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Yahoo spinoff brings an end to a pioneering era

Sharon Gaudin | Dec. 10, 2015
As company chooses new focus, what will happen to its Internet business?

One question that was answered on Wednesday morning is that Yahoo CEO Marissa Mayer is not being pushed out. In an interview on CNBC today, Webb answered a direct question about whether Mayer would be staying on: "Absolutely."

He also said, "I've never met anybody who works harder, is smarter and cares more. We want to help her return this company to an iconic place where it belongs."

There may be other reasons that Mayer, despite failing to deliver the big turnaround that many anticipated, still has her job today.

Yahoo simply may not want to, or be able to afford to, fork over the big money Mayer would get if she's let go. And her departure would be another blow to a company that has not only struggled financially but has had to bear the burden of losing one CEO after another in the last several years.

When Mayer came on board in July 2012, she was Yahoo's third CEO in less than a year. That kind of top-level upheaval is disruptive to a company already trying to regain its once big name and traverse a rocky financial road.

"The fact that Mayer is staying says they would like some consistency," said Shimmin. "Yahoo doesn't want to appear to their shareholders that they're junking everything and starting over."

So what will become of Yahoo's spunoff Interent business? Moorhead, at least, doesn't have high hopes.

"Separating an Alibaba investment from the core business does absolutely nothing to increase its chances," he said. "It wasn't burdened by the Alibaba investment.... To be successful, Yahoo needs a new strategy, one that doesn't go head-to-head with Google, Apple, Microsoft or Facebook.

"Right now, they're playing RC Cola vs Coke. Yahoo needs to either jump completely over its competitors and attack something different, maybe the second wave of IoT, or do what they're doing in a dramatically different fashion, like open-sourcing everything to create an alternative network."

Making that work, according to Moorhead, is not impossible. But it is improbable.

 

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