Sunday, December 29, 2013

U.S. Struggles to Keep Pace in Delivering Broadband Service

from nytimes

Valda Kalnina/European Pressphoto Agency

The capital city of Latvia, Riga, has an average Internet speed that is at least two-and-a-half times that of San Antonio.

By EDWARD WYATT

Published: December 29, 2013

WASHINGTON — San Antonio is the seventh-largest city in the United States, a progressive and economically vibrant metropolis of 1.4 million people sprawled across south-central Texas. But the speed of its Internet service is no match for the Latvian capital, Riga, a city of 700,000 on the Baltic Sea.

Riga’s average Internet speed is at least two-and-a-half times that of San Antonio’s, according to Ookla, a research firm that measures broadband speeds around the globe. In other words, downloading a two-hour high-definition movie takes, on average, 35 minutes in San Antonio — and 13 in Riga.

And the cost of Riga’s service is about one-fourth that of San Antonio.

The United States, the country that invented the Internet, is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies.

In terms of Internet speed and cost, “ours seems completely out of whack with what we see in the rest of the world,” said Susan Crawford, a law professor at Yeshiva University in Manhattan, a former Obama administration technology adviser and a leading critic of American broadband.

The Obama administration effectively agrees. “While this country has made tremendous progress investing in and delivering high-speed broadband to an unprecedented number of Americans, significant areas for improvement remain,” said Tom Power, deputy chief technology officer for telecommunications at the White House.

The disagreement comes over how far behind the United States really is in what many people consider as basic a utility as water and electricity — and how much it will affect the nation’s technological competitiveness over the next decade. “There aren’t any countries ahead of us that have a comparable population distribution,” said Richard Bennett, a visiting fellow at the American Enterprise Institute, who said that the United States was closing the gap.

But as the Obama administration warned in a report this year: “To create jobs and grow wages at home, and to compete in the global information economy, the delivery of fast, affordable and reliable broadband service to all corners of the United States must be a national imperative.”

The World Economic Forum ranked the United States 35th out of 148 countries in Internet bandwidth, a measure of available capacity in a country. Other studies rank the United States anywhere from 14th to 31st in average connection speed.

Generally, fast broadband is considered anything above 10 megabits a second.

In Riga, speeds average 42 megabits a second, but many users had service of 100 to 500 megabits as of mid-December, according to Ookla. In San Antonio, broadband speeds average about 16 megabits a second. While higher speeds are available through cable television or phone companies, the expense is such that many households in the city cannot afford a connection.

Those faster speeds can mean the difference between thriving and surviving. For Kosmodroms Ltd., a web design and video production studio in Riga, that high-speed connection lets it transfer huge files of video or photos in minutes.

With broadband of only a few megabits a second, it would take so long to transmit the files that the company would be better off delivering them physically, on a disk or thumb-drive, said Agnese Krievkalne, a company director.

Nils Usakovs, the mayor of Riga, said that when private investors started to build Internet infrastructure in the city, no systems were in place, so the builders were able to install the latest, fastest communications technology. “We’re the capital of a European Union member country, bordering with Russia,” Mr. Usakovs said. “The technology makes this an even more attractive place to invest.”

Leticia Ozuna, a former San Antonio councilwoman who worked on the municipal broadband effort, said that in her former district in South San Antonio, some 70 percent of households had no Internet service. Often, she added, students gather at night in the parking lot of the Mission Branch Public Library to do homework using the library’s free Wi-Fi connection, long after the library itself has closed.

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Saturday, December 7, 2013

Are your smartphone apps selling you out?

from computerworld.com

Just because you're paranoid doesn't mean your mobile apps aren't out to get you

By Mike Elgan December 7, 2013 07:01 AM ET

Computerworld - The president of the United States says he's not "allowed" to own an iPhone, which is why he's sticking with his BlackBerry, according toThe Wall Street Journal.

It's a politically sensitive subject because the iPhone is the big American brand, and the president is a self-proclaimed fan of the late Apple founder and CEO Steve Jobs. He'd love to pander to buy-America voters. (Obama is also probably not "allowed" to have an Android phone.)

Of course, neither the president nor the Secret Service is willing to say exactly how security could be compromised with an iPhone. But one security risk is the unpredictable nature of both iPhone and Android apps.

Sure, there's a lot of flat-out malware flying around online, most of which looks like regular, legitimate apps but in fact are either malware or they compromise privacy or security in some way.

There are certain types of apps that users are wary about and may take precautions about downloading. But others don't seem to have anything to do with user data, so they seem safe.

The Federal Trade Commission announced this week that it reached a settlement with Goldenshores Technologies, which makes a free Android app called "Brightest Flashlight." The FTC said the app harvested data on users' locations and device IDs and sold it to advertisers without telling the users, and even when users rejected the app's terms of service. The settlement forced the company to improve its privacy policy, user communication and data handling.

The FTC said the app had been installed on "tens of millions" of phones.

The whole "Brightest Flashlight" fiasco shines light on an uncomfortable set of facts about smartphone apps. For starters, some apps that have no apparent need to harvest personal data or compromise privacy or security go ahead and do so anyway.

But even those that don't move user data can leave users vulnerable through sheer incompetence.

Silicon Valley computing giant Hewlett-Packard recently conducted a studyabout the security of business apps for the iPhone and concluded that many of them give themselves permission to access phone features and user data that make no sense, given the stated purposes of the apps.

HP found that more than 90% of the business apps it studied had privacy or security flaws.

Many of the flaws involved unencrypted data or insecure protocols. Some 20% of the apps send user data via unprotected HTTP. A similar percentage sent via HTTPS, but didn't do it right. And HP found other problems where an app could compromise user security and privacy not through malice, but through incompetence.

HP isn't the only organization looking at app security and finding a gigantic problem.

