As a transitioning company under new CEO Marissa Mayer, Yahoo's (YHOO) stock has done well. From the last week of October when the stock was trading around 16.5, it has journeyed up to 21.94. That is an increase of close to 33%, which means something good must be happening at the company and investors believe that the company is going to continue its turnaround. Transition is always hard. Whether or not recent decisions by the CEO are popular, price change appears to be on her side. Let's take a look at some of the changes and transitions that Yahoo has made lately.
Yahoo's Transition into "at Office" Employees
On the job for seven months now, CEO Marissa Mayer, is slowly (very slowly) giving Yahoo an identity- no easy task. Since its fall from relevancy in the late 1990's it seems the company has struggled to set its sails in any one given direction. The latest move by the company to announce that work at home employees must now come to the office has opened doors of criticism by some and support from others.
Miss Mayer has a huge responsibility keeping the livelihood of Yahoo employees intact and at the same time delivering profitable returns to its shareholders. No one task or decision taken is going to solve the problem of the company, but each step supposedly is a move in the right direction. I can see logic in the latest decision that she has made. It all may be centered on synergy and creativity in the workplace; the concept of collaboration and energy comes from people being together in the workplace. It is no secret that when people get together collaboration spurs creativity. A Yahoo internal memo said "working physically together" was a way to re-energize lagging fortunes at the company.
Companies with more flexibly, allowing employees to work from home, have found that they've gotten the creativity needed. This trend started to gain momentum in 2005. It is interesting that Miss Mayer is moving Yahoo away from it. I don't believe this is the beginning of an end to the work at home trend, nor do I know if this is just a temporary move on the part of Yahoo. I guess time will tell.
This latest decision is not going to change Yahoo, it's not meant to change Yahoo. It is a step in the right direction according to Miss Mayer's leadership experience. Employees working at home may or may not have contributed to Yahoo's overall problem, but they were not "the problem." This is but one step miss Mayer believes will contribute to making Yahoo profitable.
Not only is she making procedural changes, but it appears she's giving the company a new label also.
A Technology or Digital Media Company?
Who is Yahoo? Do they compete directly with Amazon; are they a media company? Well, the one thing we do know is that Miss Mayer, who came from Google, has defined the company as a "Technology Company" as compared to what it used to be called, a "Digital Media Company." I am hoping 2013 helps define a broader direction for Yahoo as a whole. So far the new CEO has made some decisive "tactical" decision-making processes that she deems good for the company.
I'm not quite sure what this means for Yahoo and I will be interested to see what the company does to make itself profitable in 2013. The reason this puzzles me is because of the things that I have seen Yahoo do in 2012. look at a list of these things:
- Yahoo Sports and NBC Sports announced a partnership to deliver news, fantasy games, and video coverage of sporting events. Both are very well received and respected in the sports reporting arena.
- Another multi platform entertainment series was launched that combined the distributors of CBS Television's "The Insider" with Yahoo's online "OMG."
- Wenner media was given the responsibility of expanding the reach of "OMG" and Yahoo music by working with three different media sources: US weekly; Rolling Stone; and Men's Journal.
There are more "media oriented" moves that Yahoo made last year that would cause me to wonder what the concept "Technology Company" is going to look like instead of the old description "Digital Media Company".
Simplifying Its Mobile App Presence
Another change that Marissa Mayer is making is in Yahoo's mobile app division. She is said to want to reduce the number of apps from 60 to 12 which would mean an 80% reduction, and this is her reasoning behind that statement:
"You decide what the apps are, and then you migrate apps into each other, and some of the apps go away. You have to whittle it down. I think 12 to 15 is the right number. Ultimately, you want to not trouble users by making them download and install too many applications, but at the same time many applications are single-purpose."
Her modernization of Yahoo also included revamping Flickr. This took place at the end of last year but just recently another update came out that allowed people to tag their friends from apps using the "@" symbol, because this is a feature that other photo sharing and social networking sites already have. And the recent upgrade of the Flickr app will offer high resolution photo display and faster uploads. Because of this consumers can count on the Flickr app being one of the few that Yahoo keeps and offers through iPhone and Android.
Last summer there were complaints that the company wasn't relevant anymore, and now we are watching Mayer bring Yahoo into the "modern world." Even though Google (GOOG) and Facebook (FB) appear to be much bigger than Yahoo right now I believe the company is on the right track and the recent price movement appears to confirm it. I'm interested to see how the company transitions in the next couple years to help define what "Technology Company" means. Making 500 employees who work at home come into the office with the other 12,000 may not be popular in the short run but we shall see how it helps the company in the long run.