Yahoo Pins Latest Turnaround Hopes On Google's Marissa Mayer

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Having lost its display dominance last year to Google and Facebook, Yahoo has turned to high-profile Google veteran Marissa Mayer to help reverse the company's decline. Read the release. In making the choice, Yahoo has decided to replace widely respected digital ad sales veteran Ross Levinsohn, who had been serving as CEO on an interim basis following the tortured departure of tech specialist Scott Thompson. After the ouster of Thompson's predecessor, Carol Bartz, after two years, many observers and analysts began to feel that Yahoo would be better served with a sales specialist.

In choosing Mayer, Yahoo has chosen a "products maven." Despite being widely well-respected for her marketing and engineering acumen, Mayer could have some hurdles to overcome once the honeymoon period is over. (Given the revolving door of chief executives in the past three years, it may be hoping too much to assume a honeymoon period for Mayer and the company's shareholders.)

In the meantime, unless Yahoo deals with it quickly, there will be considerable speculation about what Mayer's arrival will mean for some of the initiatives steered by Levinsohn, including Yahoo's Genome, which represents the integration of Yahoo’s data stack into the interclick system, and the hiring of former AdMeld CEO Michael Barrett as chief revenue officer less than a month ago.

Aside from the CEO debacles, the introduction of Genome is reminder that although Yahoo fell from its perch as the leader in display ad sales to the space’s new hegemons, Google and Facebook, according to an eMarketer report in February, it isn't out of options. On the other hand, that doesn't mean it can just keep going as its been doing either. Yahoo is expected see its share of the U.S. display market fall to 9.1 percent in 2012, from 10.8 percent in 2011, eMarketer noted in that same report.

Yahoo’s dominant position is ever-more distant from 2008, when the portal’s share of U.S. display revenues peaked at 18.4 percent. But Yahoo, through all the company and shareholder mishegas of the past few years, has continued to generate revenue growth, and it is still way ahead of Microsoft, which will experience a decline of its share of display dollars to 4.4 percent this year from 4.5 percent in 2011, eMarketer estimates.

It may be a source of relief to Yahoo that Mayer's academic credentials are not in doubt, after the debacle following Thompson's defenestration, which turned on an apparently falsified pedigree. She obtained her MS in computer science from Stanford in 1999, and her first job was as one of Google's first software engineers.  With 13 consecutive years logged at Google, everyone knows what she's been up to.

To many observers, Mayer's hire may suggest Yahoo is once more thinking of itself as a technology company, as opposed to emphasizing its media assets as many assumed it would do after the sale of its search business to Microsoft. Levinsohn, previously seen as top contender for the job, came from the media world and was favored by many for "getting" media businesses and having strong relationships on the advertiser and agency side.

Yahoo cofounder David Filo indicated in a statement that the main consideration in Mayer's hire was not necessarily tech versus media, but the fundamentals of online experience.

“In the last few years, given the turnover, there has been a lack of attention on the user experience,” David Filo, co-founder of Yahoo, who still works at the company, said in an interview on Monday. “We need to get back to basics.”

By David Kaplan and Zach Rodgers

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