BOOK REVIEW
Title: MARISSA MAYER AND THE FIGHT TO SAVE
YAHOO!
Author: NICHOLAS CARLSON
Publisher: JOHN MURRAY Publishers, HACHETTE India, 2015.
Price: Rs. 599/-
BIG TIMING LITTLE START UPS
This book, by Business Insider’s Chief Correspondent
Nicholas Carlson, is on the rise and fall of Yahoo!
Marissa Mayer, its present CEO, since 2012, inherited a
chaos of missed chances, but only in hind-sight. At first, in the nineties,
under COO Jeff Mallet and co-founders Jerry Yang and David Filo, the company
just grew and grew, creating ‘pod’ after ‘pod’.
Then, under Hollywood movie mogul turned Internet CEO Terry
Semel, between 2000 and 2007, the company was doing well enough, but was not
positioned for future shocks. And so, opportunities to buy Google, Facebook,
and YouTube - outright, were passed up. This, even though they were
going for a relative pittance. At the time, they were just start-ups after all.
And Yahoo was already the biggest Internet Company in the world.
To wit, Yahoo, built on a few million in venture
capital, was valued at $ 848 million, when it first went public in 1996, $ 23 billion in early 1999, and $ 105 billion by
the year-end. In January 2000, Yahoo had a market cap of $ 128 billion!
This book may be about the roller-coaster ride that Yahoo
went on, but, at the same time, it is a fascinating interlinked memoir on many
of the stars of the Internet. It sets a
crackling pace because a ‘quarter’ is a long time in the digital world. It
tells us about the dramatis personae , what they thought, and how they
worked.
There are many Indian and Asian names in this Silicon Valley
narrative, some in ownership and key positions. And it is interesting to note
that top executives, not just the founders, earned several hundred million
dollars in compensation for their contributions.
And the M&A activity, always swirling around the key
players, supported by Hedge Funds and Investment Banks, were make- or-break for
valuations and discovery. Valuations that were as much visionary and calculated
gambles, as the innovative product development and organic growth in each
Internet company and dot.com.
Yahoo also made one great bet of its
own. One of the most prescient things
Jerry Yang, the co-founder of Yahoo did, in 2005, was to invest
$1 billion in Jack Ma’s Ali Baba
and its e-commerce search portal Taobao. Back then, it was only a tiny
start-up too.
Yang negotiated 44% of Ali Baba’s stock in return for
Yahoo’s billion. In subsequent years this became worth a colossal
fortune, over $ 30 billion for the Taobao portion alone, even before Ali
Baba went public!
And this compared to Yahoo’s
market cap in 2011, which had sadly declined to just $ 24 billion. But, fortunately, Yahoo’s global asset
valuation in 2011, including Yahoo Japan etc. but not including the core
Yahoo.com business; was worth about $ 35 billion.
Carlson writes from a near insider’s perspective, in an
intimate, Silicon Valley idiom, gossipy, mixing the personal with the psychological,
the business with pleasure. He strives to provide insights, very much the investigative
journalist, with excellent research, to back his flowing, jargon-free, style.
Marissa Mayer, the would-be White Knight, is a blonde,
hard-driving diva, who made her reputation at Google. Mayer has a genius
for orchestrating and creating user-friendliness, and did so, in all Google
products. ‘It was ‘a triumph of empathy’ as Carlson puts it.
Mayer may have come to Yahoo too late to save it.
Still, she was given a couple of years by the Ali Baba cushion, because
it made Yahoo stock an attractive if undervalued buy. Besides, you
couldn’t buy Ali Baba stock directly because it was Chinese and still
private.
Ali Baba eventually went public in 2014,
and its stock price soared along with its valuation. But Yahoo, assessed
on its own, tanked. Its core business actually had a negative valuation in 2014.
So it is unclear where Yahoo is
headed next, but the world of the Android and Apple smart phones
beckon. But can Yahoo App-up fast enough to make the cut?
For: Mail Today
(656 words)
May 5th, 2015
Gautam Mukherjee
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