GOOG Alphabet Inc

By Deepa Seetharaman 

Yahoo Inc.'s planned sale to Verizon Communications Inc. ended months of speculation about the internet company's future. But the deal spawned another question: What is Marissa Mayer's next act?

Ms. Mayer instantly became one of the most prominent chief executives when Yahoo hired her in 2012 to revive its fortunes. Now, the 41-year-old finds herself in an unusual situation as a relatively young veteran CEO with hard-won experience running one of the best-known names in technology, but also with a string of managerial missteps that critics say ultimately worsened Yahoo's fate.

Ms. Mayer said she would stay on to help integrate Yahoo with Verizon's AOL and shepherd the sale of its stake in Alibaba Group Holding Ltd. The Verizon-Yahoo deal is expected to close in early 2017. "For the next six to nine months, I'm the CEO of Yahoo," she said in an interview Monday. "I certainly plan to stay."

Few executive recruiters and Silicon Valley investors expect her to stick around after the sale is completed. And while Ms. Mayer is certainly young enough to lead another company, experts say it is tough to rebound from a rookie reign many observers see as pocked by mistakes that complicated an already-difficult turnaround.

Investors roundly criticized Ms. Mayer for failing to curtail costs when it was clear that revenue had stalled. Under Ms. Mayer, Yahoo spent over $2 billion to acquire more than 50 startups and hundreds of millions more on forays into mobile software, online video and search. But revenue never recovered, falling 19% in the latest quarter. Dozens of executives left Yahoo as Ms. Mayer repeatedly shifted strategies.

"It's like a pilot who flew the Hindenburg to then be asked to fly the Goodyear Blimp during the Super Bowl," said brand-management expert Eric Schiffer of Ms. Mayer turning CEO again. "It won't happen in the short-term."

Ms. Mayer said in the Monday interview that the sale of Yahoo's core assets for $4.8 billion represents a victory. During her tenure, Yahoo increased users and added lines responsible for more than one-third of its current revenue.

"The fact that Verizon is associating so much value with that is overall validating to our efforts," she said.

After Yahoo, Ms. Mayer could take a role as an investor or adviser to fledgling companies, some people said. Or Ms. Mayer could bring her product expertise to an operational role at another company.

"There will be no shortage of tech startups that would love to talk to her about having her be their CEO," said Iain Grant, partner at executive search firm Riviera Partners. He added that venture-capital firms in Silicon Valley also would covet Ms. Mayer's experience.

When Ms. Mayer, an engineer whose product-design prowess was revered at Google, joined Yahoo in 2012, the company was in bad shape after falling far behind Google and Facebook Inc. in online advertising.

At Google, Ms. Mayer was known as a talented product manager with a brusque style. At times that lent itself to an inability to delegate and a tendency to focus on minutia, people who have worked with her have said.

Yahoo board members hailed her as one of the most promising Silicon Valley executives. She had immediate star power, appearing on the cover of Fortune and in Vogue magazine.

Max Levchin, an entrepreneur who worked with Ms. Mayer at Google, now under Alphabet Inc., and served on Yahoo's board for three years, praised her work ethic and grit. "She works exceptionally hard, and is always willing to spend more time delving into an issue, tired or not, late night or early morning," he said.

Former Yahoo executives say Ms. Mayer wasn't afraid to take risks to reach her goals, whether paying a premium for startups or pushing for a "bet-the-company" strategy. That entrepreneurial spirit is admired in Silicon Valley circles, but at Yahoo it backfired as pressure grew to deliver a profit.

"It was obviously a tough run, a tough go for anyone," said Eric Jackson, managing director of SpringOwl Asset Management LLC and a longtime Yahoo shareholder. "But I think she has probably had enough, and wants to move on to the next thing."

None of Ms. Mayer's last five predecessors wound up at the helm of another public company. Terry Semel, Jerry Yang and Carol Bartz became investors or joined the boards of major companies. Tim Koogle, who left Yahoo in 2001, started a philanthropic group and a land-development company. Scott Thompson, who spent five months as CEO, now runs e-commerce company called ShopRunner Inc.

Ms. Mayer has been an angel investor in startups for years, backing companies such as online retailer One Kings Lane and payments startup Square Inc. She also is on the boards of Wal-Mart Stores Inc. and fitness-tracker company Jawbone.

Ms. Mayer has received over $100 million in compensation during her time at Yahoo, and stands to make about $55 million if she is terminated as part of the sale.

Some analysts and investors say Ms. Mayer could still mount a comeback. JMP Securities analyst Ron Josey pointed to Meg Whitman, who ran eBay Inc. for 10 years before stepping down in 2008. She later became chief executive of Hewlett-Packard, and now runs spinoff Hewlett Packard Enterprise Co.

--Joann S. Lublin contributed to this article.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

(END) Dow Jones Newswires

July 27, 2016 02:48 ET (06:48 GMT)

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