Microsoft to slash Dell Windows 8.1 tablet to $99 -- for a day

from cnet.com

Good only on Monday, the price on the Dell Venue 8 Pro is a hefty discount from the usual $299. But there are some catches.

by Lance Whitney

December 6, 2013 5:48 AM PST

Microsoft will sell the Dell Venue 8 Pro for just $99 on Monday. But you'll have to be fast to catch the deal.

(Credit: Sarah Tew/CNET)

Shopping for a Windows 8.1 tablet? You can pick up the Dell Venue 8 Pro for just $99 via Microsoft on Monday, though you'll have to be an early bird to snag one.

Starting Monday, Microsoft's new 12 days of deals promotion promises a sale each day until Christmas week rings in. To kick off the holiday discounts, Microsoft will sell the Dell Venue 8 Pro for just $99, down dramatically from $299 at its retail outlets and online stores.

The catch? The deal is good only for Monday and only until supplies last.

A Microsoft spokeswoman told CNET that the $99 price is good at Microsoft's retail stores only for the first 20 buyers. The price then rises to $199 for the rest of the day until stock is depleted. Some stores may have only 10 units available at $199, though others will have more.

The $99 offer also is good at Microsoft's online store for the first 100 orders. Then the price jumps to $199 for the rest of the day until stock runs out. Once the $199 supply is no more, the price bounces back up to $299.

Most of Microsoft's retail outlets open at 10:00 a.m. on weekdays, so those of you who want the Dell tablet should hit your local store by then. The deal also will be available at 7 a.m. PT atMicrosoft's online store, according to the spokeswoman.

The offer is available only in Microsoft retail and online stores in the US and only in retail stores in Canada. Buyers also have to ante up the necessary taxes and shipping fees. And only one tablet per customer, so you can't buy them for all of the folks on your Christmas list.

Friday, December 6, 2013

Microsoft, Feds Disrupt ZeroAccess Botnet

from pcmag.com

By Chloe Albanesius
December 6, 2013 11:55am EST

Microsoft today announced that it has "successfully disrupted" the ZeroAccess botnet, which has infected nearly 2 million computers all over the world, and cost online advertisers more than $2.7 million each month.

Redmond worked in conjunction with Europol's European Cybercrime Centre (EC3), the FBI, and tech firms like A10 Networks to take action against ZeroAccess, also known as Sirefef.

Microsoft also filed suit in Texas district court that seeks a preliminary injunction directing U.S. Internet Service Providers and other entities in control of the Internet domains and IP Addresses to disable access to the botnet and preserve any content and material associated with it to help with Microsoft's case.

Microsoft noted that the sophisticated nature of ZeroAccess means that it has not been fully eliminated, but "we do expect this legal and technical action will significantly disrupt the botnet's operation by disrupting the cybercriminals' business model and forcing them to rebuild their criminal infrastructure, as well as preventing victims' computers from committing the fraudulent schemes," Richard Domingues Boscovich, assistant general counsel with Microsoft's Digital Crimes Unit, said in a statement.

According to Microsoft, ZeroAccess targets major search engines like Google, Yahoo, and Bing and hijacks search results, redirecting users to dangerous websites that could install malware on their PCs. The scammers could then steal personal information or fraudulently charge businesses for online advertisement clicks. Criminals have also disguised ZeroAccess as legitimate software, tricking people into downloading it.

ZeroAccess is difficult to target because it relies "on a peer-to-peer infrastructure that allows cybercriminals to remotely control the botnet from tens of thousands of different computers." That makes it "one of the most robust and durable botnets in operation today," Microsoft said.

Redmond said it is working with partners to notify people if their PCs are infected. The company also recommended that people visit support.microsoft.com/botnets for information about how to remove the threat.

"Because Microsoft found that the ZeroAccess malware disables security features on infected computers, leaving the computer susceptible to secondary infections, it is critical that victims rid their computers of ZeroAccess by using malware removal or anti-virus software as quickly as possible," Microsoft said.

The ZeroAccess attack is the first botnet action Microsoft has taken since the launch of its new Cybercrime Center last month.

In June, Microsoft also disrupted more than 1,000 botnets used to steal people's banking information and identities. The malware, dubbed Citadel, resulted in losses of more than $500 million and affected more than 5 million people.

Earlier this week, meanwhile, Trustwave's SpiderLabs dug into source code from the Pony botnet, which was recently made public, and made some startling discoveries. The botnet managed to steal credentials for: 1.58 million websites; 320,000 email accounts; 41,000 FTP accounts; 3,000 remote desktops; and 3,000 secure shell accounts.

Thursday, December 5, 2013

Yahoo’s Geek Goddess

from vanityfair

diligent.” Larson added, “What ever she did, she tried to make it perfect.”

She applied to 10 colleges, including Harvard, Yale, and Stanford. After being accepted by all of them, she created a spreadsheet, ranking the schools by criteria such as median S.A.T. scores. It yielded Stanford, where she initially planned to major in biology or chemistry, with the goal of becoming a pediatric neurosurgeon “who taught at a medical school while taking exceptional cases,” as she described it. Upon realizing that she could do that with a degree from a state school, she changed her major to symbolic systems, a Stanford major that combines philosophy, cognitive psychology, linguistics, and computer science.

Employee No. 20

Afavorite Mayer story is about not noticing that she was a female in a mostly male world. At college one day, she was reading The Stanford Daily and laughing to herself about a column on campus celebrities, which included “the blonde woman in the upper division computer sciences classes.” She later told a reporter, “And I was, like, I’m a woman in the upper-division computer-science classes—I should know this person!” She has credited her obliviousness with her success. “Had I been self-conscious about being the only woman it would have stifled me a lot more,” she told the audience at the Y. And Mayer has explicitly rejected the feminist mantle. “I don’t think I have sort of the militant drive and sort of the chip on the shoulder that sometimes comes with that,” she said in a PBS documentary calledMakers. A former Google employee recalls Mayer being asked by an obnoxious radio host, “If I Google ‘Marissa Mayer naked,’ what will I get?” Mayer blew past it.

