What Marissa Mayer has to work with at Yahoo

Its new CEO inherits a big challenge to turn around the sleeping tech giant, but Yahoo still has major assets to build on


On paper, or maybe that should be in pixels, Marissa Mayer is a brilliant choice to run Yahoo. No one disputes her talent or drive; even if some colleagues anonymously call her personal style prickly, that would not be an issue if we were talking about a male chief executive.
No, the big question is about Yahoo itself. Has the downward trajectory of the past several years become an unrecoverable tailspin? If so, nothing she or anyone else can do will matter much in the end.
Here's the thing to keep in mind: Yahoo's assets are still prodigious. Several hundred million people use its services every day. The company's cash flow remains substantial.
Mayer's most obvious immediate task will be to do what recent predecessors have seemed unable to accomplish, or at least to articulate in any competent way: decide what Yahoo does best – from a technology and business perspective – and build on those core strengths. Then, pick the best of the secondary products and experiments, and build on them.
Easy to say, of course, but some smart people have stumbled. I don't have any magic answers, either, but I can point to at least three areas where Yahoo has had a gigantic lead and then squandered it.
First, email: what was once a cutting-edge web-based email service has gone essentially nowhere in recent years, falling far behind Google's Gmail, and even Microsoft's Hotmail, in just about every way. The recent disclosure of a Yahoo email password security breach only highlighted the dreadful state of the product's overall security, which, even today, doesn't offer encryption in the browser.
Second, aggregation: Yahoo News (and its sports/finance/entertainment/etc services) are still vital sources of information and play for countless people, largely because Yahoo understood and used aggregation much more deeply than other major news sites. In particular, Yahoo's aggregation teams recognized what Google et al still don't get: that you get vastly better results when you combine human intelligence – journalists and the audience/users – with machine intelligence.
Again, however, Yahoo didn't press its advantage. The main reason that Yahoo News still matters is that its big Silicon Valley competitors have been equally slow to understand the value of humans in this process, something that has not been the case at newer operations such as Buzzfeed and AOL's Huffington Post.
Third: social. When you talk about squandering an asset, Yahoo's (mis)treatment of Flickr, the super-social photo-sharing service, ranks at the very top. For years, Flickr was the meeting ground for photographers – pro and amateur alike – and defined the very notion of photo-sharing on the web. Yahoo's indolent, if not hostile treatment of Flickr gave Facebook the opening it needed to take over the space. And more recently, Google has pushed hard there with Google+. Thomas Hawk, a noted photographer, urges Yahoo to either sell Flickr to Google or seriously invest in it. And he's right: I would invest, because I don't think Google understands the Flickr crowd, either.
Those are just three of the arenas where I'd redouble efforts if I were in charge. I could point to several dozen other services that are at least intriguing, but I want to mention one, in particular – a service that makes Yahoo no money but which is an example of the sheer genius that has occasionally peeked through. I'm talking about Yahoo Pipes, which is little-known among the general public for the good reason that it is a bit more technically challenging. Yahoo's tag line for Pipes, "rewire the web", is an apt one, because it lets you aggregate, massage and remix all kinds of information and technology from around the web. Even a novice can create highly tailored output with simple pipes; experts can do astonishing things. I'd like to see Yahoo pull Pipes and a bunch of other intriguing technology projects off the virtual shelf, and leverage them all – in large part, to give users more control over what they get from Yahoo and its various services.
Mayer starts from a great position in one key way. She inherits a company that has a terrible reputation among investors and tech journalists, yet with plenty of assets to work with in the near and longer term. I hope she pulls this off.