Yahoo chief executive Marissa Mayer has plenty to celebrate after her first full quarter as the company’s top executive.
Much of the talk about Mayer’s changes at Yahoo has focused on her changes to its most visible products — Flickr, Yahoo Mail — and her decisions to change the corporate culture at Yahoo with free food and trendier company phones. Now those changes appear to have resulted in early success, with the company reporting its first year-over-year revenue growth in four years.
Yahoo didn’t hit it out of the park. It only slightly beat analyst estimates, and investors have actually sent the stock down in Tuesday trading. But even a small edge bodes well for Mayer and her path for the company.
Mayer said she’ll continue her recipe for success by keeping a focus on the products customers use habitually, to encourage them to come back to Yahoo frequently in the course of their daily lives. She’s made it clear she thinks that success lies in personalizing content and that the best way for Yahoo to do this is by turning its efforts to the mobile platform. She said she will task about half her engineering team with making products for mobile.
Analysts were also impressed with Yahoo’s rising search revenue. BCG Partners analyst Colin Gillis said in a note to investors Tuesday that search is an area where Yahoo has “a clear opportunity to improve its fortunes.”
Still, Yahoo still faces a lot of barriers. Internet advertising is a tough business, and one that’s facing problems figuring out how to manage the shift from profitable display ads to less lucrative ads on smartphone and tablet screens.
It’s still too early to say that Yahoo is “back,” given these challenges, but its future does look better than it has in years. Mayer is the company’s fifth interim or permanent chief executive in the past four years. During that time, Yahoo has gone through a major identity crisis as its executives tried to figure out whether it was a media, advertising or engineering company. Mayer, with her credentials as a top Google employee and that company’s first female engineer, seems to finally be combining those pieces into a more stable vision.
Following up on this quarter’s modest success will be Mayer’s next challenge, the San Jose Mercury News noted. Mayer herself warned that turning Yahoo around was going to take some time, but her first quarter has set the bar high.
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