Continued (page 2 of 6)

Mayer’s comments on feminism in Makers provoked some controversy. But the more interesting question is why and how someone with no awareness of how she is perceived—someone who has often characterized herself as shy—would end up as the very highly publicized face of Google.

Mayer stayed at Stanford to get her master’s in computer science. As graduation approached, she created another spreadsheet, to weigh her 13 or 14 job offers (the number depends on which profile you read), but she inadvertently clicked on an e-mail from a start-up called Google, which was looking for employees. She joined in the spring of 1999 as the 20th employee, when the company was still based in a small office in downtown Palo Alto. Profiles often say that Mayer was Google’s first female engineer, and she was, but several others joined within months of her.

At that time Google was both diverse and intense. “We all had our hands in everything,” says an early employee. “Marissa was doing that as much but not more than anyone else.” As Google started to grow, the media began to descend on the company, but its founders, Larry Page and Sergey Brin, had little interest in press, and Google’s early position was that the company shouldn’t have an individual face—the technology should speak for itself. (Although Mayer and Page eventually dated, most people tell me that the relationship had no impact professionally.)

Mayer is genuinely a geek—one former Google employee says, “That part of her mythology is real,” and offers as proof an L.E.D. installation Mayer built for her home with the lights inside pierced Ping-Pong balls—but, unlike most geeks, she is surprisingly articulate. Reporters who visited Google in its early days and met her were wowed by her knowledge of the technology, her pragmatism, her presence. “She combines the qualities of a programmer and a humanist,” says technology reporter David Kirkpatrick, who says Mayer’s mother credits him with being the first to write about her daughter, in 2005. That same year, she appeared prominently in a 60 Minutes report on the company. You can still see Mayer’s early Google incarnation in a 2006 speech she gave at Stanford, where she discussed her nine theorems of innovation. She talked really fast—she is still known for talking fast—and she wore a plain blue T-shirt and black pants. Her hair was not yet the perfect blond sweep it would become. She had a nervous tic, an nnnhh sound she made when she paused, that made her seem almost a parody of a stereotypical nerd. There was also her laugh, which is so famously idiosyncratic that there is a YouTube compilation of it.

In light of later events, her most interesting theorem is that long-surviving brands (such as Macs and Madonna) haven’t been perfect all the time, but in the face of mistakes like the Newton or the sex book, “you just iterate your way out of it, or you re-invent yourself.”

A former Google employee says that Mayer understood the importance of press, and stellar student that she is, she set out to use her natural talents to become excellent at it. “It was a strategic confluence of her interests and the company’s needs,” says another former Googler. “Larry and Sergey could give a shit. And the culture doesn’t want to feature individuals. But the media demands it… She was eager, but it’s not like she forced it.”

In fact, she was so good at media that by the late 2000s the stories weren’t as much about Google or its business as about Mayer. Her all-American good looks and burgeoning interest in fashion, décor, and elaborate parties, such as a Sex and the City–themed night complete with cakes in the shape of Manolo Blahnik shoes and designer bags, made her a natural fit for fashion magazines such as Glamour and Vogue. In San Francisco magazine you could read about her 400-piece custom blown-glass ceiling installation by Dale Chihuly in her $5 million penthouse atop the Four Seasons, not to mention her collection of Oscar de la Renta cashmere cardigans and her obsessive interest in cupcakes—she told the magazine that she had bought an array of cookbooks to study cupcake recipes, created a spreadsheet for the ingredients, and then tested the recipes. (Later, her husband, Zachary Bogue, told a reporter, “Marissa doesn’t really like cupcakes. She just called the trend early.”)

There was a refreshing aspect to the detailed coverage. “I refuse to be stereotyped,” Mayer told The New York Times. “I think it’s very comforting for people to put me in a box. ‘Oh, she’s a fluffy girlie girl who likes clothes and cupcakes. Oh, but wait, she is spending her weekends doing hardware electronics.’ ” But there was also sometimes an oddly boastful quality to it. Mayer complained to the Times in 2009 that, for all the press she had gotten, the media had overlooked her athletic prowess. “It hasn’t shown up anywhere that I am really physically active,” she said. “I ran the San Francisco half marathon this year. I did the Portland Marathon… That just shows you how much there are gaps.” (Gawker delighted in pointing out that she had come in 7,074 out of 7,862 people in the Portland Marathon.)

By that time, Mayer had moved into management, becoming a key executive at Google. Her title was “vice president of search products and user experience.” Mayer, in one article, said her job was “to oversee everything that had to do with Google search: what users saw on the homepage, and all the code written behind it.” A BusinessWeek profile of her titled “Managing Google’s Idea Factory” said that she “helps decide which new initiatives get the attention of the company’s founders, and which don’t.” Various biographies and profiles have also given her credit for leading the development of both Google’s search product and its home page, as well as overseeing Google News, Gmail, Google Chrome, Google Health, Froogle, and more. Glamour, in a profile titled “The Visionary,” said that the very act of Googling, from the logo to the perfect list of links, is “like a trip into Marissa Mayer’s mind.” (Mayer told the magazine, “It’s hard to tell where my aesthetic ends and Google’s begins.”) San Francisco magazine wrote, “Just about everything that goes on at the Mountain View company … falls under Mayer’s lens.”

Such claims are somewhere in the gray area between truth and poetic license. No one disputes that Mayer played a pivotal role in shaping how consumers interact with Google. She seems to have a rare ability—particularly for an engineer—to understand what consumers want. But her province was the consumer-facing side, where she signed off on products before they reached the market. Mayer was not on the three-person team that developed Gmail. She had nothing to do with the business side, which developed products for advertisers (and from which the bulk of Google’s revenues comes). Nor did she manage the guts of search itself—the algorithms that give us the results we want. That was a separate team. Even the look of Google isn’t solely a function of Mayer’s vision. Sergey Brin designed the minimalist look of the Google home page and the original Google logo; a designer, Ruth Kedar, refined it to its current look. (Although Mayer didn’t conceive of the Google doodles that appear on the home page—these began, in 1999, when Brin and Page put a stick figure on the landing page to signify that they were out of the office at Burning Man—she did oversee them.)

