Yahoo! (YHOO) has one of the lowest P/E ratios on the S&P 500, so it is with great anticipation that I read Nicholas Carlson's timely book Marissa Mayer and the Fight to Save Yahoo. I was not disappointed.
The book takes the reader from Yahoo's beginnings as a simple site with links to other sites on the nascent world wide web through to events that take place well into 2014, giving the reader a lot of depth not just on Yahoo's history but also on what's going on there right now.
But it's not just about Yahoo!, as Carlson also places special emphasis on its CEO and how her career evolved both before and after she joined Yahoo. I had no idea that she was such an early employee at Google (maybe employee number 20?) and that she had a multi-year romantic relationship with one of its founders, Larry Page. But following the couple's breakup and a perceived demotion, she soon found herself gunning for the top job at Yahoo.
Though she has made a number of mistakes, which are brought up as necessary in the book, my perception of the processes she values is that she will end up making Yahoo better off, at least relative to its previous CEOs. But perhaps that's not saying much, as Yahoo's CEO position has been a revolving door of disaster. (For example, the man in charge of Yahoo before Mayer was named actually lied about having a computer science degree; it took a hedge fund, Dan Loeb's to be precise, to find this out, which doesn't say a whole lot positive about Yahoo's board.)
She's into lean processes, like failing fast in order to reduce time spent on things going nowhere. She's also big into data experimentation and analysis, which guides her in creating the best possible user interfaces, which are her specialty. It's no surprise then that since her arrival at Yahoo! the company has created some excellent apps and has seen strong mobile revenue growth. The problem for the company is that its desktop business is weak and continues to offset positives elsewhere.
I suspect that over time Yahoo will do well with Mayer at the helm, but I'm not buying the company's shares at this time because I don't invest based on feelings.
One interesting reveal from this book is that when a board says it has made a unanimous decision, it's pretty meaningless. When hiring Mayer, the board had a vote with several board members opposing her hire. But since they lost, they all changed their vote in a second count, and the decision was then taken as unanimous. What a load of BS.
I highly recommend the book if this subject matter interests you.