Jemal Countess, Getty Images for Time Inc.
Marissa Mayer speaks onstage at the FORTUNE Most Powerful Women Dinner New York City at Hudson Room at the Time Warner Center on May 24, 2011 in New York City.
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SAN FRANCISCO — Longtime Google executive Marissa Mayer— one of Silicon Valley's best-known personalities — starts work today as Yahoo CEO, becoming one of the most prominent female leaders in business.
The struggling Internet giant announced Monday that it is turning to Mayer, 37 — its fifth CEO in five years — to spearhead a massive turnaround effort that has gained little traction the past few years.
Mayer succeeds interim CEO Ross Levinsohn, who took over for the ousted Scott Thompson, who was shown the door on Mother's Day following résumé inaccuracies. Thompson took over for Carol Bartz earlier this year, after she was shown the door.
At Google, Mayer earned kudos for her management of several key technologies and a reputation as a demanding perfectionist. She molded the look and feel of some of the company's best known, and used, products — services such as Google's search, Gmail and Google News.
The appointment of Mayer, employee No. 20 at Google and one of its few public faces, could perk up spirits among Yahoo employees and investors. Industry analysts such as Jonathan Yarmis called it a PR master stroke for Yahoo, which has struggled mightily to attract, and keep, top-flight talent in its competitive battle with Google and Facebook.
"I'm surprised and impressed," says Yarmis, an analyst at HfS Research who thinks Mayer's hiring could aid in recruiting efforts. "Yahoo has been able to attract someone of the highest caliber here, someone who understands the business. This is really the first thing out of Yahoo in a decade that you can't snicker at. She's the kind of person you didn't think Yahoo could get."
Wall Street applauded the news, lifting Yahoo shares 2% to $15.98 in after-hours trading.
"I am honored and delighted to lead Yahoo, one of the Internet's premier destinations for more than 700 million users," Mayer said in a statement.
Mayer, Google's first female engineer, joins a short list of female tech CEOs at large public companies. The elite club includes Hewlett-Packard CEO Meg Whitman and IBM CEO Virginia Rometty. Sheryl Sandberg, Facebook's chief operating officer, essentially runs day-to-day operations.
"I am personally very excited to see another woman become CEO of a technologycompany," Google Executive Chairman Eric Schmidt said in a statement.
During her 13 years at Google, Mayer was responsible for shaping Google's most popular products — ranging from its search homepage to Gmail and Google Images. Recently, she oversaw the company's location and local services, including Google Maps, encompassing more than 1,000 product managers.
Mayer also sat on Google's operating committee that advised Google co-founders Larry Page and Sergey Brin.
Google CEO Page, in a statement, called Mayer "a tireless champion of our users."
As an early Google employee, Mayer was also something of a celebrity in Silicon Valley. She often spoke at high-profile tech conferences, posed in fashion spreads, including Vogue, was frequently reported in local high-society columns and lived in a posh penthouse in San Francisco's Four Seasons. She's also a connoisseur of cupcakes.
Still, the move to Yahoo is an opportunity for Mayer to claim a bigger stage.
"This is a Hail Mary pass," says Peter Shankman, an independent marketing strategist based in NYC. "If this one doesn't do it, the clock has pretty much ticked out."
A ticklish to-do list
Questions remain whether Mayer can make a difference at Yahoo. Some openly wonder if Mayer's appointment will make a dent. And whether Yahoo might besmirch her stellar reputation if things don't work out.
"She's not at Google anymore, and if she's going to try and out-Google Google, that would be a terrible mistake," analyst Yarmis says. "Clearly, she saw that her path to the top at Google wasn't going well, and revenge can be a powerful, and dangerous, motive."
Mayer's appointment brings a person with cachet and connections to Yahoo, analysts say. But Yahoo has defined itself as a media company working to attract advertising dollars, an agenda echoed by former interim CEO Levinsohn. Mayer's Google tenure and engineering background could signal an about-face for Yahoo.
"She's an engineering type, which in some ways is good news. Ross Levinsohn had said they would focus as a media company, and that was not necessarily good news," says IDC analyst Karsten Weide.
Yahoo's advertising sales business needs to change to shore up its shortcomings, he says. "The future of display advertising will be sold automatically, algorithmically."
The situation isn't entirely dire. The portal attracts about 700 million visitors a month, which helped it generate nearly $1 billion in ad sales last quarter.
But that business is under siege from Google, Facebook and an armada of start-ups vying for eyeballs and revenue. Yahoo's slice of the nearly $40 billion U.S. online ad market — 16% in 2009 — was 9.5% in 2011 and could slide to 7.4% this year, according to eMarketer.
Whether the new CEO and a new board are the fix remains an open question. Analysts will be closely watching Third Point CEO Daniel Loeb, whose hedge fund owns 5.8% of Yahoo and has won three board seats. A hedge fund's influence "runs the risk of making decisions that are good for the short term but not for the long term," Morningstar analyst Rick Summer says.
The January hiring of Thompson, the highly successful CEO of eBay's PayPal unit, was Yahoo's latest stab at a turnaround.
Thompson's hasty exit in May complicated a restructuring plan he put into place that included 2,000 layoffs. It was the latest in a series of missteps the past few years highlighted by multiple CEOs, executive defections, a patent dispute with Facebook, reorganizations and questions about deals with tech partners Microsoft and Alibaba.
For Mayer, it all adds up to inheriting a wayward ship with an uncertain future.
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