Yahoo just named a new CEO — Google veteran Marissa Mayer — but on the day she was supposed to start work, the company also announced second-quarter earnings, and they missed expectations by $0.02 a share. Wall Street wanted $0.20 per share and got $0.18. But Yahoo still made money: about $227 million, down from a year ago, a profit nonetheless.
The Wall Street Journal cut to the chase ("GAAP" is an accounting term — it's best to favor the GAAP and discount the non-GAAP, but non-GAAP can provide a sense of how much raw profits is coming in the door):
The numbers are sort of a split decision. A beat on a non-GAAP basis, a bit low on a GAAP basis, revenue a little light. That lack of growth or traction crystallizes the sort of stagnation that’s captured Yahoo for several years now. Mayer has her work cut out for her.
Lack of growth. This is Mayer's Number One Challenge: using her product expertise to drive innovation and growth at a company founded in 1995 that might have put its growth years behind it.
Earlier today, I went on "AirTalk" to discuss Mayer's ascent with Larry Mantle. I said then that if she succeeds as CEO, in perhaps the toughest job in corporate America, it would be like what Steve Jobs pulled off in turning Apple around. But on reflection, I think it could be closer to what Alan Mulally has done at Ford. Mulally came into a tough assignment and made a series of bold moves, from borrowing billions to keep Ford afloat to selling off brands that didn't fit with his vision of the future.
Ford didn't have to be bailed out during the financial crisis and a few years later, it was taking U.S. market share from Honda and others with products that the market loved. That could be a playbook — if not the playbook as cars aren't computers and aren't the consumer web — for Mayer as she tries to restore Yahoo to glory.
UPDATE: Another model for Mayer could be Tim Armstrong, who's currently running AOL. Of course, when you look at Internet companies, AOL is so pre-Yahoo than it seems like a Web 0.0 enterprise. In the "AirTalk" segment, I brought up the prospects of Mayer making some acqusitions to juice Yahoo's growth (Yahoo has over $2 billion in cash on its balance sheet), so in that respect AOL and Armstrong offer a cautionary tale: there have been all manner of problems with its purchase of the Huffington Post in 2011 for $315 million, notes Jeff Bercovici at Forbes. Then again, Mayer is more likely to avoid media plays and concentrate on product improvements.