One person who is a fan of Mayer’s says that, while she didn’t make all the decisions about how the home page looked, she “adopted that point of view, policed it, and curated it.” She seems to have done so in an extraordinarily detailed way, famously testing 41 shades of blue in order to create coherence among different Google products.

The exaggeration of Mayer’s role may not have been her fault—the superwoman myth made for an exceptionally appealing narrative for journalists—but it still caused resentment inside Google, a sense that she was given credit for things that weren’t all hers. “In the early days, the publicity was all about Google, and it was great,” says a former Google employee. “In the later days, it was ‘We’ve created a monster.’ ” Another former employee tells me that there are multiple possible narratives about Mayer. “Is she a great product person and technologist?” he asks. “You bet. But is she insecure and needs attention? You bet. Is she narcissistic? You bet. All of these narratives have a grain of truth to them.”

Continued (page 3 of 6)

In some quarters, the problem was bigger than resentment of Mayer’s growing fame. Among those who worked closely with her there is an undercurrent of skepticism about her skills as a leader. “While she did a lot of good and useful things, she alienated people, because she jumped to conclusions about products and she was not always right, but she always thought she was right,” says a Google executive. A product manager who worked for her feels that she eventually became a hindrance, more of a micro-manager than a help. “All she did was move pixels around,” he says. “There was huge dissatisfaction that built. She became more and more authoritarian, and she would just say no if she wasn’t in a good mood or she didn’t like the color.” He adds, “I absolutely hated working for her, and you could not find a single peer of mine at Google who would work with her again.”

When I say that surely this is an overstatement, he says, “Name me one code-writing Google engineer who [worked with her and] has followed her to Yahoo.”

Mayer’s problems were mainly with people who were at her level. The cliché “my way or the highway” is one that people often invoke to describe her approach. “She is a dictator, with a top-down style,” says yet another Google employee. “It doesn’t work if people feel like they should be equal to her.”

But the more junior people often did love Mayer. She started what’s called the Associate Product Manager program, a two-year course inside Google that is designed to create future tech leaders, and its graduates have gone on to important roles all over the Valley. “If you’re on her team, she protects you and helps you,” says a person who is also a fan of Mayer’s. “If not, she may not play as nicely.”

People who know Mayer on a personal basis say she is both genuine and generous. “She has a sense of responsibility and proportion and generosity that is atypical for the geeks among whom she dwells,” says Kirkpatrick. “She has a cool-fairy-godmother complex,” says a friend and former colleague of hers. “She genuinely delights in bringing other people happiness. Her parties are about just that—just rocking other people’s worlds.” (Mayer throws an annual Halloween party, which has featured fantastical things such as 200-pound pumpkins elaborately carved with mathematical equations, a tree made out of chocolate bark, a movie theater in the backyard, and a custom-made-cookie bar. “Very Willy Wonka” is how one attendee described it.)

But her demeanor in a work setting can be a shock to people who are expecting the Marissa Mayer they see onstage or read about in profiles. She doesn’t display much, if any, warmth (at least not to those who aren’t in her inner orbit) and often won’t meet people’s eyes. In Silicon Valley, where having Asperger’s has almost become a badge of honor—aren’t all super-smart people a little socially awkward?—that shouldn’t matter so much. The rules are always different for women, but Mayer’s quirks go beyond coldness. She became infamous for holding office hours during which even peers would have to wait in line to see her. “She had absolutely no regard for anyone else’s time,” says an industry executive who is well versed in all things Google. “She would keep 30 or 40 people waiting for hours. She had to sign off on every single decision, and they had to wait. She generated so much ill will.”

“Marissa insisted on control from beginning to end in a way that alienated a lot of peers,” says a Google executive, who adds, “People like that are generally not collaborative.” A former Google employee says, “She was very effective in the early years, but she became much more narcissistic.”

There are more sympathetic ways of looking at the complaints. It was Mayer’s job to review products before they went out the door, and that was destined to make her unpopular. She was rabid about keeping Google’s look free of clutter. “I’m the gatekeeper,” she told Fast Company. “I have to say no to a lot of people.” There was also some jealousy, others say. Many think that Mayer’s appearances on the Today show and elsewhere, where she talked specifically about Google, were always helpful to the company. And there is a natural tension between product and engineering that is larger than Mayer, with engineers often focusing on logically pure solutions and product people wanting what is best for the consumer. I even heard a defense of Mayer’s office hours from Jess Lee, who got her start in Mayer’s Associate Product Manager program and is now the C.E.O. of Polyvore. She says she found waiting in the line the ultimate democracy. “There was no pecking order,” she says. “There was just a line.”

By the end of 2009, it looked as if Mayer was on top. Her elaborate, Christmas-themed wedding to tech entrepreneur Bogue, a handsome Harvard graduate she’d met through a friend in 2007, was featured by Vogue, which called her “the gorgeous Google-ite who makes the world searchable for the likes of us.”

But inside Google her career had stalled. In late 2010 she was moved out of her role overseeing search and was put in charge of Google’s location and local services—maps and restaurant recommendations. To the outside world that sounded good, but inside Google search was the center of the universe and anything else was a distant planet. In April 2011, Larry Page stepped back into the C.E.O. role, replacing Eric Schmidt. He dissolved the operating committee, where Mayer had a seat, and created a top-level committee called the L Team. Mayer was not asked to be a member. Peers of hers, Susan Wojcicki and Salar Kamangar, were made senior vice presidents. Mayer was not. Around that time, another executive was put in charge of location and local services. Mayer would report to him.

