Who Knew Running Yahoo Was So Hard?
Marissa Mayer Takes One for the Team
As we begin to think about writing the history of the Age of Trump, my advice is to follow the money.
For example, answer this question: how do CEOs make a fortune by killing businesses and putting working and middle class people on the unemployment line? If your answer is “Sending our beautiful jobs to CHY-nah!” you would be only partially correct. Here’s another idea: killing businesses, regardless of what they make, can be highly profitable. In “Dissecting Marissa Mayer’s $900,000-a-Week Yahoo Paycheck” (New York Times, June 3, 2017), Vindu Goel asks how former Google wunderkind Marissa Mayer managed to take home a quarter of a billion dollars in salary and bonuses and still find time to destroy Yahoo in slightly less than five years. The answer is this: between 2012 and 2017, as the company was becoming irrelevant in the fast-moving world of social media, unable to secure its site, and careening towards bankruptcy, Yahoo’s stock price more than tripled because Mayer essentially turned it into a holding company for other, more successful, ventures like Alibaba. One part of Yahoo thrived, while another disintegrated in a wave of bad management and neglect.
Thus, as time went on, the original Yahoo was no longer valuable as a company, just as a crack house has no value as real estate but plenty of value as a vehicle for moving product. In other words, Yahoo was only valuable as a container for other enterprises. “After the $4.5 billion sale to Verizon, shareholders will still own an investment company with $57 billion of stock in two Asian internet companies, Alibaba Group and Yahoo Japan,” Goel notes. Because, like many CEO’s, Mayer was mostly paid in stock and stock options, what would normally be seen as a colossal failure — taking the reins of a struggling company and driving a stake through its heart — will soon, I predict, position her for another big adventure. Maybe President of the United States! Who knows?
Break that ceiling, girl!
Meanwhile, last week the old economy made an appearance as a performance piece in which Donald Trump pretends “Russiagate” isn’t happening, and the coal industry is the wave of the future. Among the players were the 51,000 people still employed in the coal industry, who were cheering Trump’s decision to withdraw from the Paris Climate Change Accord. Can they have forgotten that Big Coal has always had contempt for them? That they can’t cheer too loudly or too long because if they do, they cough and they spit little bits of lung into their handkerchiefs?
We can only guess who will be the politician that tells them the hard truth: in the face of a financialized economy of such immense proportions, that other economy, the one in which the menz make stuff with their handz, or chop it out of the side of a mountain, is deader than the proverbial doornail. We know this because the explanation for why Mayer has not failed reveal that the success of a company is not measured in the quality of what it makes, the number of people it employs, the working conditions it fosters, or its social mission. The only workers who matter in this new economy are the ones at the very top, and the ones who don’t work at all — the shareholders.
“The only sign you can point to when evaluating a company over a long period of time is how shareholders have done in the exchange,” said David Wise, who heads North American sales at Korn Ferry Hay Group, a firm that advises companies on executive pay packages. “Over the last five years, Yahoo shareholders couldn’t have done a lot better than this.”
But the people who used to work for Yahoo certainly could have done much better. Several people interviewed in the article point to bad decisions Mayer made, but conclude that Yahoo was probably so behind the curve it was unfixable. I mean, who knew that a weather app and a news app would not turn the company around? (Answer: everybody.) In the face of this idiocy, it seems like a real possibility that Mayer was actually hired to dismantle the company in the most profitable way possible. Creative dismantling may be the skill set of the future. It might also explain why Carly Fiorina and Donald Trump never worried that their own business failures would be a bar to becoming President of the United States, because in their world, down is up.
Another clue that failure is the new success is an odd allusion to sexism by an executive recruiter who has worked closely with Mayer:
“She was an attractive, high-visibility C.E.O. trying to bring some excitement and glamour to Yahoo,” said Martha Josephson, a senior partner at the recruiting firm Egon Zehnder, who helped Ms. Mayer find several of her top executives. “As hard as the job was, she didn’t get a break. If she were an ugly man, she’d be a hero.”
When the sale to Verizon closes, Mayer is expected to walk away with around $240 million, so who knows how much the other shareholders are making.
So I’m guessing — despite the sexism — that she’s a hero to someone. Just not the former Yahoo workers who are knocking on doors in Silicon Valley hoping to catch on with another coal mine.
Claire Potter is Executive Editor of Public Seminar and Professor of History at The New School. You can follow her @TenuredRadical.