CEO Mayer exits Yahoo as Verizon completes acquisition

Arvind Hickman
By Arvind Hickman | 14 June 2017
Marissa Mayer.

Yahoo CEO Marissa Mayer has left the business as Verizon officially completed its US$4.48 billion acquisition of search and media business Yahoo.

Yahoo has been combined with AOL and will sit under a new media and technology division Oath, which has 50 media and technology brands including HuffPost, Yahoo Sports, Yahoo Mail, Yahoo Finance, AOL.com and Tumblr.

In Australia, Seven and Yahoo will continue to invest in the Yahoo7 joint venture but Seven will launch and market its own long-form catch-up service.  See: Seven and Yahoo joint venture to continue despite Verizon buyout.

Globally, the move means there will be cuts to about 15% of staff in the combined Yahoo AOL entity.

Former AOL chief executive Tim Armstrong has been named as Oath CEO and has been working on integration plans since the transaction was announced in July 2016.

Verizon said he is also focusing on open advertising technology solutions, with brands such as ONE by AOL and BrightRoll that span across mobile, video, search, native and programmatic ads.

See: Yahoo acquires BrightRoll for $640m

“We’re building the future of brands using powerful technology, trusted content and differentiated data. We have dominating consumer brands in news, sports, finance, tech, and entertainment and lifestyle coupled with our market leading advertising technology platforms,” Armstrong said.

“Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners.”

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Mayer's golden handshake

Mayer served at the helm of Yahoo for the past five years with a mixture of achievements and challenges. She is reportedly leaving with a $23 million golden handshake and has about $260 million worth iof Yahoo shares.

In a blog post she said: “It’s been my great honour and privilege to be a part of this team for the last 5 years. Together, we have rebuilt, reinvented, strengthened, and modernised our products, our business, and our company.

“Looking back on my time at Yahoo, we have confronted seemingly insurmountable business challenges, along with many surprise twists and turns. I’ve seen our teams navigate these hurdles and mountains in ways that have not only made Yahoo a better company, but also made all of us far stronger.”

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Mavens move

Under Mayer's watch, Yahoo has increased its market capitalisation by $43 billion over this period, more than tripling its share price since 2012.

It has also refocused its ad tech around the fastest growing areas of digital advertising – mobile, native, video and social, referred to as the 'Mavens'.

The Mavens business has grown from $200 million in 2012 to more than $2 billion in 2016, which is about 42% of Yahoo's revenue.

It's mobile revenue was nearly $1.5 billion and the company acquired BrightRoll and Flurry to grow its mobile and video business.

The business has more than 1 billion monthly users – only behind Google and Facebook – benefiting from a decision to reorganise digital content into four verticlals - news, sports, finance, and lifestyles.

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Data security disaster

However, it's not all been rosy. Yahoo's is the only major search business where net search and display revenue has struggled when traffic acquisition costs have struggled when compared to rivals.

Yahoo's $3 billion bets on startups like Tumblr and community-based social commerce website Polyvor has failed to deliver growth.

See: Yahoo data hacked - 500 million account details stolen

Undoubtedly the biggest problem Mayer has faced is data security. The digital company has suffered the largest data breaches in the history of the internet, affecting more than 1 billion user accounts across several years.

US authorities have arrested four men linked with Russia's intelligence agency over one of the breaches.

This has significantly eroded trust in the Yahoo Mail service and as a result Verizon dropped its offer to buy Yahoo by $350 million.

Restoring trust and confidence in data will be one of the first challenges for new Oath boss Armstrong.

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