Yahoo Names Google Exec Marissa Mayer as New CEO

A Surprise Move for a Candidate That Few Saw Coming

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Yahoo ended its CEO search with a bang, appointing prominent Google exec Marissa Mayer in a move that startled observers and upended the status quo in Silicon Valley.

Marissa Mayer
Marissa Mayer

Ms. Mayer, Google's 20th employee, is one of the search giant's most visible and charismatic execs, though her career appears to have stalled over the past year as she was moved from the search business she built to Google's local, maps and location services division.

"I am honored and delighted to lead Yahoo!, one of the internet's premier destinations for more than 700 million users," she said, in a statement.

In appointing Ms. Mayer, 37, the board passed over Ross Levinsohn, former exec VP of the Americas. Mr. Levinsohn had been handling the CEO position on an interim basis since shortly after the board's last pick, former PayPal exec Scott Thompson, resigned over a resume scandal. While Mr. Levinsohn made a strong case for keeping the job permanently, the board seemed to be dragging its feet on the appointment.

At the Yahoo board meeting last week, execs close to Mr. Levinsohn were expecting some sort of validation of his work, but insiders said they got the feeling there was another candidate in the wings, though they weren't sure who it was. Google Chief Business Officer Nikesh Arora was mentioned. Hulu CEO Jason Kilar had been on the board's shortlist, but he removed his name from consideration last week.

Mr. Levinsohn spent the last few days prepping for tomorrow's earnings call, his first. But by the end of last week, the feeling at the top of the company was that the board had a replacement.

By naming Ms. Mayer, Yahoo gets a very prominent exec with a technical background, tipping its hand somewhat on the eternal Yahoo question: Is it a technology or a media company? Mr. Thompson was also a technologist with no media experience. During his first few months on the job, Mr. Levinsohn and his staff worked furiously to bring him up to speed on Yahoo's primary revenue engine, as well as introduce him to the key players.

At Google, Ms. Mayer ran the consumer search experience but was not directly involved in the search ad business. While search is Google's biggest revenue driver, it operates with little contact between marketers, which run their own campaigns through mostly agency-owned technologies.

The brand ad business -- which Yahoo once dominated on the web -- is very hands on and relationship-driven.

"She has no media experience, no CEO experience -- these are all concerns," said Ben Schachter, an analyst with Macquarie Capital. "And her recent work with Google certainly leaves some question marks about what she was actually doing recently and how successful it's been over the last number of years."

But just because Ms. Mayer doesn't have relationships in the media world doesn't mean she's an unknown. "While she comes from a product background, she's known and respected from the Valley to Madison Avenue," said Jeff Lanctot, chief media officer of Razorfish. "My assumption is she will do interesting and innovative things for Yahoo. Marketers are going to want to hear from her, and from Yahoo."

Former Yahoo board member Eric Hippeau called it a "brilliant move ... which should bring back considerable momentum and credibility to the company."

Ms. Mayer, who was Google's first female engineer, becomes one of Silicon Valley's few female CEOs, a list that once included former Yahoo CEO Carol Bartz, as well as Hewlett Packard CEO Meg Whitman and Facebook Chief Operating Officer Sheryl Sandberg, also a Google alum.

Ms. Mayer's move is more akin to the leap Tim Armstrong made from Google to CEO of AOL, where his relationships with big marketers were considered his key selling point. As an exec from the product side of Google, those are relationships Ms. Mayer has yet to build.

"Ross has done a brilliant job of establishing those relationships over the past 18 months," said MediaLink CEO Michael Kassan. "The challenge will be how fast she hits the ground running."

Industry sources said they'd be surprised if Ross Levinsohn stayed on after being passed over for the permanent job. But Rob Norman, CEO of the media agency GroupM, said he thinks the two could make an extremely complementary team. "If the CEO is a great monetizer of audiences, they need someone with them to help create those audiences," he said.

Mr. Lanctot wondered why the board would allow Mr. Levinsohn to be seen as the presumptive choice if they were so intent on pursuing other candidates. "He laid out a vision to customers, struck media deals, and made a key hire in [Chief Revenue Officer] Michael Barrett," he said. "That all pointed to Yahoo as a media company. Now that they've hired a product pro to lead the business, does that change?"

Mr. Levinsohn could not be reached for comment.

Mr. Norman said he doesn't envision the need for Ms. Mayer to take a long-winded agency tour to get a download on what is and isn't working. "I think she'll look at the issue of what are the shortcomings of this product from a yield-management point of view? Is it a tech product issue or a sales and business issue? And I think she will determine relatively quickly that it's a bit of both," he said.

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