Yahoo’s offices have become a grim place of late. In February, C.E.O Marissa Mayer announced that the company would shed 15 percent of its staff as it explores a sale of its core business. This human “streamlining” has been particularly brutal for morale at Yahoo’s extensive media holdings. Numerous publications have been shuttered, including Yahoo Food, Yahoo Health, Yahoo Parenting, Yahoo Makers, Yahoo Travel, Yahoo Autos, and Yahoo Real Estate. In the company’s newsroom, on West 43rd Street, there are now so many empty desks that remaining employees have “corralled everyone together so it didn’t feel so lonely,” one staffer told me.
Yahoo’s journalists used to joke amongst themselves about the extensive variety of Kind bars provided, but now the snacks aren’t being replenished. Instead, employees frequently remind each other that there is little reason to bother creating quality work within Yahoo’s vast eco-system of middle-brow content. “You are competing against Kim Kardashian’s ass,” goes a common refrain.
It wasn’t supposed to be this way. On her first official day as the C.E.O. of Yahoo, in July 2012, Mayer pulled up to the company’s Sunnyvale, California, headquarters in her hunter-green BMW to an ecstatic outpouring of optimism. According to Nicholas Carlson’s definitive book, Marissa Mayer and the Fight to Save Yahoo!, wall screens projected “Welcome Marissa!” and Mayer’s face was adorned on Shepard Fairey–style posters above the word “HOPE,” in all caps. David Filo, Yahoo’s co-founder, personally unfurled a purple carpet to lead the company’s newest leader through the front doors of its headquarters.
Mayer was hired, in part, to sort out Yahoo’s identity crisis—was it a media business, or rather a tech company? It was a confusing question. Yahoo began as a general guide to the Internet, one that aimed to be all things to all users—chat rooms, news sites, e-mail, fantasy football, you name it. For a time, this strategy worked brilliantly. At its peak, Yahoo’s market capitalization reached $128 billion. But as Yahoo expanded, other companies became more specialized and began eating away at its domination in niche categories. Soon enough, it was losing out to Google in search and e-mail, Craigslist in classifieds, and countless Web sites in editorial. Its market capitalization is now approximately $35 billion, virtually all of which owes to its stake in Alibaba, the Chinese Internet giant.
By the time Mayer was hired, however, Yahoo still boasted an enormous digital audience. But running a media company was not intended as Mayer’s brief. She was a technology executive who had ascended to the top ranks of Google by focusing on the product side of the business. Now, she had a broad mandate to return the company to among Silicon Valley’s elite. Successful tech companies, after all, are far more valuable than even thriving media businesses.
But while Mayer worked away on new products, she also seemed to harbor an ambition to turn Yahoo into a media juggernaut, too—even if she didn’t have any experience in the field. And it didn’t seem to matter if Yahoo already had a massive audience. Successful or not, Mayer had little interest in the sort of content that Yahoo was creating—the sort of content, that is, for people searching for pictures of Kim Kardashian’s backside. The glamorous C.E.O. wanted instead to upgrade her site by hiring a roster of big-name journalistic talent. “One of her initial observations of us,” one former Yahoo executive told me, “was that we don’t have big-enough names.”
Mayer quickly addressed this concern. She hired Katie Couric as Yahoo’s “global anchor” in late 2013, for a deal reportedly worth more than $5 million a year. (According to a person close to the company, the deal has been renewed at a value closer to $10 million, in a combination of cash and stock.) Yahoo recruited Megan Liberman from The New York Times to be editor in chief of Yahoo News; it also hired the Times’ tech columnist David Pogue and its star political reporter, Matt Bai. Andy Serwer, the former editor of Fortune, was brought in to run Yahoo Finance. Mayer recruited *Elle’*s then creative director, Joe Zee, to run a style-focused digital magazine, former New York Post Page Six editor Paula Froelich to lead Yahoo Travel, and makeup impresario Bobbi Brown to run Yahoo Beauty. In the process, Mayer shuttered Shine, Yahoo’s middle-brow site for women, with its 500 million monthly page views.
In August, she completed her spree by hiring Martha Nelson, the former top editor of Time Inc., who was best known for her extremely successful editorship of People magazine, to become Yahoo Media’s global editor in chief for compensation reported at upwards of $2 million. “I am Martha Nelson’s biggest fan,” Mayer wrote on her Tumblr page after the move was announced. (In 2013, Yahoo acquired Tumblr for $1.1 billion.) “I have followed her work for nearly 20 years. She was the first and only name on my list for Editor-in-Chief of Yahoo and I’m so happy that we have made this a reality!”
