Changing the Culture at Yahoo!: Marissa Mayer's Challenge

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In May 2012, Yahoo fired its CEO Scott Thomson (Scott) just four months after his appointment. Scott was dismissed by Yahoo's board after it was found that he had falsified his résumé by including a computer science degree which he did not have. Scott’s sudden ouster led to chaos in Yahoo which had been facing a string of crises. Yahoo appointed its head for global media business, Ross Levinsohn, as interim CEO till it found a new CEO. Later, in July 2012, Yahoo's board appointed Marissa as its new CEO upon on the recommendation of the CEO search committee appointed by it. Marissa was the fifth CEO of Yahoo to head the organization in five years...

Despite all the troubles that were plaguing Yahoo in 2012, it was one of the major portals on the internet with 700 million visitors and many people still used its services like email and search. But Yahoo was unable to come up with appealing new products for its consumers in areas like social networking and was lagging in other key growth areas like mobile internet. It was steadily ceding advertising market share to its competitors like Google and Facebook and was unable to increase its revenue...

As soon as Marissa took over as the CEO of Yahoo she set about the task of reviving the company's fortunes. One of the key challenges before her was to change the culture at Yahoo to make the company competitive again. She replaced some senior executives with new people whom she perceived to be more growth oriented. Marissa believed that a new and strong top management team at Yahoo would help in bringing in fresh perspectives and help in changing Yahoo’s bureaucratic culture. She appointed Ken Goldman as the new CFO of Yahoo and Kathy Savitt as the new CMO (Chief Marketing Officer)...

The key task assigned to Marissa was to make Yahoo competitive again and to get it to effectively compete against companies like Google and Microsoft. And one of the main hindrances to innovation at Yahoo that analysts often cited was the notorious bureaucratic culture which grew rooted at Yahoo over the years. Many talented senior engineers at Yahoo had also left the company as it had not introduced any major innovation for many years. Yahoo's existing customers too were visiting the site just to use its older services like email and search which they had been using for a long time...

Apart from the PB&J initiative, Marissa also planned to implement several other initiatives to change the culture of the organization. She used a shared email list called "dev random" to establishing connections with Yahoo's programmers by engaging in regular email discussions with software engineers who did not report to her. Similar to Google's "TGIF" meetings , she also instituted "FYI" meetings every Friday at Yahoo headquarters where employees could ask her questions, announcements of new hires were made, etc...

Marissa initiated other efforts to revive Yahoo's fortunes. She decided to go back to the basics and start focusing on the company's core products like search, mail, ads, etc. as well as focus more aggressively on mobile internet in the future. Some analysts opined that it would not be difficult to change the culture if there was good commitment from the top executives of the organization. As Yahoo could still attract top notch talent like the executives Marissa started to hire since she took over, they believed that these new executives could bring new perspectives to the organization as they were untouched by the prevalent culture at Yahoo...

Exhibit I: Movement of Yahoo's Share Price from January 2006 to January 2013
Exhibit II: Key Financials of Yahoo from 2007 to 2011 (In US$ Thousands)
Exhibit III: CEOs of Yahoo
Exhibit IV: Important Internet Services Offered by Yahoo
Exhibit V: Memo Announcing PB&J

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