Yahoo's move for Marissa Mayer took many by surprise. But is her appointment enough to stop the slump and reinvigorate the former internet giant?
It is no surprise to see Marissa Mayer get straight down to work at Yahoo as there is an awful lot to do if the former giant of the web is to regain some of its lost sparkle. As many have pointed out yahoo is an aimless entity, lacking a clear identity and purpose.
It was struggling long before the failed Microsoft deal but that episode, when founder Jerry Yang turned down a $44bn takeover offer, can be seen as a catalyst for its subsequent problems.
From that point on it seems Yahoo was dead in the water, bobbing around waiting for salvation, either in the form of a takeover or a product revamp that would re-energise the company. Neither has materialised.
The company still pulls in a lot of web traffic but its pull is not what it once was. Google has obliterated its share of the search market - with Yahoo now hovering around 7%, compared to Google's 84% - while the likes of Facebook and Twitter have taken precious traffic, and subsequently ad revenue, away from Yahoo.
Its market cap now sits at around $19bn, compared to Google's $187bn and Facebook's $60bn.
The trouble in the boardroom hasn't helped - successive CEOs have left in highly embarrassing episodes.
Carol Bartz was sacked over the phone by then chairman Roy Bostock, who read out a prepared statement. Bartz was furious at the manner of her dismissal and launched a very public attack on the board. In an interview with Fortune she called them "doofuses" who had "fucked me over".
Her replacement, ex-PayPal exec Scott Thompson, left after a few months in the role when his CV was found to contain irregularities over the degrees he had been awarded.
Stepping into all this is Mayer, a Google veteran and very highly thought of throughout Silicon Valley. She was one of Google's first employees, joining the company in 1999 when it was a year old. She initially worked on the user interface side of things and was instrumental in designing Google's sparse search homepage. Compare that to the mess that is Yahoo's homepage to see what one of her first priorities should be.
Beyond that Mayer should be looking to give Yahoo its identity back. Is it a search engine? Is it a content aggregator? A portal? "Yahoo!'s fundamental problem is that it has too many disparate products with no clear unifying thread that ties them all together," wrote Forrester analyst Shar VanBoskirk.
VanBoskirk went on to say that she doesn't think Mayer is the right person to do that for Yahoo. "Yahoo needs a strategic visionary, not a product engineer," she said. "And Mayer's background is in product development...not corporate strategy, not marketing, not brand definition...the areas where Yahoo has the most critical need."
"I count four different strategies over the last four years. Late Jerry-Yang era Yahoo was all about building Yahoo! as a provider of ad management technology and a portable social ID for consumers. Bartz era Yahoo refocused the company on being 'the best media company in the world,' by developing content creation resources and proprietary online magazines. Then, Scott Thompson re-introduced Yahoo shopping and Yahoo as a commerce technology provider," she went on.
However John O'Brien at TechMarketView disagrees. He thinks the bold move could prove to be a stroke of genius.
"Doubters will question Yahoo's decision to hire a technology expert to run the business, over someone already experienced as a CEO," he wrote. "However Yahoo needs to take bold action to turn things around. Mayer's appointment, albeit high risk, could also re-introduce that early days buzz at Yahoo that has been sorely missing."
"Mayer brings a lot to the table: great presence, a strong technology background, proven product successes and knowledge of the Silicon Valley power game," added Gartner analyst Allen Weiner. "But for Yahoo, that's half the battle as the company has become divided with its media minds based in Santa Monica and its engineering/product talent in Sunnyvale."
As Weiner goes on to say, Mayer will be given a honeymoon period but after that investors will want to see results. Only time will tell whether Mayer is the right person to do that but what Yahoo needs more than anything is stability. This will allow Mayer to get her ideas out into the business and for the market to react.