Yahoo CEO Marissa Mayer has been trying to play nice with advertisers in an attempt to grow Yahoo as a whole. For a company that relies on advertisements for 75 percent of its revenue, Yahoo needs to strike some deals with ad agencies in order for the company to become successful under Mayer’s control.
Mayer will sit down for a conference call with business executives on Tuesday and will have to once again lay out Yahoo’s plan for growth. Without a plan that is deemed worthwhile, Mayer will fail to convince advertising executives to show interest in Yahoo, which could easily ruin the company.
Mayer’s Bad Rep
Yahoo’s CEO has been able to turn the company around but has yet to get it back into the safe zone of continuous profitability. With such a slow recovery, Mayer has received a bad reputation from people who believe she is not capable of making Yahoo successful again.
Whether or not the business executives that doubt Mayer are correct has yet to be seen, but either way, Mayer needs to step up her game in order for Yahoo to turn around and make it out of 2014 alive.
When it comes down to it, Yahoo’s slow recovery cannot be blamed entirely on Mayer no matter how bad things end up. She is the sixth CEO to takeover the Internet giant in just six years, showing just how unstable Yahoo is, especially among its management.
David Cohen, global chief media officer of the Universal McCann group, has said Mayer’s reputation issues stem from her decision to focus more on products than on advertising. This business strategy does not make sense to the majority of analysts since Yahoo has historically relied on advertising for most of its revenue and continues to do so.
Perhaps the hardest thing for Yahoo to overcome is its competitors. Google will always be one of Yahoo’s largest ad network competitors but there are two new companies putting up a fight as well, Facebook and Twitter.
Since these social networks have become immensely popular with hundreds of millions of users, Yahoo’s ability to convince advertisers of its advantage over Twitter or Facebook has become limited.
Yahoo has been struggling to hold on to its ad revenue so far this year, after it slid 11 percent in the second quarter. The drop in ad revenue came as a result of decreases in the price of ads that Yahoo was able to secure for its network.
The company has been unable to get out of its slump for more than four years and Mayer has been unable to change that. Analysts overwhelmingly doubt that Yahoo will be able to change much in the next year or two and in general, they expect lackluster financial reports for this quarter.
If Yahoo finds a way to compete against Twitter, Facebook, or Google, it may actually have a chance, but until then, the company will likely remain stagnant.