Marissa Mayer has been on a shopping spree, but is there any sign of a strategy? | Hacker News Reader

Marissa Mayer has been on a shopping spree, but is there any sign of a strategy?

gigaom.com

36 pointsalexlitov31 comments

I think the strategy is to get as many new decent developers outside the yahoo echo chambers, in an effort to change the working culture inside the company.

For many years Yahoo suffered from mismanagement of CEO with short term goal to appease shareholders as opposed to building a company based on strong workforce and values. Despite all the PR speech by the previous CEO, I never felt that the previous leadership really knew what the hell they were doing.

One of the first thing Mayer had to do was stop the culture rot within the company, and you will see that a lot of her decisions, whether its buying up other companies and making new rules around favorable working conditions, is targeted on building a strong group of core developers. This obviously takes a lot of time, there is no magic bullet to fix culture rot.

Mayer is from Google school of thought, so she knows a thing or two on how good working environment works. You will see that while Google has a strong leadership to guide the company, a lot of its products and services started from and driven by not the leadership, but their developers on their 20% project.

So to put it in short, Yahoo is not in a position like Google where they can dictate long term strategy without getting its bases in order and fix decades of rotting.

I think in the next 12 months or so will be interesting time to see what comes out of Yahoo.

Culture is set by the execs, and their senior managers, not the developers. Buying up new companies won't change the culture unless they are integrated into a new management structure. Sure, a good junior or mid-level manager can maintain a strong culture in their team/organization. BUT only with senior exec support - otherwise they will fall under corporate oversight for everything - from facilities policies (free snacks, beer, soft drinks, breakfasts? huge desks? breakout rooms?), HR processes (hiring, performance, salary increases, role changes), IT processes (hardware/software freedom), etc. There are talented managers who can present a view of full cooperation, but still do their own things - though again, to pull that off, they usually have some senior exec support. The more contact with the rest of the org. the more its culture seeps in.

Just think about it in terms of code - you write some code as a standalone demo - to bring it into your main application, you end up having to integrate into most of the existing framework, and that influences the original demo code - often for the better, but that depends on the quality of the existing code base - and how well it was architected (by the code equivalent of the execs).

Very few companies do acquisitions where they carefully protect the acquired company. The assumption is that the buying companies culture is better! One company that does do this quite well is Conde Naste. (Wired, Reddit, etc. all have quite separate identities, and from the outside appear to have autonomy.)

When you start to see an exodus of long term Yahoo! execs, then she's probably doing something right. Whether Wall Street would reward her for that, is a totally different question!!!

Mayer brought in couple of high level Google execs/managers in the last 12 months for exactly what you are talking about;

Here are three I can remember (there might be others I don't know):

Andrew Schulte as chief of Staff: http://hothardware.com/News/Yahoo-Chief-Marissa-Mayer-Poache...

Dylan Casey senior director in the platform organization: http://searchengineland.com/former-google-product-manager-go...

de Castro as chief operating officer: http://online.wsj.com/article/SB1000087239639044435400457805...

Also I replied else where how the Yahoo working environment changed since Mayer joined:

http://www.quora.com/Yahoo/Is-it-true-that-Yahoo-is-better-t...

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At the end of day we will just have to wait and see how Mayer's strategy pans out. At least from what I can see she is taking things to the right direction.

This.

Culture is pushed from the top. If you're changing the culture at the top then bringing new people in lower down might speed up the change and solidify it but in of itself it won't change anything if nothing is changing at the top.

Right, but if you bring them in without changing the top, they either get changed to the existing culture are and somewhat unhappy. Dislike the new culture and leave. Or kick up a fuss, and get asked to leave.

But if they see execs who really get it, they may endure a line or middle manager who doesn't get it, knowing that it's just a matter of time.

I think the strategy is to get as many new decent developers outside the yahoo echo chambers, in an effort to change the working culture inside the company.