Finally, it seemed Mayer had an answer to the question of whether Yahoo was a tech company or a media company. It was both. “We may not be the biggest technology company, but we’re the biggest technology company that understands media,” she said at a Bloomberg conference last summer. No one argues with the first part of her statement; it’s the second half that is the subject of debate.
Only months later, however, it is all being reined in. While Yahoo is keeping individual publications dedicated to beauty, style, politics, movies, celebrity, and TV, among others, it is ending its “experiment” in creating smaller individual publications. As Yahoo approaches a potential sale, many fear the pattern of cost-cutting could continue. “Yahoo is reverting to its natural form,” a former staffer told me, “a crap home page for the Midwest.” Nelson, who has overseen the downsizing, is trying to maintain her good humor. She recently joked to colleagues that “she thought she was being invited to the party, and then she showed up and they handed her a broom.” (Nelson declined to address that comment, but told me that “2016 is a year of focus” and that “Yahoo is doubling down on the core content verticals where the company has always shown strength: news sports, finance and lifestyle.”)
According to current Yahoo staffers, flaws with Mayer’s “experiment” were evident early on, the result of a clash between the company’s splashy new hires and its culture of programmers, who typically paid more attention to analytics than boldface names. “There were pretty serious alignment issues in the company about supporting [the media properties],” the former executive told me.
Crucially, Yahoo’s billion-person-a-month home page is run by an algorithm, with a spare editorial staff, that pulls in the best-performing content from across the site. Yahoo engineers generally believed that these big names should have been able to support themselves, garner their own large audiences, and shouldn’t have relied on placement on the home page to achieve large audiences. As a result, they were expected to sink or swim on their own.
Understandably, this bred some resentment within the newsroom, as writers with large egos and paychecks found themselves awash in a sea of lower-level content. Some writers felt “you could almost never find them because Kim Kardashian’s ass is so large it just pushed them off into the margin,” as one former staff member told me. One current employee explained that Yahoo’s algorithm serves up individualized content depending on a user’s habits. So if someone is complaining about seeing too much Kim Kardashian, this person said, “let’s stop lying that you are not clicking on it.”
Whatever the case, for all their panache and glamour, Mayer’s stars simply could not compete. “No matter how popular David Pogue is among his readers, he’s bringing, what, a million readers?” the former executive noted. “That’s a drop in the bucket on the home page.” Meanwhile, it’s not just Nelson who is telling people she’s been handed a mess. “The Katie deal is in very bad shape,” the former staffer told me. Many of the anchor’s interviews have drawn significant traffic. Since Couric joined Yahoo, in late 2013, her original video interviews have garnered some 300 million page views. Her interviews with the presidential candidates alone amassed 15 million streams. “We have an incredible, smart, nimble, and multi-talented team, capable of producing phenomenal news features and iterative content in many different forms for a variety of platforms,” Couric told me. “We’re like the little engine that could . . . working hard every day to deliver strong content.”
Still, many of these interviews can be impossible to find on the home page. As this person close to the company concluded, “She is succeeding despite Yahoo.”
Many point to Mayer’s own failed leadership as the main reason that the conflict between Yahoo’s media and technology talent has not been adequately resolved. (Through a spokesperson, Mayer declined to comment for this story.) Now, amid renewed investor pressure and a likely sale of Yahoo’s core business, the product side seems to be winning. The home-page editing staff has been cut way back from its peak, and the reliance on human intervention declines as the engineers, who have undergone their own staff reductions, insist that the algorithm is improving all the time and serving up what users actually want—not what the New York media types think they should read. Several people from Yahoo told me that the home page was entirely “iterative,” tweaking itself all the time, and that the technology was far more valuable than many realized.
To some, indeed, the cutbacks were not a surprise. “Well, that was not entirely unexpected,” wrote Dan Tynan, the editor of Yahoo Tech, in a note to staff after the site was downsized. During Mayer’s buying spree, many New York media insiders wondered aloud whether top journalists could break through on the platform, and how long they would tolerate the perception that their stories were obscured.
But the irony is that Mayer, a self-professed geek from Silicon Valley, threw so much of her reputation behind high-profile media figures and went with her gut, just like a 1980s magazine editor—when even magazine editors, including those who don’t profess to “get” technology, have long abandoned that practice themselves, in favor of what the geeks in Silicon Valley are doing.
