Yahoo picks new chief

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Yahoo Inc picked Google Inc's Marissa Mayer to become its new CEO, turning to an engineer with established Silicon Valley credentials to turn around the struggling former Internet powerhouse.

Mayer, 37, edged out front-runner and acting Chief Executive Ross Levinsohn to become Yahoo's third CEO in a year. She hopes to stem losses to Google and Facebook Inc - which her high-profile predecessors failed to do.

Her hiring signaled the Internet company is likely to renew its focus on Web technology and products rather than beefing up online content.

Mayer, Google's 20th employee and first female engineer, has led a number of its businesses, and was credited for envisioning the clean, simple Google search interface still in use today, a major selling point for Web surfers.

Also known for her love of fashion and a regular on the society pages, she joins the extremely thin ranks of female Silicon Valley CEOs and told Reuters that she was immediately interested when Yahoo's board reached out to her in mid-June.

“This is a very competitive and a tough space. I don't think that success is by any means guaranteed,” she said. “My focus is always end-users, great technology and terrific talent.”

Shares of Yahoo, worth less than half their value during its dotcom heyday, gained 2 percent to $15.97 in after-hours trading.

“It's a statement on Yahoo's part to go with a product-centric CEO choice. It's a very big commitment on the board's part to pursue a product-centric strategy,” venture capitalist Marc Andreessen told the Fortune industry conference in Aspen, Colorado.

Tech companies can be turned around, he said, citing as an example Apple Inc, which had teetered on the brink of bankruptcy before Steve Jobs returned to the company he co-founded. “It's a big job that Marissa is stepping into,” Andreessen said.

Mayer will start on Tuesday, when the company is scheduled to report its quarterly financial results, but she will not join the post-release conference call.

Mayer also revealed on Twitter that she is pregnant with her first child, a boy.

She told Fortune magazine that the baby is due on October 7 and she expects her maternity leave will only be a few weeks long.

Last responsible for Google's local and location services, she joins fellow female tech chieftains Meg Whitman of Hewlett Packard Co, Virginia Rometty of International Business Machines Corp and Ursula Burns of Xerox Corp.

“A lot of people did not believe that Yahoo could get someone of the calibre of a Marissa Mayer to become the CEO at this stage,” said S&P Capital IQ equity analyst Scott Kessler.

A YEAR OF TURMOIL

But Mayer's ascension comes as her profile at Google appeared to have diminished in recent months. Shortly after Larry Page took over the helm from Eric Schmidt, she was excluded from a group of top executives reporting directly to the CEO and granted oversight over major strategic decisions.

Google's Executive Chairman Eric Schmidt said Mayer's hiring was a “real win” for Yahoo. He, however, dismissed the notion that Mayer left because she was marginalized at Google.

“I promoted her through the ranks and she is now running this sort of big maps business, which is a lot of money,” Schmidt said on the sidelines of the Fortune conference.

“It's a nice big step for her,” he added. “It's a loss for Google.”

Her appointment caps a tumultuous year at Yahoo. In May, Scott Thompson resigned as CEO after less than 6 months on the job as a controversy flared up over his academic credentials.

Thompson replaced the controversial and occasionally foul-mouthed Carol Bartz, fired in September after failing to revitalise Yahoo.

“She's going to bring in a different perspective. It's pretty clear Yahoo needs a new direction and really a new vision,” said Paul Buchheit, a Google engineer who helped create Gmail and now a partner at startup-incubator Y-Combinator.

Yahoo had been widely expected to go with Levinsohn, who in his few months at the helm tried to push a strategy of forging media partnerships to beef up the company's online content.

Mayer told Reuters Yahoo can excel as both a media and tech company: “There's a very uninteresting debate happening around Yahoo between technology and media and it doesn't really make sense to me. Because you look at most major technology companies, media is a big part of its business.”

She said it was too soon to talk about restructuring, but was “sensitive to the fact that there has been a lot of change recently at Yahoo, so I don't want to make unnecessary changes.”

LEVINSOHN'S FUTURE

Still, given her relative inexperience in media, observers are keen to see whether Mayer keeps an executive team that includes Mickie Rosen and Michael Barrett - two ex-News Corp executives installed by Levinsohn just months ago - and of course, Levinsohn himself.

“The great products at Yahoo are still, in the main, media products,” said John Battelle, founder of Federated Media Publishing.

Sources have said that Levinsohn was committed to building out Yahoo's own video programming and striking more syndication deals in pursuit of ads that command higher prices.

During his months-long tenure, Levinsohn ended a patent dispute with Facebook and signed the social network onto a partnership. Days after his appointment, he ended a fractious episode in Yahoo's history by sealing a deal to sell as much as half of its stake in China's Alibaba, netting some $7.1 billion.

But the board may not have endorsed his media-focused, long-term plan to turn the ship around.

“I just think it was uninspired,” one source said on Monday, referring to Levinsohn's strategy.

A second source close to the situation said Mayer would try to get Levinsohn to stay with the company.

“He's not happy but he's also not shocked given how the process had been dragging out,” another source close to the company told Reuters.

“Whether Ross stays or not depends on the chemistry with Mayer and the commitment the company is willing to make to media. He won't lack for opportunities.”

LEADING WOMAN

Mayer joins Yahoo as something of a celebrity, having already established herself as one of Silicon Valley's leading women. In April, Wal-Mart Stores Inc nominated Mayer to its board of directors. One Google insider described Mayer as being very intense and “intellectually impressive”, though she could sometimes ruffle feathers.

“She does very little on an emotional, gut-level feel and lets the numbers speak for themselves,” said the insider, who worked for years with Mayer. “She can be difficult, and she can be stubborn, particularly when she has the data to support the facts of her argument.”

A self-described “geek” with a Masters in computer science from Stanford, Mayer has frequently championed bringing more women into tech.

But nor has she been shy about discussing her sense of style - and her love for all things Oscar de la Renta.

Mayer is known for hosting parties - from intimate literary salons in her Four Seasons penthouse in San Francisco to Christmas bashes at her home in Silicon Valley near the Googleplex - and is a regular on society pages, especially after her wedding to real estate investor Zachary Bogue in 2009.

In 2010, the couple hosted a $30,000-a-plate fundraiser dinner for President Obama at Mayer's Palo Alto home. And late last year, Mayer became an Internet meme after she was filmed dancing to an MC Hammer beat in a YouTube video made to support San Francisco Mayor Ed Lee's election effort. - Reuters


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