buy more things Google is interested in. Recruiting executives from Google to help negotiate a buyout might also be a good plan if they bring enough information with them.
When you live in such places you become used to the ebb and flow of negotiating, the give and take.
If the only time you negotiate anything, it's worth millions, you might not be well practiced.
What are the lessons of haggling, then?
Dont know how effectivr that would be in an 8 figure deal, but I reckon the lessons are somewhat applicable
wow. if true, that's the strongest evidence i've ever heard in favor of jobs' negotiating skills.
have you got a source for that? not that i don't believe it, i'd just like to read more about it, in context.
https://www.amazon.com/Steve-Jobs-1955-2011-Bloomberg-Busine...
Would you be as good at negotiating if you're dealing with Leonardo DiCaprio? Or would the 'halo effect' be too overwhelming?
Or Google's other traffic buying programs.
Last acts of a dying company?
Google is light years ahead of Yahoo in PR.
I don't know a ton on how to take a company private, especially after she's in a position she's in now but...if I were her, I'd leverage everything I had and take Yahoo private. Just like Dell did and turn the company around without all the public pressure.
PS: I know it seems crazy but CXX jobs other than CEO can really make ~85million per year. Often because they could be the CEO of another company.
> PS: I know it seems crazy but CXX jobs other than CEO can really make ~85million per year. Often because they could be the CEO of another company.
$85m a year would be top 5 CEO and that top 5 typically changes based on who got a big grant that year. It's certainly not typical compensation. In fact he was the highest paid COO in the country.