According to journalist Nicholas Carlson, writing on Business Insider, the engineers had revolted, gone to Page, and basically said, “Us or her.” Three Google people also tell me that that’s indeed what happened. “The feedback from a lot of people was that she wasn’t a team player, that she was counterproductive, and that it was all about what was best for Marissa Mayer,” says one. She also had a reputation for not contributing much to strategic conversations. “She would go on a tangent just to own the conversation,” says one person who dealt with her. “She has to be the smartest person in the room.”

But the re-alignment was also larger than Mayer: the L Team, say Googlers, reflected a belief that it was better to have one person manage a single fiefdom in order to reduce the tension between product managers and engineers; there were others who lost power, too.

Friends say that Mayer was hurt. But publicly she didn’t blink. She answered questions by saying that she had moved to supervising a lot more people. She spoke at conferences. She received awards. She was everywhere. And some who knew her think that Mayer grew from the experience. “She was a lot tougher and more stubborn when she was at search,” says one former Google employee. “People change and mature. She made big improvements.”

Others saw a lesson in it as well. “Internally, it was ‘O.M.G., whoa, Marissa is no longer in power,’ ” says another former Google employee. “Externally, she was brilliant. She handled it with incredible grace. She got her P.R. team on it and said, ‘Oh, now I’m managing more people.’” And it worked: most stories about Mayer simply skimmed over her demotion.

“She is so adept at positioning herself, and she is a survivor,” says a Valley executive. “She had so many enemies at Google. They neutralized her, but they didn’t kill her.”

“She was a genius,” says another Valley executive. “She played the power game better than anyone. She sucked it up, she didn’t quit, she took over what she could, she didn’t tag herself out. And when she had the opportunity to make a move, she did.”

Where Start-Ups Went to Die

If Mayer’s star was descending at Google, Yahoo’s had already crashed. It was a shocking comedown for the company that, along with Netscape, is viewed as having started the whole Silicon Valley phenomenon. Yahoo was founded in 1994, when two Stanford students, the outgoing Jerry Yang and the reserved David Filo, created Jerry and Dave’s Guide to the World Wide Web, which was basically a directory of Web sites to help people navigate the nascent Internet. In those days, before search engines came along, Yahoo was the main way people would find things, and so everyone came to Yahoo. Since the playbook for start-ups during the dot-com boom of the late 1990s was to buy traffic, they all paid Yahoo to advertise. At its peak, in early 2000, Yahoo was worth $128 billion, more than twice what the Walt Disney Company was worth at that time. That was just before the bubble burst and the bankruptcy of many start-ups began decimating Yahoo’s revenue. By 2001, it was worth approximately $4.7 billion.

Continued (page 4 of 6)

The board hired Terry Semel, a legendary Warner Bros. veteran, to rebuild the company, and rebuild it he did: by 2008, Yahoo’s stock price was up to $28, and the company’s revenues soared from less than $1 billion in 2001 to almost $7 billion in 2007. But Semel was so non-tech-savvy that he didn’t even handle his own e-mail, and the company failed to find its way to the future. In the Valley, Yahoo is infamous for the string of deals it didn’t do. The worst one: Facebook. In the summer of 2006, Yahoo had a handshake deal to buy it for $1 billion. Semel decided to offer $850 million instead, according to a former executive, and Mark Zuckerberg, who hadn’t really wanted to sell, took that as his opportunity to walk away.

Yahoo did spend billions on a whole host of other deals, many of which should have given Yahoo a lead in everything that matters today, from social networking to photo sharing, but it all got lost inside the amalgamation that Yahoo became. In fact, Yahoo came to be known as a place where start-ups went to die.

Perhaps more important, says yet another former executive, Yahoo’s technology was never suited to building applications. “If you wanted to build apps, you had to use Yahoo technology that wasn’t what anyone in their right mind built apps with,” says this person. “So no one did. It was too hard.” Indeed, he points out, the last hot product that Yahoo successfully built internally was Fantasy Sports, which launched in 1998.

Semel left, and in 2007, Yang stepped in as C.E.O. While he is beloved in the Valley, he is not regarded as someone who likes to make tough decisions. Famously, he turned down an offer from Microsoft to buy Yahoo for $31 a share in cash and stock. Eventually, Yahoo cut a search deal with Microsoft, which no longer wanted to buy the whole company; the deal, in which Yahoo leased Bing, Microsoft’s search technology, has not performed well. “Yahoo gave up its soul as a search engine,” says Danny Sullivan, the founding editor of Search Engine Land.

By that point, Carol Bartz, the tough-talking former C.E.O. of Autodesk, was running Yahoo. In September 2011, the board fired her over the phone. Yahoo was traumatized. “There were a lot of people who were burned, burned out,” says a former executive. Multiple former and current Yahoo employees talk about the friction, the lack of clear decision-making, the bureaucracy, the red tape that wore people down until they just wouldn’t do anything at all. In an age of smartphones, Yahoo people still had BlackBerrys.

Enter Dan Loeb. On Wall Street, Loeb is known for his acerbic attacks on company executives, and right when Bartz was fired he took a 5 percent stake and demanded that his handpicked people be put on the board.

It was not really Yahoo itself that Loeb wanted. Whatever mistakes Semel had made, his executive team had done two deals that more than compensated for the missed opportunities. One was a Japanese venture called Yahoo Japan; Yahoo owns 35 percent of it. The other, far more important one was the 40 percent stake Yahoo took in 2005 in a Chinese company called Alibaba. Alibaba has become the Chinese equivalent of eBay and Amazon mixed together, and by the fall of 2011 it was clear to the Wall Street intelligentsia that, whenever Alibaba sold shares to the public, it was going to be extraordinarily valuable. People familiar with Loeb’s thesis say that he thought there might be a few dollars a share of value in Yahoo itself, but the main driver of his purchase was Alibaba.