Unless I'm wrong, qwiki had 9 employees. To pay ~$5M/developer seems incredibly expensive. Yahoo could simply offer $500,000/yr and I'd reckon they'd attract talent at same caliber or better than qwiki. In that sense, this seems like a disastrous acquisition if purely for talent.

I am not going to pretent to know how hiring process on big companies like yahoo/google works but here are some of the reasons I think for a company in Yahoo's position acqui-hire is the best way to go:

- In general, top developer are more likely to work for more interesting companies with interesting problems to solve with good pay to boot. I think most good developer would rather work for Google or their own company than work for Yahoo. Since mooching top developers from Google is out of the question, acqui-hiring seems to be the next best option.

- You can't play with 500k/yr strategy because they are other top companies with deeper pocket and can throw more money at employees than yahoo, also because it creates a bad precedent, where current employees who might be more talented but getting 1/5th of the pay. It also artificially increases values of developers IMO.

- Getting acqui-hired employees from small companies/start-ups means hiring people who used to working under pressure and delivering/shipping. This might not always be the case for Yahoo current group of people. People from outside the eco-chamber might help them change the working culture.

- They had to pay that amount, doesn't mean thats how much they value they employees, it also means thats how much they had to pay the investors in order to get employees to work for them.

- You can't play with 500k/yr strategy because they are other top companies with deeper pocket and can throw more money at employees than yahoo

Those same top companies can throw more money at start ups as well. They don't because they don't think they are worth that much or much at all.

also because it creates a bad precent, where current employees who might be more talented but getting 1/5th of the pay. It also artificially increases values of developers IMO.

Nothing creates worse precedence than being a yahoo employee of few years and finding out the new guy in the next cubicle became a millionaire because he came via a start up that didn't go anywhere. THAT's demoralizing as it gets and tells existing yahoo employees that if you want to make millions, you should leave yahoo because that's what the guy next door did.

I think you are very misinformed.

- because Google and other big companies do pay crazy amount for acqui-hires, more often and more consistently than yahoo does: http://www.siliconbeat.com/2013/03/28/silicon-valleys-bigges... The reason Yahoo is more talked about because of Mayer and she is trying to pick up a sinking ship. A valiant u-turn of a dying silicon giant by an ex-googler story is more interesting than Google/MS/Facebook/Twitter acquiring to keep their strong position.

- Being successful in startup takes a special kind of talent (with lotsa luck), if every joe/moe could do it, they would. Nothing is stopping any yahoo developer to leave their safe job and take on this challenge, but chances are they won't and most people don't.

1. You've proven my own point true: that even after competition from others, yahoo can still continue buying companies. Similarly, I'd argue yahoo can hire great employees for lots of money(but less than aqui hire) even if google etc decide to compete with them in matching salaries.

2. Start ups are hard. But when so many joe schmoe start ups that have created so little value get acquired for 50M, all of a sudden it lowers the barrier for start up success and makes more people want to do it.

> You can't play with 500k/yr strategy because they are other top companies with deeper pocket and can throw more money at employees than yahoo, also because it creates a bad precent, where current employees who might be more talented but getting 1/5th of the pay. It also artificially increases values of developers IMO.

Silicon Valley has this weird thing where it thinks the labor market shouldn't behave like a market.

They're not going to change the working culture by hiring "smart" people - that was one of the problems in the first place...

(That and the byzantinely fractal multi-layered management structure.)

I agree with you that only hiring smart people is not going to fix any problem. But thats not the only thing thats happening. After reading dozens of Quora discussions on Yahoo over the last few months, I am getting the impressions from current employees (and former employees who are in touch base with their former colleges) is that there are also very big changes on how these smart people are being managed. I remember reading about:

- "All hands on deck weekly meetings."

- More emphasis on what the employees want and need to perform better and taking care of those solutions.

- Open door policy, if anyone needs to talk to higher ups.

We don't know other details, but I am guessing these are positive changes.

Nice... references would be much, much appreciated!

Its a lot of reading, but I would start with this two:

http://www.quora.com/Yahoo/Is-it-true-that-Yahoo-is-better-t...

http://www.quora.com/Yahoo/Why-do-people-still-work-at-Yahoo

You can also check out related questions and their search on yahoo related recent question, lots of activity by current/former yahoo employees, both anonymous and on record.

