The day of reckoning is nigh for Yahoo.
On Tuesday, the struggling company announced that it would cut 15 percent of its workforce—more than 1,600 positions—and close five international offices
as it unveiled a plan it hopes will save it from the auction block.
Yahoo’s chief executive, Marissa Mayer, said in a jargon-filled statement that the plan would enable the company’s leaders to “accelerate Yahoo’s transformation”:
Today, we're announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo's transformation. This is a strong plan calling for
bold shifts in products and in resources. We are extremely proud of the billion dollar plus business we have built in mobile, video, native, and social.
Our strategic bets in Mavens have enabled us build an entirely new, forward-leaning business of tremendous scale and growth in just three years. The plan
announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users,
advertisers, and partners.
The company’s chairman of the board, Maynard Webb, said the board not only is “committed to the turnaround efforts,” but also wants to explore “strategic
The Board is committed to the turnaround efforts of the management team and supportive of the plan announced today. We have tremendous respect for the
thousands of Yahoos who work very hard to make the world a better place. The Board also believes that exploring additional strategic alternatives, in
parallel to the execution of the management plan, is in the best interest of our shareholders.
Yahoo plans to do more than trim its staff list and close international offices—which fell under its strategy to “simplify the business to improve
execution” and “efficiently align resources.”
Yahoo says it will continue to invest in its “Mavens strategy,” or areas where the company has seen the biggest growth: mobile, video, native advertising
and social media. It has projected more than $1.8 billion in revenue from those areas this year:
Yahoo will continue to invest in the Mavens strategy to counterbalance legacy business declines with an emphasis on mobile. Mavens revenue exceeded $1.6
billion in GAAP revenue in 2015, a 45 percent year-over-year increase that surpassed our forecast. Focus on engagement growth and improved monetization for
the core consumer products, together with the syndication of mobile tools through the Yahoo Mobile Developer Suite, Yahoo expects to drive long-term
sustainable revenue growth and reach more than $1.8 billion in Mavens GAAP revenue in 2016.
RELATED: Learn new rules for S-H-O-R-T releases, emails and tweets.
Yahoo also says it will add new users to its current 1 billion by highlighting its search and mail features, along with Tumblr:
For consumer products, Yahoo will consist of three global platforms: Search, Mail, and Tumblr, and four
verticals: News, Sports, Finance and Lifestyle in growth markets like the U.S., Canada,
U.K., Germany, Hong Kong, and Taiwan. For advertisers, Yahoo will be defined by two core offerings: Gemini and BrightRoll. Gemini combines search and native ads for superior results, while BrightRoll offers programmatic buying and selling tools for video, display and native
“Our vision of Yahoo isn’t changing,” Mayers said during Tuesday’s earnings call.
Perhaps it should: Though the company highlighted Tumblr in its strategy to revamp the brand, it wrote down the site’s valuation by $230 billion. The Wall Street Journal explained
the struggling project—meant to boost Yahoo’s growth:
In 2013, Yahoo paid about $1 billion in cash to buy Tumblr, or
about $3 for each of its 300 million monthly active users at the time. Ms. Mayer hoped Tumblr would give the struggling Internet company some buzz while
also driving revenue and traffic.
She projected Tumblr would instantly boost Yahoo’s user base by 50% to one billion. But it wasn’t until October 2014, about 18 months later, that Yahoo
reported a billion users. Even that number is questionable.
Tumblr also failed to capture $100 million in revenue last year—a projection Mayer gave in October 2014.
“In 2015, we experienced a slower ramp in monetization than we initially expected, and coupled with the sales realignment, the business didn’t deliver that
$100 million revenue goal for the year,” she said.
Ultimately, Mayers could put Yahoo up for sale.
USA Today reported:
The company’s vow to explore “strategic alternatives” could be tantamount to a billboard-sized sign on the lawn of its Sunnyvale, Calif., headquarters that
says, “Yahoo For Sale.”
What do you think, PR Daily readers? How well did Yahoo communicate its vision to save itself?