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An Open Letter to Marissa Mayer

Yahoo has serious problems, but attracting users isn't one of them

Ken Marino of Yahoo's "Burning Love"

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We know that Marissa Mayer understands what it's like to work for an ad-supported business; she helped build possibly the best ad machine the world has ever seen. This isn’t Scott Thompson, who seemed unfamiliar with how banners work, or Carol Bartz, who apparently thought that ad sales executives were optional. Even though Mayer’s a product/Alley/tech person at heart, she’s at least not unfamiliar with the concept of a media business.

That’s why Mayer’s early comments have me somewhat worried. Because the CEO she’s starting to sound like is Jerry Yang. Not the brilliant Jerry Yang who helped found the company in the 1990s, but the accidental CEO Yang of a few years ago, who after an exhaustive deliberation during his first 100 days back on the job, revealed to the world that Yahoo was indeed a portal.

Mayer told The New York Times on Monday that Yahoo isn’t concerned with answering the never-ending "Is-Yahoo-a-media-or-tech-company" question. It’s not the right question. The most important thing is to "give the end user something valuable and delightful that makes them want to come to Yahoo every day.”

Uh oh. That’s sounds dangerously Yangish and vague. Ms. Mayer, they already do come every day. My mother-in-law is delighted to check Yahoo Mail every day. All we ever hear about from Yahoo officials is that there are 700 million people just like her.

Yahoo’s products, for all their problems, actually work fine. They’re maybe not beloved, but are certainly habitual.

Here’s another Mayer comment from this week, via Twitter: Love that on a Yahoo search for Skype you get a big "Download" button ‪#exactlywhatyouwant‬ http://search.yahoo.com/search?ei=UTF-

Huh? Are you really going to start your tenure by making a case that Yahoo’s killing it in search? Does this mean that you want to make that product a priority, break up with Bing and start that Google chase all over again? Isn’t the war over?

To be fair, it’s Mayer’s third day. We need to give her a chance to fill out all her benefits paperwork before she can be judged on her big unwritten manifesto. But it’s slightly troubling that she’s already touting the company spin. "Yahoo has a very healthy search advertising and display advertising business,” she told the Times.

Hmm, when a company is so clearly in turnaround mode, should a new CEO come in and start talking about how great everything is? Rather, shouldn't she start with, “Hey, we’ve got some serious problems, and here’s what I need to address first”? Because with all due respect, Ms. Mayer, Yahoo’s advertising business isn’t something you’d describe as super healthy. More like, it exists, because it does. The biggest thing you need to realize, if you haven’t, is that Yahoo has failed to excite the ad market, for years—and these are exactly the people you need to delight. Big advertisers are buying Yahoo these days … just because. Not because they’ve been particularly excited about what your company has had to offer for quite some time. Being big, as Yahoo's sales chief Wayne Powers often admits, hasn’t been enough. Your predecessor, Ross Levinsohn, seemed to get that. Considering all the damage the Thompson fiasco has caused, Levinsohn and his colleagues (Team Fox Interactive) were on a roll and had advertisers—maybe not excited—but optimistic for the first time in a while.

I’m not sure a few tweaks to Yahoo’s products are going to change any of that thinking. Yahoo needs something transformative, which is a lot easier said than done. Dan Frommer of ReadWriteWeb smartly points out how lagging some of Yahoo’s products have been of late. Yahoo Mail pales to Gmail, "Flickr should have been Instagram!" he wrote.

Why wasn’t it? Probably because it was developed inside Yahoo. It’s been years since Yahoo has been seen as cool or innovative among developers and the Valley engineering crowd. And while I don’t work there, I’d have to imagine that Yahoo, given its sheer size, suffers from the innovation-killing, too-many-products bureaucracy that has bludgeoned Microsoft (see Vanity Fair’s blistering feature this month). Instagram probably could never have been born inside Yahoo. So here’s a suggestion: Try to build the next Instagram, the next Foursquare/Viddy/hipster social app outside of Yahoo. Start a venture capital spinoff that serves as a lab for building new products that aren’t even Yahoo branded. Then call all of your brilliant engineering buddies.

Next, buy something that will get brands back on your side. Foursquare. Vox Media. Funny or Die (it’s even easier for me to tell Yahoo how to spend its billions than it is for me to tell the Knicks to spend $50 million on Jeremy Lin).

Lastly, as you correctly mentioned in the Times, go after mobile and video—hard. I know Yahoo killed its Flipboard wannabe Livestand. So, time to buy Flipboard. And push the hell out of those beautiful tablet Living Ads (if they still exist, I’m not sure).

More important, if you lose Levinsohn (and who can blame the guy for bailing), make sure you hold onto global media head Mickie Rosen and Yahoo video head Erin McPherson tightly, and give them more money.

For all the attention heaped on YouTube’s 100-channel strategy, have you seen Yahoo’s Bachelor spoof Burning Love? The show has attracted talent like Ben Stiller and Jennifer Aniston. It was even reviewed, positively, in The New York Times. Forever, it seems, we’ve been waiting for a Web show to become a mainstream hit (usually, you hear folks in the industry claim that isn’t possible, maybe because their shows aren’t that popular). Burning Love might have come closest. Ms. Mayer, did you notice all the hype and attention surrounding the NewFronts this year? No, billions of TV dollars didn’t shift. But a few more shows like Burning Love, and you’ll see brands start getting really excited about video. Maybe even excited about Yahoo again.