Does acquiring companies for injecting 'young blood' actually work? I feel an acquisition means the founders and early employees would want to kick back and relax in the comfort of a big company job for a while. The examples I've seen are where they wait out their vesting period, and then quit and start their own company.

The strategy is to appease wall street and shareholders. Doesn't matter what their plan is or what they do, as long as they have a plan and do something.

While somewhat rare for publicly traded companies, Amazon has shown that companies can float while prioritizing long term strategies above everything else.

Mayer realized that Yahoo's position is that of a big old corporation: High assets, weak on true innovation. Using the assets to absorb external innovative power is the logical consequence. As time is running out, they have to go for 10M+ opportunities, instead of trying too many too small projects.

Somehow I find it hard to believe that if it had been Zuckerberg or Larry Page or any other guy, this title would have been chosen.

Steve Jobs:

http://www.fastcompany.com/1563818/feisty-steve-jobs-ponders...

http://seekingalpha.com/instablog/978263-tribbda/197291-the-...

Bill Gates:

http://www.businessweek.com/stories/1997-01-12/bill-gatess-q...

Jeff Bezos:

http://gawker.com/287019/jeff-bezos-restarts-amazons-shoppin...

Larry Page:

http://www.businessinsider.com/the-google-investor-apr-12-20...

There are also plenty where a company is named rather than the CEO, but the CEO at the time is male. For example, HP:

http://dealbook.nytimes.com/2010/09/13/h-p-s-pricey-shopping...

http://techcrunch.com/2010/09/13/hp-continues-shopping-spree...

http://markets.cbsnews.com/cbsnews/news/read/14673193/hp_con...

http://qz.com/29535/autonomy-is-just-the-latest-bad-egg-in-a...

http://www.forbes.com/sites/andygreenberg/2010/09/13/hp-acqu...

There are many more, for many companies.

Two minutes of Googling will find you plenty of writeups of companies with male CEOs on "shopping sprees". Have fun with the "intitle" operator, it's used there too.

People who write these types of comments do more to set back gender equality than anything written about the subjects themselves. If the subject of the story were a guy would the thought of sexism even cross your mind or would you just, ya know, evaluate the story on its merits?

If the subject of the story were a guy would the thought of sexism even cross your mind

No, because it wouldn't make any sense. Now, in this specific case the criticism turns out to be unfounded, but being suspicious of word choice is perfectly reasonable, especially considered that Mayer did face a lot of unfounded criticism that was clearly gender based.

Even more so when the "lack of strategy" here smells like a ton of FUD. Lots of startups getting acqui-hired, for a company that wants to take a risk and seek a fundamental change. Even hiring Mayer herself seems like a part of that strategy.

I was mistaken and there's no way to indicate that in the comment now, but your reply is way out of line and ironically a good example of harmful stereotyping ("people who write these type of comments"). Also, my comment had nothing to do with the story and everything to do with the title.

Sorry that you feel that way, but since you made a comment which called into question the validity of the article and the character of the author without any evidence or apparent research to prove its validity, I think calling into question your assumptions and the potential harm they cause to be perfectly fair.

It's not right for me to generalize, so I should have said "These types of comments..." but my point still stands.

As one who hasn't followed Yahoo for a long long time, how does Yahoo actually make money? Is it purely from advertisement?

I've seen estimates of ~90% of their revenue coming from advertising.

If this were any male CEO doing all these acquisitions, would the author of this article have written about him going on a "shopping spree"? I kind of doubt it.

Edit: Criticism retracted - searching around in Google, it looks like this is a common phrase when referring to companies that make a lot of purchases in a short period. Apologies to the author for implying something negative.

+1 for your auto-critic ;)

The article goes on to mention pocketbooks and stitching.

http://www.cnbc.com/id/100598080 http://m.techcrunch.com/2010/02/17/google-continues-shopping...

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