Why Does Marissa Mayer Need McKinsey to Make Sense of Yahoo!?

If Marissa Mayer doesn't know how to turn around Yahoo! after four years, is she really the right person to lead it?
By Eric Jackson ,

According to a Kara Swisher report, Yahoo! (YHOO) has hired consulting firm McKinsey to advise the company on how it should re-organize its core business.

Quite simply put, I'm baffled by this.

CEO Marissa Mayer has been running Yahoo! for almost four years now. I could understand if she wanted to hire McKinsey in her first 90 days on the job to give her advice, but why now? Why doesn't she know how to reorganize the business at this point?

It seems obvious that she doesn't know what to do. She's lurching from one strategy to another, be it Tumblr or new products or trying to replace Alphabet's (GOOGL) - Get Report (GOOG) - Get Report Google search on the Apple (AAPL) - Get Report iPhone. All that has come and gone without much to show for it.

Prior to Mayer's arrival, Yahoo!'s 2012 annual earnings before interest, taxes, depreciation and amortization was $1.5 billion. Over the past 12 months, Yahoo!'s EBITDA has been cut in more than half, coming in at $630 million.

She's also increased the headcount at the company, but then appears to be backtracking on this, with recent comments that the company will look at curbing headcount; not to mention bringing in some respected executives to surround her, then implying they didn't have the skills or passion to stick with Yahoo! after their departures.

When you look at all the senior people who have left Yahoo! this year, as documented by Swisher, it's clear that something is not right in Sunnyvale. Mayer simply can't have let all these people go because they weren't passionate enough.

It's hard to understand why bringing in McKinsey is going to be more successful than any of the other tries over the past four years.

Even parts of the business that may be promising, including promises of a new way to do mobile search that may revolutionize the industry, have been reportedly pushed back from next year.

As a shareholder, I'm dubious it will live up to the hype.

Perhaps even more puzzling is that new executives are being asked to give a pledge (verbal or written) to stay at the company for the next three to five years. Not only is this highly unusual, but what purpose does it serve?

To me, all of this shows that Mayer has had no results to speak of, a strategic lurch, executive turnover, oddly throwing them under the bus and more.

It suggests that Mayer should never have been named a CEO in the first place. Not at Yahoo!, nor at any other company. She simply does not have the management experience to succeed at the job which requires setting a strategy, sticking with it, and -- above all -- leading.

This article is commentary by an independent contributor. At the time of publication, the author was long YHOO.

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