The board, instead of taking Loeb seriously, refused to return his calls and hired as Yahoo’s new C.E.O. Scott Thompson, a former eBay executive, who immediately announced plans to lay off 2,000 of Yahoo’s 14,000 employees. Hedge-fund manager Robert Chapman says he advised Thompson to handle things differently. “I told him, ‘Give [Loeb] board seats. Once he’s inside, he won’t fuck with you. Don’t let your ego get in the way.’ But he didn’t take my advice.” Adds Chapman, “Dan is the kind of guy who is going to get revenge.”

He is, and he did. Another former Yahoo executive recalls sitting around a table with roughly 16 others at an off-site meeting that Thompson held for top executives in the spring of 2012. Suddenly, Thompson got up and walked out, followed by his P.R. person and Yahoo’s general counsel. He didn’t come back for about 30 minutes, and when he did return, he gave no explanation for his absence. One of the people in the room soon found breaking news on AllThingsD: Loeb had sent a letter to Yahoo’s board pointing out that, while Thompson’s official Yahoo biography said he had a degree in computer science, that wasn’t actually true. “We all said, ‘Holy shit!’ ”

Thompson was gone just 130 days after he’d become C.E.O., and Loeb got the board seats he coveted—three of them. He also insisted that a director he had brought along, former MTV executive Michael Wolf, be part of the search committee for a new C.E.O. In the meantime, Yahoo appointed Ross Levinsohn, the company’s former head of global media, as interim C.E.O. Wolf soon came back and said, according to people familiar with events, “I think we can get Marissa Mayer. She’s had some issues, and I think she’s looking.”

The full committee was not immediately enthusiastic about the idea of Mayer. One director, Fred Amoroso, had indicated that he wanted Levinsohn to have the job. There were other candidates, too: Jason Kilar, the highly respected C.E.O. of Hulu, and Brian McAndrews, who had built aQuantive, which he sold to Microsoft. One former board member says that Tom McInerney, a former executive at Barry Diller’s InterActive Corp., was initially the most opposed to Mayer, because her experience was so narrow. In the board’s view, she had never been responsible for the guts of running a business, like managing a profit-and-loss statement or doing layoffs.

And she had worked only at Google, where you never had to worry about how much money you spent or whether advertisers liked you. Although the board didn’t talk much to people at Google—they were worried about leaks—they also discussed what some felt were Mayer’s odd insecurities, her desire for attention, and the need for her to learn to give credit to others. “She was a conundrum,” says one person. “She had great strengths, and we asked, ‘Can she overcome these weaknesses?’ ”

Then Kilar dropped out. The board interviewed the remaining three candidates on July 10 and 11 of 2012. Levinsohn, who thought he had the job, presented his plan, which was to steer Yahoo away from technology and toward content, with far fewer employees.

And then there was Mayer, who had an incredibly detailed, well-researched plan for every piece of the business. “People were largely blown away,” says one former board member. “I’ve hired many C.E.O.’s, and this was one of the best interviews ever.” Mayer also took an aptitude test, administered by headhunting firm Spencer Stuart, which purports to measure management aptitude and ability to lead, and she was off the charts. She said all the right things to allay the board’s concern about her weaknesses, including that she’d surround herself with strong people and that she looked forward to the board’s help. (Mayer first disclosed to the Yahoo board that she was pregnant in late June; no one considered it an issue.)

When the news broke on July 16 that Mayer would be Yahoo’s fifth C.E.O. in five years, the reaction was ecstatic. “There was a collective gasp,” says Eric Jackson of Ironfire Capital, a longtime Yahoo shareholder. “Yahoo was able to hire her away from Google?” LURED FROM GOOGLE, read one headline. GOOGLE’S FIRST LADY JUMPS SHIP TO YAHOO was another. Inside Yahoo, someone put up posters of Mayer titled “Hope” in the style of Shepard Fairey’s famous portrait of President Obama.

Mayer set up a meeting with Levinsohn at the board’s behest, because the board hoped he’d stay on. According to one person he confided in, he came at the appointed time to Mayer’s office. He waited, and waited some more. And then he said to her assistant, “I’m going to wait in my office,” which was just a short walk from Mayer’s. Mayer’s assistant said, “Oh no, you have to sit right here and wait.” Levinsohn stormed off. He left Yahoo shortly after that.

Continued (page 5 of 6)

Mayer’s negotiation about her compensation was slightly odd. The board granted her a rich package: an annual salary of $1 million with a bonus of as much as $2 million, plus a total of $56 million in restricted stock and options. Mayer was unwilling to use any of her own money to buy more Yahoo stock, even though doing so would have increased her upside dramatically. Says one person, she was obsessed not with the reality of her pay but with making sure that what showed up in the filings would lead people to believe that she would earn more than she had at Google. “Some C.E.O.’s care about money, some care about metrics, some care about toys,” this person says. “She cares about public perception.”

Leaning Lady

In her first year, Mayer has made believers of some skeptics. She took Yahoo by storm. Another way of thinking about it is that she Googlized Yahoo. She got rid of the BlackBerrys, replacing them with iPhones and Androids. She started providing employees with free food, like every other Valley company. She instituted a process to allow employees to complain about bureaucracy. She started holding Friday-afternoon meetings called F.Y.I.’s, in which employees can ask whatever questions they choose of her and other executives. She took the stock price off Yahoo’s internal Web site, saying that she didn’t want employees to have a short-term focus. Her first hire from Google—indeed, her first hire at all—was a P.R. person, and the press about Yahoo has been mostly glowing. “She has almost single-handedly transformed the culture and made people proud to work there again,” says Jackson. “I didn’t always admire her at Google,” says a former Googler. “I didn’t think she was effective. But what she has done at Yahoo is phenomenal.”

Another Valley C.E.O. tells me that Mayer regularly shows up for a monthly rotating dinner of Valley C.E.O.’s, and that counter to her reputation at Google she is thoughtful and gracious and interested in learning from other people. In an interview with TechCrunch, the influential technology blog, its founder, Michael Arrington, asked Mayer what her superpower was, the thing she was really good at. “I do think I’m able to empathize,” she said. “Coming into Yahoo last year the company had been through a period of long turmoil and turbulence… If I had a superpower, it’s probably empathy.”

