According to reports on August 2, Beijing time, Mayer has been Yahoo's CEO for a year in July. There was not much surprise in Yahoo's second quarter financial report.
Sitting in the URLs cafe at Yahoo, Mayer said that Yahoo's focus is on the growth of WEB traffic. She refused to disclose numbers, just saying that the increase was enough to offset the decline from the previous year.
Mayer said: "An Internet giant that had declined for three years has now started growing again. This is a good sign."
When Mayer left Google and took over as Yahoo's CEO, she was clear that she might be taking on the toughest job in Silicon Valley.
Mayer: Hopes mobile revenue will eventually become the largest source of income
Yahoo has been "lost" for ten years, with repeated product strategy failures and a revolving door of CEOs. In the era of Jerry Yang and David Filo, Yahoo was equivalent to a WEB dictionary; under Tim Koogle, it became a network portal. Terry Semel then turned Yahoo into a tech company with a bit of Hollywood flair. Recently, when Carol Bartz and Scott Thompson became CEOs, Yahoo was already considered a relic of ".com," with talent being poached by competitors.
Now, Mayer wants to turn Yahoo into a media company for the mobile era. She leads a company of 11,500 people, refocusing on personalized, custom content that makes it easy for users to read on tablets and phones.
Mayer said: "I hope that one day we will see a world where mobile revenue accounts for most of our revenue."
Venture capital firm Khosla Ventures partner Ben Ling believes that Mayer has done two things at Yahoo: "She made Yahoo an attractive place to work for top talent, and she began launching products that attract consumers to use them every day."
Mayer is only 38 years old, making her quite young as a CEO. In fact, she has been a star in Silicon Valley for the past ten years.
Believes Yahoo's wealth is related to devices
Yahoo shareholders are still waiting, hoping to see growth in search revenue and display advertising revenue. In the second quarter, Yahoo's revenue fell by 7% year-on-year.
In Mayer's view, the rise of smartphones brings opportunities to Yahoo. She believes: "What people want on their smartphones is content. The phone is another way to transmit the WEB. I am quite optimistic, and I believe all leaders are optimistic."
Early on, Mayer determined that Yahoo's wealth is related to devices. When she took over, she listed the common things people do on their phones and then consulted family and friends. These things include: making calls, sending text messages, writing emails, maps, weather, news, stocks, sports, games, photo sharing, group messages, celebrity gossip, financial news. Mayer said: "I remember there was financial news and stocks, which were somewhat similar."
Yahoo will not pursue voice recognition, text messaging, or maps. She knows these technologies are costly to develop and have a significant gap compared to pioneer Google; Yahoo pursues products closely related to its popular services.
Mayer found that at Yahoo, only dozens of engineers were developing apps, not because Yahoo was late in mobile innovation, but rather too early.
Building a mobile team
About ten years ago, Yahoo established a mobile team led by former executive Marco Boerries. The team fell into the typical "innovator's dilemma": Yahoo's success was tied to traditional WEB, and the company was unwilling to risk profits for innovation. In 2009, Boerries left to start his own business, and his team disbanded.
After taking office, Mayer's first priority was to rebuild the mobile group, putting Adam Cahan in charge. Cahan is the founder of IntoNow, which Yahoo acquired in 2011 for $20 million. In a recent interview, Cahan said his job was to build the world's largest pure software mobile development team based on Yahoo's commonly used WEB services. It sounds simple, but Cahan insisted it was a big change. He convinced Mayer that Yahoo should focus on users and product development rather than watching the balance sheet.
Cahan's challenge lies in the fact that engineers developing mobile applications are young and scarce. Thus, Mayer and Cahan initiated talent acquisitions, spending $200 million to acquire at least 18 startups and $1.1 billion to acquire Tumblr.
In each acquisition, Yahoo locked down engineers, getting them to sign 2-4 year contracts, giving them full authority to develop programs and hire more mobile developers.
Despite the investment of money, it is not easy for entrepreneurs to accept.
Josh Schwarzapel, a senior product manager who worked for the mobile video chat startup OnTheAir, said: "I was very worried, many of my friends came to Yahoo but were rejected."
Cahan's department is called the "Mobile and Emerging Products Department," with over 330 employees and offices in New York, San Francisco, and Sunnyvale, California. To emphasize the importance of mobile, Mayer ordered the renovation of the team's office in Sunnyvale, giving it a style different from other parts of Yahoo. Employees in the department also receive preferential treatment from the boss. When mobile engineers report on routine products, Mayer encourages them to act faster and think bigger. Mayer also pays attention to individual pixels on the screen, preferring intuition over data. She once said: "We have rulers, but it doesn't mean we need to measure everything with them."
A long and arduous journey ahead
Search is also a key focus. Although Google dominates, Mayer still believes Yahoo can find new ways to present search results despite forming a search alliance with Microsoft over the past three years. She believes: "Search is far from over. It is like physics in the 1600s or biology in the 1800s. It still has a long way to go to reach quantum physics or microscopes. With mobile, you can do many things, and we are very focused on user experience."
Unlike Apple, Google, Facebook, Samsung, and Amazon, Yahoo does not have an operating system or hardware. Unlike Netflix (or HBO, Showetime), Yahoo does not have any blockbuster content worth paying for. Indeed, Yahoo's Weather app is beautifully designed, but users' attention remains scattered, unlike HBO's series "Game of Thrones."
Even if Yahoo's three major mobile apps succeed, they must still find ways to generate revenue. Without doubt, Yahoo is quietly searching for strategies to place ads in mobile services. However, competitors have already taken the lead in the mobile advertising sector. 41% of Facebook's revenue comes from mobile ads. Yahoo has not disclosed the proportion of its mobile ad revenue, but according to Macquarie analysts, Yahoo's mobile ad revenue proportion is less than 10%.
In 2008, Yahoo's revenue was $7.2 billion, and it has since fallen by half. Revenue over the past 12 months was $4.8 billion. Mayer said: "I am not confused. I know we have a lot to do. So far, everything is going well. I am quite optimistic, and many of the advances we have made exceed expectations."