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Turning Yahoo around is going to be really tough. And this really has nothing to do with new CEO Marissa Mayer and everything to do with the current state of Yahoo and how long its products have been neglected.

Some of the big challenges she faces and what impact she might have on them:

  • Wall Street’s focus on the quarter. Wall Street expects results in months, not years (see what’s happened to Apple’s Ron Johnson at JCPenney). That’s extremely unrealistic given the depth of problems at Yahoo. Unlike Google, Facebook, and more recently public companies, Yahoo doesn’t have the extreme dual-class share structure that lets Page or Zuck say “fuck Wall Street, I’m going to do what’s right for the long term.” There’s not much she can do to change this.
  • Flight of talent. Yahoo has lost a lot of talent over the years. This is something that Google has only begun to face recently. It’s been a long time since Yahoo was considered a great place to work by top engineers or product people. Having Mayer on board might help this a bit. (If it weren’t for the fact that they’re down in Sunnyvale, I might consider sending my resume in post-Mayer.) But Yahoo has been known for layers of management that don’t let engineers do their thing. I would expect that one of her top priorities will be to make Yahoo an attractive place to work for engineers.
  • Zero focus. Yahoo’s brand has been all things to all people. Is it a tech company? A media company? No one knows. None of the recent CEOs have been able to articulate a vision for the company. Mayer can certainly improve this by ruthlessly killing off non-core products. It’s unclear, however, how much she did this at Google. It seems most of Google’s retirement of dead products began after she moved into her new role.
  • A hostile press and digerati. Many in the media and digerati will hate on Yahoo no matter what it does. I hope that with a new CEO who is generally respected in Silicon Valley they will give her moves a fair hearing.

Yahoo has also lost early leadership in four of the most important technologies for the future: search, social, local, and mobile.

  • Search. Obviously, Mayer knows a lot about search. But previous Yahoo CEO Carol Bartz essentially sold off Yahoo’s search to Microsoft, and I don’t know that there’s a good way to get that lucrative business back. If anyone can figure that out, it’s Mayer.
  • Social. Although Yahoo had one of the original social graphs with Yahoo Messenger, it failed to capitalize on it. It also had a number of failed experiments with Yahoo Mash and Yahoo 360. Flickr has historically been one of Yahoo’s strong spots, but it has long been neglected. (So much so that I started moving all my pictures to Picasa, just in case Yahoo throws in the towel.) Given Google’s abysmal track record in social, I don’t hold out much hope here.
  • Local. Remember Yahoo Maps? Yeah, at one time Yahoo was an important player in the local space. That was a long time ago. This is another area that Mayer has expertise in. But Google has made a lot of outsized investments in local that would be extremely hard to replicate. Apple is trying to do that now. But Apple has a huge asset with the iPhone: It can embed data collection into iOS to build its dataset, much like it did to push out Skyhook Wireless.
  • Mobile. Before the smartphone era, Yahoo actually had some decent products in mobile. But despite owning Flickr, it completely missed the transition to mobile photos. See this fantastic answer on Quora: Kellan Elliott-McCrea’s answer to Flickr: Why did Flickr miss the mobile photo opportunity that Instagram and picplz are pursuing? Yahoo’s mobile strategy was built largely around working with carriers. That has become much less important with the rise of smartphones. Unlike Google and Apple, it doesn’t have its own OS. And unfortunately for Yahoo, it lost its lead in core drivers of mobile use — maps and photos. Mail is also not as strong as it used to be.

As I write this, I’m reminded of my time at Aol. Aol also had a lot of early leadership that was squandered by CEO after CEO chasing the quarter and refusing to invest in innovation, despite having some smart people who knew what was coming.

Aol’s current CEO, Tim Armstrong, is another ex-Googler, and he has hardly set the world on fire. His single biggest accomplishment has been selling Aol’s patent portfolio to Microsoft.

I give Marissa better odds than Tim at Aol.

Among all the advice that I’ve seen headed for Marissa this week, she would be best served by reading this piece by ex-Yahoo Sriram Krishnan: Unsolicited advice for Marissa Mayer.

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