Proof that Mayer can understand other people’s points of view came last spring, when she persuaded Tumblr, the red-hot microblogging and social-networking service, to sell to Yahoo. In the Valley, it is considered remarkable to offer $1.1 billion for a company with almost no revenues, let alone profits, and have it deign to accept your offer. Mayer personally promised David Karp, Tumblr’s now 27-year-old founder, that Tumblr would be able to continue to operate independently. “I do believe the connection they developed was significant,” says one venture capitalist involved in the deal. “She demonstrated that she gets Tumblr, and David really trusts her… If that connection weren’t great, it’s not clear we would have ended up there.”

Last fall, at Loeb’s prodding, Mayer sold part of Yahoo’s stake in Alibaba back to the company for $7.1 billion (Yahoo still owns a 24 percent stake in Alibaba); to date, she has spent $4 billion of that repurchasing shares of Yahoo, a move that investors usually like, and a smaller but significant sum buying up at least 20 companies. She has shut down many of the companies she has bought because they are so-called acqui-hires, which are now necessary because talented engineers are so hard to find that to get them you need to buy their companies and lock them into employment agreements. Although paying a lot of money for companies without revenues is reminiscent of old Yahoo, the view in the Valley is that she has done smart deals.

Under Mayer, Yahoo’s new description of itself is “a global technology company focused on making the world’s daily habits inspiring and entertaining.” She has updated Yahoo’s existing products, including the home page, Yahoo News, and Flickr (although that redesign was already under way when she got to Yahoo). Last spring, Yahoo launched a weather app so well done that Jony Ive, Apple’s design guru, sent Mayer a congratulatory note; the app has been rated one of Apple’s Top 10 products in the app store. Yahoo’s relaunch of its Fantasy Football app has won rave reviews. And she is helping Yahoo transition to a mobile world. Now Mayer says that 800 million consumers visit Yahoo properties each month, up 20 percent from when she arrived, and that 390 million of those consumers are accessing Yahoo properties on mobile devices. (Not everyone is completely convinced by these figures. Analyst Ben Schachter, who covers Yahoo for Macquarie Securities, points out that Yahoo isn’t providing enough information for analysts to be sure if the page views are meaningful, high-quality ones.)

Mayer has also done content deals, from purchasing the rights to old Saturday Night Live clips to build an archive of video content to reportedly negotiating a deal to do a video interview show with Katie Couric, to hiring star New York Times technology columnist David Pogue to write for Yahoo. Mayer has also been utterly unafraid to make big, controversial moves. Famously, in early 2013, she sent out an all-hands memo, which was obtained by AllThingsD, telling employees that they could no longer work from home.

And there’s the stunning rise in Yahoo’s stock. Its market value has increased by $14 billion since Mayer stepped in, and the stock has even briefly closed above Microsoft’s 2008 offer price. Mayer, who said she’d do the Yahoo yodel when that happened, apologized to employees for not having had more time to take voice lessons.

But it doesn’t mean that investors now have faith in Yahoo. The increase is due in small part to the increased value of Yahoo Japan, and in large part to the frenzied interest in Alibaba, which has announced plans to sell stock to the public; the rumors are that its value will be anywhere from $70 billion to $200 billion. “The media cares about Yahoo itself,” says Schachter. “But the vast majority of Wall Street institutional investors are not focused on Yahoo [meaning its core business] at all.” This Mayer has acknowledged. When she was asked by TechCrunch about the stock’s rise, she said, “I think there have been certainly some very smart investments that I owe to my predecessors.”

The big question is whether the reasons for Mayer’s initial success also make for a stellar future. Some are doubtful. “She is fearless in her decision-making not because she is fearless but because it doesn’t interest her mind that she could be wrong,” says a former Yahoo executive. “I say that in a positive way. Yahoo’s flaw was that it hadn’t made decisions in years because it had no convictions. She makes decision after decision and, contrary to her public persona, without data and without knowledge. But it has contributed to her early success.”

And there is a counter-narrative to the story of change, which is that Marissa Mayer hasn’t changed at all. “By the time someone is the C.E.O. of a big company, they have a playbook, and they don’t change,” says an industry executive. “The most dangerous thing is to assume that they will change.”

Indeed, some of the stories coming out of Yahoo bear a striking similarity to those about her tenure at Google. She can still be cold to executives who report to her. One former executive recalls warning team members before they went into a meeting with Mayer that they weren’t going to get what they expected. “Despite the warning, people, very experienced people with decades of experience, walked out and said, ‘That was the worst meeting of my entire career,’ ” this person says. “She will bring a tub of blueberries to a meeting and just stare at you, popping blueberries into her mouth. People feel so dismissed.”

Mayer still makes people wait. She is never late for the Friday F.Y.I.’s with all Yahoo employees, but she is consistently late for meetings with other executives. “This must have happened 10 times,” says a former executive. “You get the team together [for a meeting with Mayer], you wait 10 minutes, 30 minutes, two hours, and she doesn’t show.”

Last winter, Mayer had an all-day meeting planned with the top executives to discuss the 2013 budget. The meeting was supposed to begin in the morning. “The minutes ticked by and no Marissa,” says one person who was there. “It gets later and later, and there’s still no Marissa. We find out that she’s interviewing Ina Garten. Now it’s like two or three hours have gone by. Finally, her assistant comes and says, ‘This isn’t going to happen today.’ ” As this person says about leadership in general, “Some level of respect goes a long way.” Another former executive echoes the complaint, but also says that once he actually got in the door with Mayer she would have good feedback on his team’s work.

Continued (page 6 of 6)

Last December, in a blog post, Mayer announced a revamp of Yahoo Mail for both desktop and mobile. “Email is the ultimate daily habit,” she wrote. It is, but Yahoo Mail is a big deal for another reason, too. It has an estimated 275 million users, and while no one on the outside knows the precise numbers, there’s an assumption that well over half of Yahoo’s traffic originates with people who come to check their mail. In other words, if Yahoo loses those people, there could be a ripple effect.

