If you want what will go down as the definitive qualitative take, read on ...
Lots of people hate Yahoo! Simple as that. And, among the haters, quite a few hate Yahoo! because they, for some reason, can't stand Marissa Mayer.
For example, you don't even have to read between the lines of a Kara Swisher piece on Yahoo. The hate comes across loud and clear. It's almost as if -- and maybe it is as if -- people such as Swisher want to see Mayer fail. Life's too short to speculate on the motivation for such vitriol. It is, sadly, what it is.
These same people chide Yahoo!'s growth as "tepid." But a focus on metrics such as year-over-year revenue growth shows a wholesale misunderstanding of what Mayer's in the early stages of building.
Something similar happens with Apple (AAPL) analysis. We lament an apparent lack of innovation from Tim Cook, wondering why it took so long to do a large screen iPhone (assuming we get that in this year's Android-killing iPhone 6). But we're not studying the company from the proper perspective. We prescribe the misguided fruits of our impatience and lack of vision on Apple and Yahoo! as opposed to considering what the strategic roadmap might actually be inside the building.
If Marissa Mayer walked into Yahoo! with the goal of immediately increasing search- and ad-related revenue, I would have remained bearish on her prospects. (I was a fan for the first year of her tenure, turned temporarily sour, but have since reassumed bullishness after learning more about Mayer's video strategy).
Mayer's doing exactly what she should be doing -- keeping things stable on the top and bottom lines with a welcome assist from Yahoo!'s ownership stake in still surging and soon-to-be public Alibaba. Alibaba and Yahoo!'s subsequent cash pile gives Mayer the type of wiggle room Apple, Google (GOOG) and Amazon.com (AMZN) enjoy.
Different reasons, but similar dynamics.
Apple doesn't need to rush out the next big thing. Google can experiment in dozens of exciting areas. And Amazon can build out the stickiest ecosystem in retail without concern for profits. Established core businesses at the aforementioned afford them these luxuries. Yahoo! operates from a similar position of strength even if it's not the result of a decade's worth of domination.
For Mayer to come in and obsessively focus on present-day metrics at Yahoo! would set her up for the same failure as her many recent predecessors. She would not be taking full advantage of the gift she was given when she took the job -- time, largely as a result of Alibaba. She has the opportunity to build something that will sustain. Investors should be happy (as they obviously are given how well Yahoo! stock has performed since Mayer took over). They see the long-term potential she's seizing, therefore stagnant growth today means very little.
What's lost on Marissa Mayer haters is that you can't build what she's building overnight. Or at least you shouldn't try.
Tim Cook could have produced a large screen iPhone back on iPhone 5 or earlier. Under Steve Jobs, Apple considered and even expressed concern over a bigger phone. However, it's a bullish sign that Apple didn't cave and do what will (reportedly) end up iPhone 6 before it was good and ready.
For an example that's closer to parallel, consider Netflix (NFLX). It took Reed Hastings a long time to attempt original programming. Granted, it wasn't a wholly strategic decision -- flaws in Netflix's initial streaming strategy triggered the move -- but Netflix did not jump into original content over the course of a few months. It took years.
That said, I don't think Mayer has a copycat of Netflix, Amazon or Hulu up her sleeve. While we might see components of these buinesses, I expect A) a diverse strategy from Mayer and, more importantly, B) a thing or two we're not expecting. We absolutely will not see a video strategy built on an underwhelming copycat of what Netflix is struggling, despite Hastings' PR spin and hype, to accomplish. Mayer's too smart for that.
Mayer notes Y! wants some original, curated, and some content from partners. Spend will be in line with prior yrsChris Ciaccia (@Chris_Ciaccia) April 15, 2014
The line I can't stop reeling as of late obsessively focuses (I'm not ashamed to admit it) on Yahoo! becoming the leader in live concert streaming. It's just too massive of an opportunity to pass up. Plus, Mayer has flashed signs she's into it. Yahoo! purchased a small startup in the space, Evntlive, and partners with Clear Channel's iHeart Radio to do what amount to one-off shows.
There's more on the horizon. Timestamp that.
If you're going to steal thunder from YouTube, you're not going to do it by poaching popular YouTubers. You're going to do it by taking over an area Google hasn't seized and maximized. You can find context to support that statement in the above-linked article.
But even if Mayer doesn't go as far as she should and I want her to go with the live music experience, it's clear she's serious about building something sustainable and long-term. She's building Yahoo! around a combination of personalities, daily habits and appointment viewing.
If you think about all of the Internet television/online video strategies out there, very few, if any, have taken this approach. You have to give Mayer credit for staking out the territory. While it might not generate immediate, world-beating results (though, in its infancy, what we have seen hasn't been bad), it treats Yahoo! like the long-term project it should be after years of short-sighted mismanagement that, at times, bordered on neglect.
--Written by Rocco Pendola in Santa Monica, Calif.