One of perennial questions about Yahoo has been, "What is Yahoo." As the pioneering Web brand slid downward, rebuffed Microsoft's generous acquisition offer and was overshadowed by the likes of Google, Facebook, Twitter and Amazon, the question morphed into "Is the beleaguered Yahoo going to fade away?"
Marissa Mayer, the fifth Yahoo CEO in five years, seems to have a clear view of what Yahoo is, and a plan remove the word "beleaguered" as an adjective preceding its name.
The stock price is up over 70 percent since Mayer took over in July 2012. She has upgraded the executive and engineering staffs, updated Yahoo's mobile apps with an aspiration for them to be more "delightful" and "inspiring," and added 300 million younger visitors, 110 million blogs, 24 billion minutes of month of usage and 90 engineers via the $1.1 billion acquisition of Tumblr.
Mayer's view of Yahoo isn't much different from that of her predecessors, defining the company as a "media network" -- the marriage of content and ads. She states Yahoo's mission as giving "end users something valuable and delightful that makes them want to come to Yahoo every day" and to "help guide people's daily habits in terms of what content they read."
The super-focus on media indicates that Mayer will continue her efforts to eliminate squandering of resources on peripheral projects or in areas where Yahoo has low odds of winning big.
Google, for example, is an everyday habit for the majority of people connected to the Internet. It delivers 100 billion search results per month, each one in milliseconds, for about a billion people. Mayer, who spent 13 years at Google, knows that the company she has been running for the last 309 days isn't going to become the search leader.
That said, Yahoo can continue to improve its search user interface and generate a few billion in revenue (unlike Google's nearly $50 billion last year) using Microsoft's Bing search engine for now. But the company has to generate far more revenue and time spent on its properties by personalizing the overall Yahoo user experience and offering more content, such as Tumblr's.
On the social networking front, Facebook is by far the dominant service. It's a daily habit for 665 million people, and accounts for the vast majority of minutes spent on line. Yahoo isn't going to challenge Facebook to become the town hall for the Internet, and has focused more on placing Facebook and Twitter hooks on Yahoo properties.
It turns out that Mayer just acquired a budding social network in Tumblr, but she made no mention of Tumblr's social networking capabilities in the press release or in her remarks on a conference call with financial analysts. It's as if the social aspect of Tumblr was swept under the carpet, so as not to draw attention to how it compares to Facebook or Twitter.
Tumblr is similar to Twitter with its following and followers model, but lacks the more variegated social graph of Facebook and Google+. Nonetheless, Yahoo can use Tumblr data to create richer "interest" graphs, and deliver users more content tailored to their profiles.
In essence, Mayer's plan for Yahoo is to be for personalized content what Google is for search and Facebook is for social networks. It's not that Google or Facebook aren't focused on personalizing content or social networks, but it is not their sole focus.
Yahoo has the leading news, finance, sport and entertainment sites, and reaches about 86 percent of U.S. Internet users per month, per comScore's data. It ranks second behind Google in the U.S., according to ComScore, with 191 million unique U.S. visitors in March 2013. But the company hasn't shown much growth in users or revenue.
Now, Mayer needs to show that her plan is really working. She'll have that opportunity on a quarter-by-quarter basis, but only a few quarters more to use her standard disclaimer on earnings calls: "Getting the company growing at a rate we would like to will take several years."