The team doing the revamp had worked nights and weekends to meet a short deadline, according to Business Insider. One day before the launch, Mayer called a meeting of the team—and insisted on changing the color scheme from blue and gray to yellow and purple. At least four people who were involved have quit. “They are not opposed to working hard,” says one person who was involved with the team. “But they are opposed to having a sword held over our heads: This is how you do it or else. It was the most painful experience of anyone’s life.”

Just recently, Yahoo rolled out another new version of its mail (with purple as the main color), and there have been tens of thousands of complaints. The New York Times called the reaction “the online equivalent of a riot.” One person involved with the first relaunch says that the explanation is pretty simple: the first time around, Mayer lost people that she couldn’t afford to lose.

Loeb Blow

And there was tension with Daniel Loeb almost from the beginning. According to multiple sources, Mayer had said in her business plan that Yahoo’s 14,000-person workforce should be cut to between 7,000 and 9,000. But in the fall she refused to make the cuts, arguing that the culture was too fragile to withstand layoffs. What bothered some board members, including Loeb, is that she refused to do any analysis. “It was her [original] pitch!” says one person familiar with the events. “It would have been fine for her to say, ‘I was wrong—here’s the analysis.’ ” But Mayer wouldn’t offer up any data. Multiple people say that they think the issue is that Mayer wants to be seen as a savior, and as one says, “Saviors do not cut.” (Mayer, however, has instituted a controversial new ranking system for employees and does seem to be culling the workforce that way. The system is wildly unpopular with employees, some of whom are taking to the Internet to complain.)

Yahoo’s core business is facing a difficult battle. The improvements in its traffic are not showing up in its financial results. Mayer has argued since her Google days that “money follows consumers… If you manage to amass a huge amount of consumers, and they use it every day, the money will follow.” That was certainly true at Google, and it is a Valley truism.

But there is a caveat, which is that all traffic isn’t created equal. Yahoo’s revenues from so-called display ads—such as banner ads on Web sites—have continued to fall each of the last three quarters that Mayer has been in charge. Yahoo’s share of the global market for digital-ad spending has continued to shrink, while Google’s and Facebook’s are rising, according to EMarketer Inc., which tracks spending. And it isn’t just that the numbers are down. For the last three quarters, Yahoo’s actual business results have disappointed analysts; the company is underperforming its own guidance to Wall Street. Goldman Sachs just cut its growth forecasts for Yahoo’s revenues and profits.

The bad advertising numbers also caused some tension with the board. Mayer, according to one person familiar with events, argued that they were just a short-term blip but refused to dig under the surface. “She thinks like a debater, not like an analyst,” says this person. “She forms snap judgments and argues for her position, and if there’s contradictory evidence, she argues it away.”

But that’s not why Loeb sold most of his stake. His thesis, according to several people, was that if things worked out the stock would be worth $25 to $30, and by last spring it was $29. So he went to Mayer and said he wanted to sell 20 million shares, or one-third of his remaining holdings. On Friday, July 19, Mayer came back to him with a different offer. She said that Yahoo would buy back the stock itself—thereby guaranteeing Loeb a price that he may or may not have been able to get in the market—but only if he sold 40 million shares. That would bring Loeb’s stake below the 2 percent threshold, which meant that he and the other two representatives would have to leave the board. Loeb was shocked that she would want him and his team gone, according to two people, but it was too good a deal to pass up. On July 22, Yahoo announced that it would buy back 40 million shares from Loeb. The entire affair netted his hedge fund around $1 billion.

There are two ways to look at this, both of which may be true. One is that Mayer didn’t want any pushback, and Loeb is an investor who constantly pushes back. The other is that she is one of the few people to have outmaneuvered Loeb. “She dodged a bullet,” says an industry executive. “I thought she and Dan were going to go sideways. He would have fired her. Both are extreme alphas. Dan was going to turn at some point. She ran the first gauntlet. She got him out. Dan had a gun to her head whether she knew it or not, and she orchestrated his departure.”

Immediately after Loeb left, Vogue ran a flattering profile on Mayer called “Hail to the Chief,” which featured a photo of her lying upside down on a chaise longue and examining a photo of herself on an iPad. In the article, Mayer told Vogue that she “didn’t set out to be at the top of technology companies.” She continued, “I’m just geeky and shy and I like to code.” She went on to say that Eric Schmidt, then Google’s C.E.O., pointed out to her that, “when you want to have an impact that’s bigger than just you, you move from being an individual contributor to managing a team… And I was like, ‘Oh, right—it would be nice to have an impact that’s bigger than just me.’ It’s not like I had a grand plan where I weighed all the pros and cons of what I wanted to do—it just sort of happened.”

The most interesting reactions to this claim come from others in the Valley, some of whom think that her story isn’t so much one of rewards flowing effortlessly from amazing talent as it is of ambition cleverly and aggressively pursued. Which is great—just don’t deny it. “Own it!” a female executive tells me. The only legitimate reason Mayer doesn’t, this woman thinks, is because even she is afraid of the criticism that women who embrace their power can face. Another executive has a slightly different take. This person thinks that Mayer figured out very early on that being a female engineer—a rarity in a culture that reveres engineers—gave her a pass that other women without that credential would never have. After all, her flaws, like her habit of being late, are easily fixable—should she care to fix them. “This idea that she is shy and just a quiet engineer is such fucking bullshit!” the executive says. “She is savvy about knowing that it makes her Teflon.”

At least for now, Mayer is Teflon, thanks to her celebrity status and Yahoo’s stake in Alibaba. There is a belief in the Valley that the ability to create innovative products trumps all flaws. And so, if Mayer’s superpower isn’t empathy but rather an ability to create products that consumers want, if she really is a rare one with that magic, then she will stay on top.

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